Pakistan’s misguided obsession with infrastructure

[Nilgiri]

Most of new motorways are BOT projects. Sialkot-Lahore, Karachi-Hydrabad, Multan-Sukkur, Hydrabad-Sukkur, Lahore-Abdul Hakim. So federal is spending least amount of money from its own resources. Only DI-Khan-Hakla motorway is from development budget because it goes through relatively poor area of south KPK and south punjab thal region with less traffic.

All these motorways will be completed by 2018-2019 and cost more then $10 billion. People who say government need to spend on other areas doesn't know what they are talking about.

I'm not talking about govt having to spend more on education by diverting from x,y,z. I'm saying the govt should get its arse the hell out of education as much as possible, cut down the legislation and bureaucracy for private sector to enter education...and then finance any supposed market failure directly with voucher based system while simply just writing up and enforcing the standards (as society deems fit...just like how the court system operates).

Anyways if you can't see how the control of education by govt in the region (and world at large) affects the region's problems directly....given there is constant lack of supply of both quantity and quality as a result (when it need not be the case given the large wealth locked in countries and huge demand for quality education at the bottom dollar)....then don't reply to me please.

I am not saying govt should divert its money from BOT infra at all, I'm saying continue all of that as much as you want and is sustainable....but don't stupidly think that govt oligarchy on education is not the root cause of the real problems of society in the region (I am not only talking about Pakistan here)....and that therefore everything else the govt participates in is relative show-boating given the grandiose, monumental and many times deliberate failure of education.

 

[ziaulislam]

The government is building more airports, roads and railways, even though the existing ones are underused.

NEARLY 20 years after it opened, Pakistan’s first motorway still has a desolate feel. There is scant traffic along the 375km link between Islamabad and Lahore (pictured). Motorists can drive for miles without seeing another vehicle, save perhaps for traffic cops manning speed traps. As the two cities are already connected by the Grand Trunk Road, which is 90km shorter and toll-free, there is simply not much demand for a motorway.

Yet this $1.2bn white elephant is one of the proudest achievements of Nawaz Sharif, who was prime minister when it opened in 1997 and is once again running Pakistan. Mr Sharif, who enjoys comparisons to Sher Shah Suri, a 16th-century ruler who renovated the Grand Trunk Road, never tires of talking about it. He regained power in 2013 with a campaign which both harked back to his famous road and promised more infrastructure to come. He even pledged bullet trains that would enable pious passengers to leave Karachi after dawn prayers and arrive in Peshawar, more than 1,000km to the north, in time for evening worship.
It is an article of faith for Mr Sharif and his party, the Pakistan Muslim League Nawaz (PML-N), that investment in infrastructure is a foolproof way of boosting the economy. His government is racing to finish umpteen projects before the next election, due by mid-2018, including a metro line in Lahore and a new airport for Islamabad. The likelihood is that the new airport (which has been plagued with problems, including runways that have been built too close together) will be as underused as most of the country’s other airports, many of which are modern and spacious.

Pakistan’s infrastructure is underused because the economic boom it was meant to trigger has never arrived. Over the past three years the government has successfully staved off a balance-of-payments crisis, achieving some measure of macroeconomic stability. It has trimmed the budget deficit, partly by broadening the tax take and partly by cutting energy subsidies. That, along with lower oil prices, has narrowed Pakistan’s trade deficit and allowed it to begin rebuilding its foreign-exchange reserves. The stockmarket has risen by 50% since the end of 2015.

But terrorism and insurgency have put off investors, both
foreign and domestic. The country is also held back by inefficient and often cartelised industries, which have fallen behind rivals in India and Bangladesh. Exports, 60% of which are textiles, have been shrinking for years. Much more needs to be done to create an educated workforce. Almost half of all those aged five to 16 are out of school—25m children. Health, like education, is woefully underfunded, in part because successive governments shy away from taxing the wealthy. Only 0.6% of the population pays income tax. As the World Bank puts it, Pakistan’s long-term development depends on “better nutrition, health and education”.

Cement to be

But Mr Sharif’s government is pinning its hopes on yet more infrastructure to fix the country’s economic problems, in the form of a $46bn investment scheme known as the China-Pakistan Economic Corridor (CPEC). Much of it is being financed on commercial terms, including several power plants. Pakistan undoubtedly needs to relieve a chronic shortage of electricity. But critics fear the country will struggle to pay back the debt, especially if foreign-exchange earnings from exports continue to dwindle. At the very least, the government will need to continue chasing deadbeat customers to pay their bills and cutting expensive subsidies—steps that are deeply unpopular.

