Due to recent global financial and economic melt-down many developed and developing economics are facing contraction in their economic indicators including GDP and international trade. Fortunately, Pakistan’s position was not so bad. Despite facing many problems Pakistan is doing fine in a number of sectors and sub-sectors. Pakistan is expected to achieve a GDP growth of about 3 per cent during FY09, as per latest estimate. However, two factors namely terrorism and increasing level of corruption are hindering achievement of rapid economic growth and social prosperity. Both those menace need to be addressed effectively and in most comprehensive manner. A latest World Bank (WB) report enlists corruption as one of the core reasons that hinder the development drive in Pakistan. Inefficient public expenditure process, higher cost of basic input, lack of skilled human resources, corruption and nepotism restrict Pakistan far behind in her development drive.
Pakistan is also facing unprecedented problem of terrorism that very few other countries are encountering. This grave problem is eroding the very socio-economic foundation of the country almost in a similar fashion as corrupt mafia is inflicting damages to the economy, although their mode of working slightly differs. The terrorists are challenging the writ of the government by creating chaos and uncertain condition. Reckless attacks and suicide bombings by the terrorists are victimising the country at large but mostly the innocent poor people and the labourers, shattering their meager sources of income and employment. Repeated terrorist acts are also triggering shock wares across the nook and corner of the country intimidating the foreign and local investors and vitiating business environment. The economic and social cost of increasing terrorism is quite colossal and unbearable. According to some estimate the country has incurred a loss of at least Rs680 billion since 2004 on war on terror. Some other estimate put the accumulated cost at over $ 34 billion. This includes both direct and indirect costs. The economy is suffering from losses of income and employment opportunities, especially in the war torn areas, cost of rehabilitation of hundred and thousands of uprooted people from FATA and Swat areas. Losses to agricultural output, mining, orchard and tourism are also very large. Other losses are reduced exports earning, reduced tax collection, reduced level of investment and escalated cost of utilities and inputs. The anti-terror campaign that began in Pakistan after the Word Trade Centre bombing in 2001, are becoming over-strained and over-stretched day by day, resulting in erosion of resources for the vital development projects all over Pakistan, particularly in FATA, parts of NWFP and Balochistan. Latest reports indicate that government is going to exercise big cuts in her development expenditures by up to Rs100 billion; this is mainly due to meeting the ever increasing expenditure being incurred on war on terror. One can easily learn the figures of costs being incurred by the lonely super power and its surrogates in Iraq and Afghanistan, which may now be approaching $ 10 trillion. Pakistan, being a poor developing country cannot think of such burden on her economy and expenditure head.
Several development projects already stated in the affected areas are afflicted with delays, which may ultimately result in large cost over-runs. Since the start of the anti-terrorism campaign, sense of uncertainty has been prevailing in the country, which is contributing to capital flight, as well as slow-down in domestic economic activities besides, making foreign investors jittery. It is apprehended that foreign direct investment, which witnessed a steep rise over the past several years may be adversely affected by the on-going anti-terrorism campaign in FATA and other areas of NWFP. Latest truce between the government and the militants in Swat and other areas of NWFP is certainly a positive development for the country both on economic and humanitarian ground. For increased economic and investment activities better law and order situation and a peaceful environment are the prerequisites.
