Infrastructure Development in Pakistan

[Edevelop]

Revenue collection does not mean Karachi or Sindh gets to spend that money.

The sum assigned to the Provincial Governments under Article 3 shall be
distributed amongst the Provinces on the basis of the percentage specified against each:-

(a) Balochistan - 9.09%
(b) Khyber Pakhtunkhwa - 14.62%
(c) Punjab - 51.74%
(d) Sindh - 24.55%

http://www.finance.gov.pk/budget/budgetinbrief_2011_12.pdf

Fact: Punjab holds about 50% of Pakistan's total population...

It has been proven that Punjab government has allocated money in the right areas. We have people to feed (in federal gov's growing inflation rate), build homes, grow employment so people don't run off elsewhere, stop terrorism, etc... Whenever there is little room in the budget, Shahbaz Sharrif has spent it on New Metro Bus, flyovers, road cleaning cars, laptops for students, homes for deserving old, and disabled labourers...

Now what do you have to say?

 

[Armstrong]

Real estate is part of the infrastructure needed to support industrialization. Construction creates jobs and stimulates the economy which supports consumption & demand for products that industrialists then invest to produce.

Haq's Musings: Housing Construction and Economic Growth in Pakistan

The case of Abu Dhabi doesn't apply to Pakistan because Pakistan has a large local population that can easily absorb new commercial buildings & housing with high occupancy rates.

The same rationale was applied in the United States ! Building plazas and shopping centres does nothing but create a 'Consumption' based economy - Case in point : Greece. As for housings I fear that the same thing will happen here as it did in the United States i.e giving out loans to people without a proper financial appraisal; until now, thankfully, the State Bank is a complete bit*ch when it comes to relaxing regulations on the 'Commercial Banks' ! What we need is true 'Industrialization' where the economy is not driven because of greater demand which can in turn be met with an ever rising 'Import' bill but rather a much stronger 'in-house' economy along the lines of China or if we're looking for an example closer to our tonnage - Iran ! Countries like Saudi Arabia, Kazakhstan, Turkey are building all of that 'Real-Estate' after (or simultaneously with much deeper emphasis on this) having invested considerable capital in developing their local industries whereas we are following the Greek model whereby our consumption is sky rocketing but the industries within our country, to assuage that consumption are closing up ! Not a sustainable model !

 

[darkinsky]

Fact: Punjab holds about 50% of Pakistan's total population...

It has been proven that Punjab government has allocated money in the right areas. We have people to feed (in federal gov's growing inflation rate), build homes, grow employment so people don't run off elsewhere, stop terrorism, etc... Whenever there is little room in the budget, Shahbaz Sharrif has spent it on New Metro Bus, flyovers, road cleaning cars, laptops for students, homes for deserving old, and disabled labourers...

Now what do you have to say?

the fact is punjab doesnt pay taxes, so it eventually has lot of money to spend, or the txes they collect dont show to the federal govt and spend all their taxes in their own provinces, while entire 20million kaachi pays taxes and is distributed to other provinces

 

[yyetttt]

Punjab get's the most national budget why?? It should go to Balochistan and Sindh instead which are in need of developing....

Why if Punjab gets most budget, still skyscrapers are not popping up in Lahore? because punjab politican are corrupt (PML-N) thats it...

 

[Edevelop]

@ Armstrong.
I'm glad you pointed out Saudi Arabia. Believe me, even though they have a monarchy, they have managed to keep things sustainable. As far as Real-Estate market is concerned, there is no a single Saudi on the street. Its bare minimum because the government cares to keep things equal...
Though we may call them 'beduins or 'badu', these same people have used their revenues from Oil to build alternatives. They are not gonna ever go bankrupt even with hajj/umra,gold, and foreign investments in hand etc.... They have built factories in the desert that make chocolate dates to yogurts. 15 years ago, the prices of food even for imported ones is still more or less the same.
Providing people with basic needs is what i consider as a foundation of a sustainable country.