In addition to boosting Pakistan’s power supply, CPEC is supposed to link China by land to Gwadar, a deep-water port on the Arabian Sea, in the hope of creating a lucrative new trade route. New or upgraded roads will stretch the length of the country. The Karakoram Highway between the two countries, which was built in the 1960s at vast expense over a high and crumbly mountain range, is being upgraded as part of the trade corridor. But it forever needs patching up and is little used. Sceptics say Xinjiang, China’s westernmost region, is still too poor for better transport links to make much difference to Pakistan’s economy. Securing isolated stretches of road from separatist rebels in Balochistan is also gobbling up large amounts of cash.

Lijian Zhao, a Chinese diplomat, says China is all too aware that Pakistan needs more than just big-ticket infrastructure if it is to flourish. Disarmingly, he praises the efforts of Britain and other countries to improve Pakistan’s “software”, such as education and the rule of law. “But China’s expertise is hardware,” says Mr Zhao.

It may not concern Mr Sharif unduly if the next generation of roads is as deserted as the last. Civilian governments have often struggled to get much done in between military coups, but voters are impressed by gleaming new projects, even if they never use them. It’s an approach that has worked for Mr Sharif’s brother, Shehbaz, the popular chief minister of Punjab province. He has lavished resources on endless sequences of over- and underpasses to create “signal-free” traffic corridors in Lahore, the provincial capital, that are of most benefit to the rich minority who can afford cars.

There are limits, however. Khawaja Saad Rafique, the railways minister, recently admitted to parliament that the country would not be getting a bullet train after all. “When we asked the Chinese about it, they laughed at us,” he said.

http://www.economist.com/news/asia/...ds-and-railways-even-though-existing-ones-are

underused..!!!
stupid and lame post

 

[sparten]

Unfortunately real life is a lot different from what Insafians would like it to be.
1) The GT Road is only shorter if you count from Rawalpindi to Lahore district. The M2 takes you from City of Islamabad to City of Lahore.
2) The GT Road is bustling with major urban and industrial centers, like Gujrat, Sialkot, Gujranwala. The M2 goes through mostly empty land.
3) Tbe M2 was not designed to be a replacement. It was desigtned to in order

i) Augment the GT Road
ii) Reduce pressure on it. The GT Road goes through the middle of built up areas, it has little room to grow.
iii) Open up the North West Punjab
iv) Provide an alternate route from the GT Road, which at some point goes to a couple of miles of the Indian border. So those saying that it should have been next to the GT don't know what they talk about.
v) Provide a modern and fast communication link, the GT Road is and can be niether.

By the way, foreigners and teenagers on this thread seem to say, "Oh but GT Road sees more traffic, thus M2 is a failure, White Elephant" etc etc. You miss the memo that at no point was it supposed to handle more traffic.

 

[newb3e]

If Shareef has a fetish with steel and concrete I wonder what the developed world has with steel and concrete...

Okay lets make some naan!

 

[Max Pain]

We need to retain and nurture men like Shahid Khan. This is what a real businessman is. This is sort of the go get attitude with no room for religous mumbo jumbo that Pakistan needs.

what an Inspirational video,
could actually help.
Didnt expects that in the comments section

 

[Samee Ulhaq]

Quite an unrealistic post.

If we look at all developed nations of world they have few characteristics

a) Roads & Railways
b) Interconnectivity between cities
c) Airports / Sea ports
d) POWER in abundance for residential & commercial projects
e) Industrial Hub , which needs power [Power shortage was the #1 issue since 2010]
f) Financial Banks & Lenders who support Local domestic projects
g) Water projects (Dams)


So based on these few items that I listed , now I am not sure what the "economist" suggests that infrastructure does not aids in progress of a national interest.

Let us take a step back and assume between 90's and 2010 , we had not invested a penny in roads and highways can you imagine the backwardness we would have faced , as no investor would have shown interst with the added burden

At least when we look at the map at present we see 50% -75% if the country was connected before CPEC started meaning the new investors or Partners , they had a solid foundation to build upon

May be the economist feels money grows on trees, and with out solid foundation of infrastructure , people can just teleport from one city to another , or goods can travel on back of pegions from city of Lahore to Karachi.

Also having a duel investment in Trains and Roads , we were lucky that when our Railways fell behind , we could rely on roads to pick up the ground transportation load. Can the Economist suggest what would be alternative for us had we not constructed roads in past?

Furthermore, one of the critical points the Economist or the author of the article is missing is who is driving the project forward, it is a nation who constructed the Mega Dam project in China and presently a grand helpful nation who are furthering cause of humanity and cooperation world wide.

