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Essays On Global Challenges And Pakistan

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Lindsay Hughes
FDI Research Analyst
Indian Ocean Research Programme

 

Key Points

  • Despite overwhelming media coverage of Pakistan’s political challenges, it faces other, equally pressing issues.
  • These include threats to its food security, water security, energy security and demography.
  • If these challenges are not addressed in the very near future, Pakistan will remain at high risk of becoming a failed state.

 

Summary

Almost every analysis of the problems Pakistan faces considers for the most part its political issues and on-going existence as an insecure state. This may be traced back to historical problems, its many military coups, and its interactions with terrorist groups that have been proscribed by the West. While these facts cannot be disputed and remain critical to Pakistan’s security, they do not comprise the sum of its problems. This paper will, however, examine other equally pressing but under-reported issues such as falling agricultural production, water security, energy security, and demographics.

 

Analysis

Agriculture

Agriculture is the largest sector of Pakistan’s economy. It comprises approximately 24 per cent of Gross Domestic Product (GDP), employs roughly half of Pakistan’s labour force, and is the largest earner of foreign exchange with 67 per cent of export earnings. The most important agricultural products are wheat, cotton, rice, sugar cane and maize. With recent hikes in the international prices of pulses, onions, potatoes, chillies and tomatoes, however, these are gaining in importance.

According to the Pakistan Bureau of Statistics, production of the country’s main agricultural crops is as follows:

Legend:
Area is measured in 000’s hectares
Production measured in 000’s tonnes
Cotton measured in 000’s bales of 375 lbs. each
2014 Production figures are estimated

In 2011, Pakistan’s total agricultural land was 265,500 square kilometres. This equates to 1.66 km2 of agricultural land per 1,000 people. It compares well to India’s 1.47 km2 per 1,000 citizens but not as favourably as that of the United States at 13.2 km2 per 1,000 citizens. Using a different metric, only 27.7 per cent of Pakistan’s 79.61 million hectares is available for agricultural use, an altogether insufficient percentage given its salience to the economy.

There is, however, another threat to Pakistani agriculture. In 2008, Prime Minister Yousuf Raza Gillani visited Saudi Arabia. To help repay Pakistan’s burgeoning external debt, he reportedly offered the Saudis hundreds of thousands of acres of agricultural land in exchange for US$6 billion in financial and oil aid. To make the proposition attractive, Gillani also offered the Saudis (and subsequently other countries in the Gulf region) 99-year leases on their land holdings, the complete repatriation of all produce and profits and, the icing on a very rich cake, a 100,000-strong security force to protect their investments. This offer extended ex-President Musharraf’s Corporate Farming Ordinance, which was passed in 2001. The Emirates Investment Group and Abraaj Capital of Dubai soon acquired 324,000 hectares of Pakistani farmland.

Compounding the issue, it was also reported that rising demand for cotton and rice in the West, notably the UK, was draining the aquifers of the Indus Valley faster than they could be replenished. One author noted that Pakistan lost one hectare of agricultural land every twenty minutes. Another report notes that desertification and soil degradation affects around 68 million hectares of land across Pakistan. Soil degradation occurs due to water and wind erosion, reduced soil fertility, deforestation, unsustainable livestock grazing and water logging practices (little recharge and over-exploitation). An estimated 40, 000 hectares cease to be productive due to water-logging or growing salinity levels every year. Over-grazing and deforestation affect an estimated 24 and 11 million hectares, respectively.

These issues aside, poor crop planning and haphazard land usage often results in crops suited to a particular type of soil being grown in another. One example of this is the practice of growing basmati rice in the northern Punjab province where the soil is well-drained and loamy. Rice continues to be cultivated in this soil – no matter that it is better suited to grow pulses, maize, sunflowers and groundnuts – because rice provides a higher return.

Policies that address these issues must be put in place and rigorously enforced if this vital segment of the Pakistani economy is to be revived. Without such policies, the agricultural sector in Pakistan will continue to deteriorate, further dragging the economy down. Moreover, with Pakistan’s population expected to grow from 175 million people in 2010 to 235 million by 2030 and to 280 million by 2050, it is imperative that the agricultural sector be re-organised and made more efficient so as to meet current and future demand.

Water Security

A few years ago, the Harvard Law & Policy Review noted that water shortages present the greatest future threat to Pakistan as a viable state and society. Water shortages as Asia’s new battleground was further elaborated upon by Brahma Chellaney in 2011. Pakistan faces declining water availability and growing water pollution. Added to this are the issues of allocation, access to water, and distribution.