Another serious problem facing the country is the increasing level of corruption and mismanagement prevailing in various public and the private sectors. Although, wide spread corruption is a third-word phenomenon Pakistan is increasingly becoming a hostage to it, as it is making the life of common men pathetic. People are now feeling the punch most severely and increasingly in their daily life. It is now a widely accepted notion that corruption and terrorism is a two-headed monster that is eating up the biggest chunk of the national resource pie. Like terrorism, corruption also retards the pace of development activities. It also impedes national prosperity and hinders government’s efforts aimed at providing basic social services and alleviating poverty. Among many other factors, corruption emanates primarily from poor governance. The magnitude of corruption in some leading public sector enterprises in Pakistan compels the government to pay huge subsidies amounting to hundreds of billion of rupees out of public exchequer. For example, to pay for the inefficiency and mismanagement of WAPDA and KESC, government has to keep huge provision in its national budget, every year. KESC which has the privilege of serving one of the most densely populated markets in the world of about 15 million domestic, industrial and commercial consumers, in a radius of 40 miles, perhaps, is the most corrupt and the most inefficient organisation in Pakistan. With such large number of metropolitan consumers KESC should have become a profit-earning organisation. The corruption curves of WAPDA and Pakistan Railways may not be much below. It is now widely believed that corruption and inefficiency in the implementation of development projects, both at federal, provincial, and local government levels are eating the biggest share of PSDP and provincial development budgets. Pakistan’s water sector is fraught with large and small scale corruption. According to a 2003 and 2006 survey by Transparency International (TI), Pakistan’s Water and Power Development Agency is perceived to be the second most corrupt institution in the country. Close to half of the more than 31,000 complaints received by Pakistan’s anti-corruption ombudsman in 2002 were related to this one institution. Pakistan is on the list of the most water stressed countries in the world, and forecasts indicate that available resources are depleting rapidly, possibly leading to a state of water scarcity in the next two decades.
Much of the water infrastructures are in poor condition and Pakistan has to invest almost to Rs60 billion per year in new large dams and related infrastructure over the next 5-10 years. In the energy sector, Pakistan will face acute power shortages of approximately 6,000 megawatts by the year 2010 (equivalent to about three Tarbela dams) and 30,700 MW by the year 2020.
Pakistan conducted its second National Corruption Perceptions Survey (NCPS) from April to July 2006 which indicated that the majority of respondents were of the view that corruption in Pakistan in last three years increased by 100 per cent. According to another survey conducted by TI Pakistan in 2006 bribe paid annually in Pakistan is about Rs46 billion.
Deep-rooted corruption in police and law enforcement, legal system, power and energy sector, taxation and custom, health and education etc are only adding to the woes of the common man and widening the gap of haves and have-nots. Another dimension of corruption is the rapidly emerging collusion among the ever greedy hoarders, adulterates, profiteers and smugglers who are making the life of the poor consumers from bad to worse. If Pakistan wants to accelerate her economic growth and prosperity she needs immediate and effective enforcement of good governance and transparent administration to counter the acute problems arising out of terrorism, corruption and hyper inflation.
Pakistan is also facing unprecedented problem of terrorism that very few other countries are encountering. This grave problem is eroding the very socio-economic foundation of the country almost in a similar fashion as corrupt mafia is inflicting damages to the economy, although their mode of working slightly differs. The terrorists are challenging the writ of the government by creating chaos and uncertain condition. Reckless attacks and suicide bombings by the terrorists are victimising the country at large but mostly the innocent poor people and the labourers, shattering their meager sources of income and employment. Repeated terrorist acts are also triggering shock wares across the nook and corner of the country intimidating the foreign and local investors and vitiating business environment. The economic and social cost of increasing terrorism is quite colossal and unbearable. According to some estimate the country has incurred a loss of at least Rs680 billion since 2004 on war on terror. Some other estimate put the accumulated cost at over $ 34 billion. This includes both direct and indirect costs. The economy is suffering from losses of income and employment opportunities, especially in the war torn areas, cost of rehabilitation of hundred and thousands of uprooted people from FATA and Swat areas. Losses to agricultural output, mining, orchard and tourism are also very large. Other losses are reduced exports earning, reduced tax collection, reduced level of investment and escalated cost of utilities and inputs. The anti-terror campaign that began in Pakistan after the Word Trade Centre bombing in 2001, are becoming over-strained and over-stretched day by day, resulting in erosion of resources for the vital development projects all over Pakistan, particularly in FATA, parts of NWFP and Balochistan. Latest reports indicate that government is going to exercise big cuts in her development expenditures by up to Rs100 billion; this is mainly due to meeting the ever increasing expenditure being incurred on war on terror. One can easily learn the figures of costs being incurred by the lonely super power and its surrogates in Iraq and Afghanistan, which may now be approaching $ 10 trillion. Pakistan, being a poor developing country cannot think of such burden on her economy and expenditure head.