 

[Edevelop]

@ Darkinsky & JelloDragon:

As i stated before Punjab hold 50% of Pakstan's population. 51% given to us is fair.

There is nothing to spend in Sindh except in Karachi. Rest of Sindh and most of Balochistan is run by landlords and you know very well how they allocate money, basically in their personal investment and in their own pockets. I would advise you to kick their a$$ first before Punjab gives its own share. Don't blame all your mess on Punjabis! Its your problem and your provincial government is responsible!

 

[RiazHaq]

The same rationale was applied in the United States ! Building plazas and shopping centres does nothing but create a 'Consumption' based economy - Case in point : Greece. As for housings I fear that the same thing will happen here as it did in the United States i.e giving out loans to people without a proper financial appraisal; until now, thankfully, the State Bank is a complete bit*ch when it comes to relaxing regulations on the 'Commercial Banks' ! What we need is true 'Industrialization' where the economy is not driven because of greater demand which can in turn be met with an ever rising 'Import' bill but rather a much stronger 'in-house' economy along the lines of China or if we're looking for an example closer to our tonnage - Iran ! Countries like Saudi Arabia, Kazakhstan, Turkey are building all of that 'Real-Estate' after (or simultaneously with much deeper emphasis on this) having invested considerable capital in developing their local industries whereas we are following the Greek model whereby our consumption is sky rocketing but the industries within our country, to assuage that consumption are closing up ! Not a sustainable model !

Let me try and help you understand what I wrote earlier.

The US is a highly developed country that already has massive infrastructure and housing and any comparison with a developing country like Pakistan has no relevance here. Pakistan needs lots of housing for its growing population and lots of infrastructure to support it.

And Greece is not relevant here because Greek debt is several times the size of its GDP while Pak debt is only about 60% of its GDP.

Consumption is the backbone of every economy any where. Without consumption, there would be no investment and no production. So consumption is a good thing. There will be no industrialization either if there is no consumption. Who would the industries sell their production to in the absence of robust consumer demand?

Haq's Musings: Pak Consumer Boom Fuels Underground Economy

 

[Omar1984]

Punjab get's the most national budget why?? It should go to Balochistan and Sindh instead which are in need of developing....

Why if Punjab gets most budget, still skyscrapers are not popping up in Lahore? because punjab politican are corrupt (PML-N) thats it...

Balochistan is barren desert land where terrorists kill whoever is not Baloch. Forget it. Eve if we try to develop Balochistan and someone from Sindh or Punjab wants to work there, they'll be shot.

Punjab has the largest population and welcomes everyone. It should be given priority.

 

[Hyde]

80% of Pakistan's businesses are HQ'ed are in Karachi or Sindh. Karachi LTU contributes 70% of Pakistan's revenue along with fuel and gas resources from Karachi Port, Port Qasim and countless other contributions to Pakistan. People in Sindh work hard and pay TAX unlike Ganja Bros and Chaudaries of Pakistan. This proves your theory incorrect and unwise.

I think this is incorrect. I have heard this rumour many times but I don't think Karachi alone contributes 70% of Pakistan's revenue keeping the fact that most of the industrial areas in Pakistan are located in Punjab. I think 70% figure is referred to something else. BTW useful information for you

Textile and Manufacturing:

Punjab accounts for almost 60% of all industrial value addition in Pakistan
Large-scale manufacturing sector constitutes 55.03% of value addition
in the sector
Manufacturing sector has a 15% share in the National GDP and 25.7% in
the GPP of Punjab
Manufacturing sector growth was over 10% per annum from 2004 to 2007
A survey of 8006 industrial units revealed that these units provide employment
to over 841,000 people
Total investment in these projects topped Rs. 736 billion in Punjab
Large scale manufacturing sector grew at over 14%

Textile:

60 % of Pakistan's export comprise of textiles
Punjab contributes to over 70% of Pakistan's cotton production
Nearly 99% of the country's handloom units are located in Punjab
Total textile units: 11,820
Ginning industries: 6,778
Punjab is the 6th largest producer of cotton in the world
Punjab contributes about 70% of the total cloth production and 57% of the
total yarn production
Textile is the largest single determinant of growth in manufacturing sectors
About 42% of large scale industry is derived from textile sector
Punjab has very well established vertical linkages
Employs over 38% of the total labor force
With over 320 units in place, total cotton yarn production is 870 metric tons
Total cotton cloth production reached 401 million meters
Total jute production at137, 000 metric tons
Total wool production topped 4.5 million kgs.