May be the economist author can plug a wire into his hind and power a lamp surely we don't need any infrastructure

>> Dear, you being a bit irrational as you have completely missed the point of article. He is criticizing the unbalanced development and excess infrastructure which is largely under use. But this article some what a year or 2 outdated too. As mention in article China's western most region is under developed but from last 2 or 3 year it is developing under China's One Region One belt policy parallel to CPEC. The article is saying is that Only CPEC is not able to save Pakistan economy, unless our internal production increases along with infrastructure.>>

 

[iPhone]

Just look at how many jobs building infrastructure created in the country. Then you have so many miscellaneous industries related to the infrastructure that are probably booming right now and are helping the economy.

There's no way building roads and bridges and transport system can be bad for a country. I don't care how you try to spin it. When you're able to travel from one end of the country to another in a matter of hours rather than days you'll know how important building super highways is.

I tell you guy's even governance does not have to be great. Bangladesh is hardly rip roaring citadel of efficient government but everytime I go to any UK store all I see is 'Made in Bangla' clothes. They don't even have any cotton so how the hell did all the garment manufacturing end up in that country that is barely above water.

The reason is mention 'Pakistan' anywhere on earth including China our so called friend and people are like 'oh Pakistan be careful'. It is that perception as a country of hostile people with runaway religious zealots brimming with hatred for the West that has destroyed Pakistan's trading potential. People do not like going to Pakistan. This is fact.

I'm not sure if opening foreign garment factories is really the way to go. The people working in such factories work in deplorable conditions and get paid less than pennies on the dollar.

Western companies have now for decades sought cheap labor and they couldn't care where they got it from as long as they paid ten cents on a $300.00 pair of sneakers. And yes the country making these western products, their economy looks good on paper but the social status of their people never see any uplifting.

 

[user1]

Simplest and most logical argument is that Chinese are not stupid that they are willingly wasting $54 billion. 80 percent is going towards energy projects which will be used when Chinese and other imvestors build factories in Pakistan.

If you build it, they will come!

 

[Nilgiri]

Simplest and most logical argument is that Chinese are not stupid that they are willingly wasting $54 billion. 80 percent is going towards energy projects which will be used when Chinese and other imvestors build factories in Pakistan.

If you build it, they will come!

It wont be a waste for them whether CPEC fails/succeeds. They will recoup all their loans with interest, its in the fine print

 

[SBD-3]

You are right but you missed an important point. Did developed countries take loan to build roads and useless flyovers and what is their tax-to-GDP ratio as compared to Pakistan? One should never take loan on those infrastructure projects like roads those dont generate good profits and in short period. The economy is driven by manufacturing and production of value added goods. While in Pakistan's economy, industrial share is far less than services sector.

Have you checked the debt to GDP of developed world in general. Do check that,
Japan is just planning to spend a whopping 61 Billion US Dollars on Japanese infrastructure, it was scaled down form rumored 280 Billion US Dollars. So I wonder why would a country like Japan who already possess an advanced infrastructure and world's highest debt to gdp of ~230% would make such a seemingly foolish move for boosting economy.
https://www.bloomberg.com/news/arti...lion-infrastructure-spending-to-boost-economy

 

[Hakikat ve Hikmet]

underused..!!!
stupid and lame post

I am pretty sure the author is in RAW payroll. Good for him - earning quick bucks, and that too from the Indians!!!

 

[SMC]

This is a silly article. Any economic growth depends on electricity, a decent highway/motorway network and railways. That is all that CPEC is providing. Just ignore this silly article.

 

[Hareeb]

Have you checked the debt to GDP of developed world in general. Do check that,
Japan is just planning to spend a whopping 61 Billion US Dollars on Japanese infrastructure, it was scaled down form rumored 280 Billion US Dollars. So I wonder why would a country like Japan who already possess an advanced infrastructure and world's highest debt to gdp of ~230% would make such a seemingly foolish move for boosting economy.
https://www.bloomberg.com/news/arti...lion-infrastructure-spending-to-boost-economy

And how strong they are economically and their tax-to-gdp ratio. If we were able to increase our tax-to-gdp ratio we would have no need to take debts.

 

[VCheng]

Those disagreeing with the motorway being called underused, please keep in mind that a six lane motorway usually carries well over 100,000 vehicles per day (some much more). What are the actual usage figures for the Lahore-Islamabad section?

 

[Kabira]

Those disagreeing with the motorway being called underused, please keep in mind that a six lane motorway usually carries well over 100,000 vehicles per day (some much more). What are the actual usage figures for the Lahore-Islamabad section?

Old news but

"The minister said during 2002-03, about 10.5 million vehicles passed through Lahore-Islamabad Motorway with daily average of 23,608 vehicles. He informed the assembly that during 2001-02, the average number of vehicle, which used the Lahore-Islamabad Motorway was 9.6 million."

http://www.dawn.com/news/136272

Traffic likely more then doubled since then.