Given Pakistan’s overwhelming dependence on agriculture to sustain its economy, 90 per cent of its water resources are dedicated to this sector, leaving around ten per cent for drinking and sanitation. As a consequence, an estimated 40 to 55 million Pakistani citizens (around one-quarter of the population) do not have access to safe drinking water. It is also estimated that 630 Pakistani children die every day from waterborne diseases such as diarrhoea. This figure is also cited by independent agencies, such as USAid. Furthermore, in order to cater to Pakistan’s surging population, water from the Indus River has been diverted to Punjab Province to cater to agricultural demands there and for consumption in the towns and cities of Pakistan’s most populous province. This has caused a severe water shortage downstream in Sindh, for example, where the river has been reduced to a canal, livelihoods destroyed and entire ecosystems degraded.

The political system exacerbates Pakistan’s water woes. In 2009, for example, the army’s battles against the Taliban displaced an estimated three million people, many of whom moved with rural labourers to already water-starved cities, putting further pressure on water resources. Global warming is another factor reducing Pakistan’s water security. Pakistan’s primary source of water – the Indus River – depends on rainfall and snow in the western Himalayas. Many of the mountain glaciers, however, are reducing – in some cases by up to one metre each year. Furthermore, while another consequence of global warming will be flooding (at least initially), river flows will reduce drastically when the glaciers have completely melted. The World Bank estimates that there will be a 30 to 40 per cent drop in river flows by the next century. The beginning of this trend is perceptible: water availability per capita estimated at 5,000 cubic metres per capita per annum in 1951 fell to 1,100 m3 per capita per annum in 2006 and to around 1,000 m3 per capita per annum in 2010.

It is estimated that Pakistan allocates less than 0.2 per cent of gross domestic product to water supply and sanitation. This figure contrasts with the estimated 22 per cent of gross domestic product that is spent on its military. In response, Pakistan has initiated a programme to build more dams. The Diamer-Bhasha project, for instance, which was projected to cost US$12.6 billion in 2008 and is expected to be completed in 2016, will provide an estimated eight million acre feet of water. While this will be an immense boon to the country, it is estimated that 76 million acre feet of water can be saved by repairing its existing (and seeping) canal systems at a much lower cost.

Pakistan essentially faces a crisis of huge proportions if it does not take immediate measures to alleviate its water shortages and ensure that its people have access to safe water resources. The best way to achieve this is to ensure the viability of its river and canal systems. This would also assist at least a partial recovery of degraded ecosystems.

Energy Security

Pakistan’s daily demand for electricity is estimated to be an average of 16,000 megawatts. The power generated, however, is only 12,000 MW. In the summer months, this shortfall can reach 7,000 MW daily, resulting in power outages that can last between eighteen and twenty hours a day. This leads, in turn, to food being wasted, the inability of families to cook, and patients in hospitals being placed in danger. On the economic front, the lack of electricity has led to the closure of factories and workshop and low levels of foreign investment. In 2013, the Asian Development Bank estimated that power outages would reduce GDP growth by two per cent annually. It is acknowledged that the failure of successive governments to formulate a credible energy policy has led to this state of affairs.

Pakistan’s generating capacity is dependent upon oil-fired, thermal-based power plants. A gas shortage forced power operators to switch to imports of furnace oil, the price of which subsequently rocketed. Pakistan’s daily gas requirement was estimated at 6.5 billion cubic feet, as opposed to its supply of 4.26 billion ft3, a shortfall of 2.5 billion ft3. In June 2012, Pakistan had an installed capacity of 24,100 MW with available capacity estimated at 20,700 MW. Consumption of electricity in 2012, however, remained stagnant at 76,761 gigawatt hours (GWH), in relation to 77,099 GWH in 2011. Effectively, Pakistan’s consumption of electricity was less than 60 per cent of its installed capacity. This is due to the shortage of gas and the inability of the government to purchase furnace oil.

To compound the matter, a 2013 report by the Ministry of Petroleum and Natural Resources indicates that Pakistan’s energy demand is expected to grow by 4.37 to 6.09 per cent compounded over the next fifteen years. This growth in demand, which is contingent upon GDP growth, is likely to be between 116 to 148 million tonnes oil equivalent by 2022. Since Pakistan spends US$1 billion in oil imports per 1,000 MW of electricity generated, the continued reliance on oil to generate electricity becomes a very expensive proposition. This situation demands immediate steps be taken to address an issue that could be disastrous for Pakistan’s already failing economy if left unchecked.