Punjab's share in textile Production in Pakistan :

Cotton yarn - 69.2 %
Cotton Cloth - 52%

Punjab share of world textile Market :

Cotton yarn - 32.8%
Cotton Cloth - 8.1%

Punjab Textile production efficiency (against installed capacity)

Spinning - 70%
Weaving - 54%
Processing - 60%
Knitting - 65%

Punjab Board of Investment & Trade

and if you remember Pakistan's major production is agriculture and textile and both of these industries are located in Punjab it is difficult to believe that Karachi alone contributes 70% of Pakistan's revenues.

 

[Armstrong]

Let me try and help you understand what I wrote earlier.

The US is a highly developed country that already has massive infrastructure and housing and any comparison with a developing country like Pakistan has no relevance here. Pakistan needs lots of housing for its growing population and lots of infrastructure to support it.

And Greece is not relevant here because Greek debt is several times the size of its GDP while Pak debt is only about 60% of its GDP.

Consumption is the backbone of every economy any where. Without consumption, there would be no investment and no production. So consumption is a good thing. There will be no industrialization either if there is no consumption. Who would the industries sell their production to in the absence of robust consumer demand?

Haq's Musings: Pak Consumer Boom Fuels Underground Economy

Thank You, Mr.Haq; now allow me to elucidate better !

Under the Capitalist Model consumption is indeed 'the backbone of every economy'; however any economy worth its salt tries to feed that consumption locally ! Now I'm not asking Pakistani to manufacture everything locally or even the majority of things; however tis also true that Pakistan's industrial growth is not only regressing but any future prospects for a reversal looks bleak at best ! In the meantime, however, the consumption is growing because the populations continues to grow and so does our service industry and hence the emerging 'middle-class' ! Unfortunately what should present itself as an opportunity i.e a burgeoning middle-class, has turned into a possible quagmire because we've got mouths to feed but not nearly enough jobs to provide which means we're going to have to borrow more and more to subsidize 'roti, kaprat and makan' whether at the local 'tandoors' or in the 'Government sponsored housing projects'; hence why the Greek example was ever so relevant....their debt grew to pay for all the Government spending whereas their industries (once they had an envious shipping industry) started going bust ! However they, unlike, us had the Euro to ensure that their foreign exchange reserves weren't empty; we, unfortunately, don't even enjoy that facility !

So in short, my friend : Whereas an increase in spending is supposed to induce a proportionate increase in production to cater to that demand i.e more businesses keep popping up, here in Pakistan the demand is ever increasing but because of our self-induced unfavourable conditions (the WOT, the Power Shortages, the Insurgency in Balochistan, the Militancy in FATA, the blatant corruption and nepotism of our government etc.) we've ensured that any semblance of local production to account for some of that demand and thereby induce economic growth in Pakistan and for Pakistan by exporting some, roping in foreign and domestic investment and increasing the size of the 'internal economy', remains a gargantuan task !

 

[Nishan_101]

I think GoP should give KRL some money to open up a new facility in the Province of Sindh, and try to R&D on Thorium based Nuclear reactors that are good and helpful for the environment as well. As they eat up the diplated Uranium as well as other radio active materials too. More over, they must also concentrate on other technology development like LASER and other Nuclear Sciences.

 

[RiazHaq]

I think this is incorrect. I have heard this rumour many times but I don't think Karachi alone contributes 70% of Pakistan's revenue keeping the fact that most of the industrial areas in Pakistan are located in Punjab. I think 70% figure is referred to something else. BTW useful information for you



and if you remember Pakistan's major production is agriculture and textile and both of these industries are located in Punjab it is difficult to believe that Karachi alone contributes 70% of Pakistan's revenues.

