A Pakistan that works
BY S A K I B S H E R A N I | 8/21/2015

THE country`s Independence Day was celebrated with unusual fervour this Aug 14 after a lapse of years. A wave of optimism appears to be sweeping the country, stemming largely from the military`s campaign of `clean-up` from Waziristan and Fata to Balochistan and Karachi. A veil of gloom that had settled on the country with ever-increasing corruption, loot and plunder has suddenly lifted, though `ifs` and `buts` remain whether the perpetrators and hidden actors will truly face justice or not.

Enemies of Pakistan are exhibiting their discomfort, and have publicly announced their intentions to intensify efforts to destabilise our country. These efforts have been going on for decades, but have reached alarming proportions since the mid to late2000s with infiltration of different segments of society by those following inimical external agendas.

The breadth and scale of infiltration appears to span political parties, media, TV anchors, op-ed columnists and even the Tehreek-i-Taliban Pakistan and different militant outfits.

One effort of non-friendly actors is to breed a psychosis of despondency and fear within a target population. This serves multiple purposes, among them breeding anti-nationalistic feelings among marginalised and vulnerable groups, as well as a lowering of a population`s will and capacity to fight. Even patriotic commentators and I count myself as one of them have perhaps unwittingly contributed by focusing exclusively on the negatives in Pakistan`s situation.

Over the past two years, I have tried to balance my pessimistic assessments with hopeful ones too, like many others who have tended to highlight the positives. However, in doing so, I have appeared schizophrenic to many (including to myself!) even though this state neatly captures the `between hope and despair` situation the country has found itself in.

As part of the `hopeful` series, I have highlighted Pakistan`s economic potential as well as its rather good historical performance till the 1990s. I have also touched upon the history of protracted internal conflict and struggle of some other countries with narco-militant and organised crime groups (Colombia, Italy), as well as the tepid past economic performance of many of today`s rising, emerging market stars. In this context, one can also talk about Pakistan`s physical infrastructure. Surprising though it may seem, in the midst of the protracted energy crisis the country has been facing, the country`s physical infrastructure has been fairly decent and adequate in the main, in a historical perspective, thanks to large-scale public sector investments in the 1960s-80s. For example, the road network across the country, even in rural areas, is surprisingly good for the most part. Past investments led to world-scale dams, Tarbela and Mangla, the Karakoram Highway, a national power transmission and distribution network; investments in the 1990s helped create motorways, and new international airports in Lahore and Karachi, among other projects.

This is not to suggest that infrastructure bottlenecks are not present and growing. Pakistan`s stock of physical infrastructure needs upgrading, modernising as well as up-scaling to meet the requirements of a growing population that is also rapidly urbanising. With a growing population, and massive under-investment since the 1990s, new shipping ports, airports, water treatment and desalination plants, dams, urban mass transit systems, power generation and transmission and distribution, are all required. The good news is that some of these mega-investments are being made, slowly and incrementally.

(Where Pakistan has fallen short and consistently not done well, virtually throughout its history, is in the area of its social indicators and human capital development; these have always remained underdeveloped and below-par.) A few areas of performance and strength rarely get a mention. My objective in this column is also to highlight two of these, both of which can, and do, make a big contribution to the smooth functioning of the state as well as the economy.

The first of these is the country`s citizen registration system and national database, managed by the National Database and Registration Authority (Nadra). Registration of citizens, keeping track of births and deaths, arrivals and departures, naturalisation etc. and maintaining a national database of the same, have always been regarded as a primary state function. Post-9/11, it has become of critical importance. The massive investment made in the creation and maintenance of this database has paid off repeatedly. Terrorists as well as their victims have been identified from here, while smart cards have been issued to flood affectees in 2011 and 2012 for claiming compensation based on the Nadra database. Similarly, those displaced by the 2009 Swat military operation were also issued special cards by Nadra.

More generally, the CNIC is now a mandatory requirement for a host of economic transactions, be it the purchase of a car, a house or plot or an air ticket, or the opening of a bank account. It has huge potential to document the economy more fully a l

The other `soft` infrastructure soft because it is largely unseen that is making a tremendous contribution is the country`s financial payments system. A payments system is the backbone of the economy and commerce, as it facilitates the movement of funds and payment for transactions via the financial system.

In Pakistan`s case, the payments system has been an unsung hero in the country`s economy, especially with its role in facilitating remittances via banking channels. With the growth of mobile telephony, Pakistanis are increasingly becoming familiar with a more recent innovation mobile or branchless banking. While the total value of transactions handled by the payments system in the third quarter of FY15 alone was over Rs 51 trillion, over R s 67 billion was transferred using mobile bank

The bottom-line: Pakistan is not as dysfunctional and dystopian as it is made out to be. With better management of the economy and natural resources, investments in the right places especially in the social sector a greater inward focus in managing our affairs, and an emphasis on laying the grounds for rule of law, there is no reason why Pakistan should not resume its interrupted development path.

The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad

Published in Dawn