One of those steps could be to increase solar capacity. At Parliament House, in Islamabad, a 1.8 MW solar plant, financed by China, was recently installed. It is expected that this plant will result in annual savings of up to US$1 million in the parliamentary electricity bill. If these savings are realised, it could provide the impetus to install solar plants across Pakistan. Pakistan has asked China to help it build a 10,000 acre solar park in Punjab province that can generate up to 1,000 MW of electricity. To further alleviate the lack of power available to households, one report suggests that solar panels be made available at economical rates. It estimates that the initial cost of converting a house to solar power is between US$3,500 to US$4,000. On the other hand, since solar panels can function effectively for up to twenty-five years, this cost will be spread over the time period, drastically reducing the overall cost. Pakistan depends on fossil fuel for about 65 per cent of its power generation, half of which has to be imported, leading to a loss of foreign exchange. The initial cost of establishing solar power facilities is more than compensated for by the savings accrued by reduced dependence on imported oil. To further reduce the initial cost of converting houses to solar energy, it is necessary for the government to reduce tariffs and taxes on solar equipment that is imported – essentially all solar components since none are manufactured in Pakistan and must be imported from China, Germany and Japan. The government must simultaneously encourage entrepreneurs to start manufacturing solar panels and other components by providing them with such incentives as tax holidays or reduced taxation levels for a period of time.

Similarly, Pakistan must explore the possibilities of investing in wind power in the Himalayan region and wave power along its coast. In effect, the government must expand its energy mix and utilise power from the renewable sector as much as possible.

In the interim, it is building a 600MW coal-fired plant in Karachi and hopes to import 1,000 MW of electricity from Iran. It is simultaneously working with China to construct two nuclear power plants in Karachi at a capital cost of US$ 9.1 billion.

Demographics

Pakistan had an estimated population of around 193 million in July 2013, with an urban population of around 36 per cent. Its population growth rate is estimated at just over 1.5 per cent, or close to 24 births per 1,000 population. It is expected to be the world’s largest Muslim-majority country by 2030 with 245 million citizens.

A major characteristic of Pakistan’s population is its youth. About 20 per cent of Pakistan’s 85 million voters (voting begins at 16 years of age), are between 18 and 25 years of age and another 15 per cent between 26 and 30 years. Approximately two-thirds of the population are under the age of 30 and the median age is estimated as being between 21 and 22.2 years. The 15 to 24 year age bracket is estimated to rise by 20 per cent in the mid-2020s and the under-24s will remain the majority in 2030. The median age will remain under 33 by 2050.

To convert this demographic into an asset, however, requires a better education system. Any major improvement to Pakistan’s educational system will require an enormous effort. Pakistan’s education budget stagnates at around 2.4 per cent of its gross domestic product. As noted previously, the military budget, in comparison, is estimated at 22 per cent. More than 40 million of its 70 million citizens in the five to 19 year age bracket do not go to school. The Planning Commission estimated in 2013 that Pakistan’s economy will need to grow at nine per cent annually if it is to provide meaningful employment to its 100 million-strong population under the age of 20; a difficult task since growth is currently projected at 3.6 per cent. Adding to the difficulty, Pakistan abolished its Ministry of Youth in 2010 and transferred that organisation’s responsibilities to the various provinces.

Pakistan could, ultimately, have to contend with an uneducated, or poorly-educated, unemployed youth who could, foreseeably, constitute a threat to the country. A major report indicates that “push” factors, such as socio-economic inequality and hard-line ideologies contained in school text books, and “pull” factors, such as the ongoing recruitment of potential terrorists, can only be detrimental to any chance of future economic growth, as well as creating a generation of uneducated extremists.

Essentially, a better educational system must be coupled with a superior energy infrastructure to create competitive employment opportunities if Pakistan is to remain a viable state.

In conclusion, Pakistan faces severe internal threats that need to be holistically and comprehensively addressed if there are to be positive outcomes. Apart from its many political crises (which will be examined in part two of this paper), it must contend with threats to its food security, water security, energy security and demography. Pakistan faces the real danger of becoming a failed state if it does not do so very soon.

 

 

 

 

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Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

 

 

 

 

 

 

 

 

Published by Future Directions International Pty Ltd.

80 Birdwood Parade, Dalkeith WA 6009, Australia.

Tel: +61 8 9389 9831 Fax: +61 8 9389 8803

E-mail: lhughes@futuredirections.org.au Web: www.futuredirections.org.au

 

 

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