More than half of Pakistani govt revenue is collected in Karachi because it's the main port of entry and exit for bulk of trade which is taxed (custom duty & sales tax), as well as the massive industrial output of Karachi which accounts for about 20% of Pak GDP. Agriculture also accounts for 20% of GDP but pays no income tax.

 

[RiazHaq]

Thank You, Mr.Haq; now allow me to elucidate better !

Under the Capitalist Model consumption is indeed 'the backbone of every economy'; however any economy worth its salt tries to feed that consumption locally ! Now I'm not asking Pakistani to manufacture everything locally or even the majority of things; however tis also true that Pakistan's industrial growth is not only regressing but any future prospects for a reversal looks bleak at best ! In the meantime, however, the consumption is growing because the populations continues to grow and so does our service industry and hence the emerging 'middle-class' ! Unfortunately what should present itself as an opportunity i.e a burgeoning middle-class, has turned into a possible quagmire because we've got mouths to feed but not nearly enough jobs to provide which means we're going to have to borrow more and more to subsidize 'roti, kaprat and makan' whether at the local 'tandoors' or in the 'Government sponsored housing projects'; hence why the Greek example was ever so relevant....their debt grew to pay for all the Government spending whereas their industries (once they had an envious shipping industry) started going bust ! However they, unlike, us had the Euro to ensure that their foreign exchange reserves weren't empty; we, unfortunately, don't even enjoy that facility !

So in short, my friend : Whereas an increase in spending is supposed to induce a proportionate increase in production to cater to that demand i.e more businesses keep popping up, here in Pakistan the demand is ever increasing but because of our self-induced unfavourable conditions (the WOT, the Power Shortages, the Insurgency in Balochistan, the Militancy in FATA, the blatant corruption and nepotism of our government etc.) we've ensured that any semblance of local production to account for some of that demand and thereby induce economic growth in Pakistan and for Pakistan by exporting some, roping in foreign and domestic investment and increasing the size of the 'internal economy', remains a gargantuan task !

The industrial sector in Pakistan has grown to about 27% of GDP from almost zero in 1947 while agriculture contribution to gdp has dropped from more than 50% to about 20% now. The biggest growth spurts in industrial production have occurred in 1960s, 1980s and 2000-2007. None of this would have happened without infrastructure construction and rise in middle class consumption.

Haq's Musings: 1999-2009: Pakistan's Decade of Urban Middle Class Growth

 

[Fasih Khan]

The industrial sector in Pakistan has grown to about 27% of GDP from almost zero in 1947 while agriculture contribution to gdp has dropped from more than 50% to about 20% now. The biggest growth spurts in industrial production have occurred in 1960s, 1980s and 2000-2007. None of this would have happened without infrastructure construction and rise in middle class consumption.

Haq's Musings: 1999-2009: Pakistan's Decade of Urban Middle Class Growth

Interesting, Are you Riaz Haq of Haq Musings. If Yes, Sir We have alot to learen from you. I'm pleased to meet you here at PDF.

 

[Armstrong]

The industrial sector in Pakistan has grown to about 27% of GDP from almost zero in 1947 while agriculture contribution to gdp has dropped from more than 50% to about 20% now. The biggest growth spurts in industrial production have occurred in 1960s, 1980s and 2000-2007. None of this would have happened without infrastructure construction and rise in middle class consumption.

Haq's Musings: 1999-2009: Pakistan's Decade of Urban Middle Class Growth

Mate, no one is disputing that ! I'm simply stating what should be obvious : Consumption leads to growth but if the local industries that should have capitalized on this impetus provided by that 'consumption' keep closing up, what appeared to be an opportunity becomes an increasing reliance on imports. So, my friend, unless we can find ways of beefing up local supply to meet the ever increasing demand what possible benefit does Pakistan derive from all this 'middle-class consumption' if more than half of it (if not more in the future) is imported from China, India or elsewhere ?