LAHORE: Pakistanis hope their new prime minister will roll out high-profile projects that became his party’s trademark in its political heartland of Punjab, but financial woes threaten the optimism.
The Pakistan Muslim League-N (PML-N) won a reputation for getting things done with big-ticket schemes over the past five years in Punjab, the richest and most populous province.
A metro bus system in the provincial capital Lahore, the first in the country’, free laptops and solar energy panels for students and a network of high-quality schools in poor rural areas made Punjab the envy of Pakistan.
In the campaign for the May 11 general election, PML-N leader and now Prime Minister Nawaz Sharif and his younger brother and Punjab Chief Minister Shahbaz, promised similar schemes for the country. After five years of listless government under the Pakistan People’s Party (PPP), voters responded to the promise of action and handed the party a majority.
In Lahore, the Metro Bus which opened in February has revolutionised travel around the city, a traffic-clogged mishmash of colonial-era buildings, cheap housing and newer, more upmarket suburbs. The 27-station network on dedicated lanes and elevated roadways is run by a Turkish company and carries 120,000 passengers a day. It was built at a cost of 30bn rupees ($300m). Terminals offer a computerised fare system and commuters can use smart cards to avoid queuing, a welcome use of technology in a bureaucratic land where paperwork, preferably in triplicate, is still king.
The PML-N has promised to take the metro bus to Karachi, the largest city and economic heart of Pakistan, and the capital Islamabad.
Nawaz’s first speech in his third term as Premeir last week was strong on investment in infrastructure, particularly road and rail networks to link northern neighbour China to the southwestern port of Gwadar, taken over by Beijing. “All development projects will be completed before the completion of our five-years term so that people can get the fruits,” he said.
But populist projects do not come cheap and Pakistan is in a dire financial predicament, with a fiscal deficit in 2012 of 8.5 percent of GDP and growth in 2013 forecast at 3.5 percent — half what economists say is needed to absorb the growing young population into the workforce.
Also, foreign exchange reserves are dwindling, to just $6.6bn in late May, or less than two months’ export cover, down from $11.3bn a year earlier.
The opposition in Punjab said that the PML-N’s projects were marred by corruption and ran hugely over-budget, leaving other cities and districts under-resourced.
Islamabad is due to repay the International Monetary Fund more than $4bn by the end of 2014, putting pressure on currency reserves, and observers expect it to ask for another loan. That would come with tough conditions, including boosting the wretched tax collection, which brings in less than 10 percent of GDP.
Sharif has said he would welcome help from Turkey and China as he seeks to boost the economy, but analysts warn the projects could create extra burdens. “These are good projects but the government should be in the business of mobilising resources,” said Ashfaq Hassan Khan, Principal of the National University of Science and Technology Business School. AFP