Several development projects already stated in the affected areas are afflicted with delays, which may ultimately result in large cost over-runs. Since the start of the anti-terrorism campaign, sense of uncertainty has been prevailing in the country, which is contributing to capital flight, as well as slow-down in domestic economic activities besides, making foreign investors jittery. It is apprehended that foreign direct investment, which witnessed a steep rise over the past several years may be adversely affected by the on-going anti-terrorism campaign in FATA and other areas of NWFP. Latest truce between the government and the militants in Swat and other areas of NWFP is certainly a positive development for the country both on economic and humanitarian ground. For increased economic and investment activities better law and order situation and a peaceful environment are the prerequisites.
Another serious problem facing the country is the increasing level of corruption and mismanagement prevailing in various public and the private sectors. Although, wide spread corruption is a third-word phenomenon Pakistan is increasingly becoming a hostage to it, as it is making the life of common men pathetic. People are now feeling the punch most severely and increasingly in their daily life. It is now a widely accepted notion that corruption and terrorism is a two-headed monster that is eating up the biggest chunk of the national resource pie. Like terrorism, corruption also retards the pace of development activities. It also impedes national prosperity and hinders government’s efforts aimed at providing basic social services and alleviating poverty. Among many other factors, corruption emanates primarily from poor governance. The magnitude of corruption in some leading public sector enterprises in Pakistan compels the government to pay huge subsidies amounting to hundreds of billion of rupees out of public exchequer. For example, to pay for the inefficiency and mismanagement of WAPDA and KESC, government has to keep huge provision in its national budget, every year. KESC which has the privilege of serving one of the most densely populated markets in the world of about 15 million domestic, industrial and commercial consumers, in a radius of 40 miles, perhaps, is the most corrupt and the most inefficient organisation in Pakistan. With such large number of metropolitan consumers KESC should have become a profit-earning organisation. The corruption curves of WAPDA and Pakistan Railways may not be much below. It is now widely believed that corruption and inefficiency in the implementation of development projects, both at federal, provincial, and local government levels are eating the biggest share of PSDP and provincial development budgets. Pakistan’s water sector is fraught with large and small scale corruption. According to a 2003 and 2006 survey by Transparency International (TI), Pakistan’s Water and Power Development Agency is perceived to be the second most corrupt institution in the country. Close to half of the more than 31,000 complaints received by Pakistan’s anti-corruption ombudsman in 2002 were related to this one institution. Pakistan is on the list of the most water stressed countries in the world, and forecasts indicate that available resources are depleting rapidly, possibly leading to a state of water scarcity in the next two decades.
Much of the water infrastructures are in poor condition and Pakistan has to invest almost to Rs60 billion per year in new large dams and related infrastructure over the next 5-10 years. In the energy sector, Pakistan will face acute power shortages of approximately 6,000 megawatts by the year 2010 (equivalent to about three Tarbela dams) and 30,700 MW by the year 2020.
Pakistan conducted its second National Corruption Perceptions Survey (NCPS) from April to July 2006 which indicated that the majority of respondents were of the view that corruption in Pakistan in last three years increased by 100 per cent. According to another survey conducted by TI Pakistan in 2006 bribe paid annually in Pakistan is about Rs46 billion.
Deep-rooted corruption in police and law enforcement, legal system, power and energy sector, taxation and custom, health and education etc are only adding to the woes of the common man and widening the gap of haves and have-nots. Another dimension of corruption is the rapidly emerging collusion among the ever greedy hoarders, adulterates, profiteers and smugglers who are making the life of the poor consumers from bad to worse. If Pakistan wants to accelerate her economic growth and prosperity she needs immediate and effective enforcement of good governance and transparent administration to counter the acute problems arising out of terrorism, corruption and hyper inflation.
Courtsey: The News
