FOOD 4 THOUGHT: Economic effects of intangibles

By: DR ZAFAR ALTAF

November 30, 2013

food-4-thoughtFood 4 Thought: Economics especially development economics is in limbo for sometime. The excitement of the dismal science is not there anymore. Quantification of variables of development (growth-market development-employment, etc) are mere indicators exhorting the country (s) to do more and related to welfare. As a result, over the years, development of a country is linked to the hopes that can be rekindled in the minds of the population. My contention is that like in cricket there is no bad cricketer (some have more good days while others have less) there is in every politician some good policies and some that are non-starters. So when I see all that shouting on TV I only feel is a manifestation of personality aberration (s). All those present try and out-shout the others. Good for their lungs.

Seriously when a policy comes into effect as a result of a thoughtful process the benefits should outweigh the costs and we have so many measures of quantification like the internal rate of return and these are generally measured as a ratio. But do these macro and aggregate figures really reflect the development aspects of different regions of Pakistan. Take any policy whether it be in industry, agriculture or the services sector there are excessive differences in the regional
aspects and since Partition these have increased. The reflections and manifestations of these policies are then become visible in the social deterioration or otherwise of the disharmony that then prevails. Consider any aspect of any policy. One has been witness to these policy variables for now nearly three decades. WAPDA is not a flogging horse for if it becomes so it is because of its policies. When the World Bank conceived of Wapda the intentions must have been for the good of Pakistan; a centralised authority looking after water and electricity at the national level. I recall that the national grid system was to be established and the philosophy was that when there would be surplus electricity in the north it would be supplied to the south and vice versa. Has it worked because no one realised the impact of having shortages in the entire country leave alone north and south? Where are we today? The engineers are having a field day. KB dam was first conceived in 1924 and I have those documents and those drawings, interestingly enough done by an executive engineer whose mathematical skills seemed to be astonishing. Besides being a valuable document it is an indicator of the effort that was put in by executive engineers. Ground level realities were never ignored.

The debate rages on. I have seen this debate from the first time when it emerged at the annual National Economic Council (NEC) meeting that was chaired by General Ziaul Haq. During the meeting, General Fazal-e-Haq declared that KB was not acceptable to the people of the then NWFP. There was no debate but there was an altercation which ultimately led to General Ziaul Haq leaving the Chair and the meeting under a pretext – a ploy he used whenever he wanted to show his annoyance. From experience I knew that he would be missing for the next three to four hours till he cooled himself.

Thereafter I have been witness to the stand for and against taken by our non-elected Presidents and elected Prime Ministers. The efforts were made by the last President Musharraf through the current coterie of engineers and he used many ploys. Ministry of agriculture also made a presentation and opposed its construction. The present coterie of well-wishers of Pakistan were interested in its construction when the President overruled the ministry and asked the Wapda Chairman to go ahead.

Well he went ahead and lost his job. I do not want to recall the sequence of events.Now for the massaging of data which all of us learn when appearing in science experiment

examinations. The views expressed by these policymakers are that it is essential for agriculture as we are a water-stressed country. Why are we water-stressed because our agriculture requires more water and if we do not have it we will starve? Our water does not speak. The engineering elements for whatever intentions speak a lot. To million acres will come under irrigation and we will produce more for our nation. Fine. Why and how has this been calculated? The loss of 4 to 5 million hectares of land to urbanisation means that excess of water is already available and that the water budget should be explained by WAPDA and its cohort consulting organisation NESPAK – consisting of all retired WAPDA officials. How much land could be irrigated from this water? Have they given it to their mamoos (maternal uncles). Musharraf also tried a ploy cleverly and he appointed a former irrigation secretary from Sindh to head a committee and to report on the issue. He used the resources and that report went against the wishes and aspirations of the engineers. The data has been purposely misconstrued by the present advocates of the project. Next there will be hydel electricity which this country requires and the cost would be three rupees or so. The calculations are incorrect. It has been my experience that all water and electricity projects have been badly misconstrued by the planning engineers who show less cost and more benefits; in other words, they temper with the numerator and the denominator of the C/B analysis. For them C/B is dogma and doctrinaire. Not for me. If a project is manipulated as this one is the unsuspecting public is being led astray. Why? The engineers may believe that it is necessary but ask yourself why has been sowed off the table by all and sundry. Now for water shortage; the high water delta crops do not require water as it is used today. China has decimated the Gobi desert and is now growing rice with drip irrigation. Sugarcane is a barani (rainfed) crop. This has been experimented in Chakwal and it is surviving with more sugar content than the irrigated sugar. Further, there is growing evidence that sugarcane tolerates saline water and some countries have even grown it with sea water. Period.

The other factor to take into consideration is the macroeconomic indicators. KB is not additionality but a replacement for the storage loss of Tarbela. Waters. Why did Wapda not carry out watershed management to minimise silt? The cost that these engineers are stating is engineered for the past examination of their projects shows that the cost of the project increases many times and the time period of completion is not adhered to. Who will pay what for the debt that is incurred and the benefits if any will be in fifteen to twenty years? Can we afford more debt?

The debate will go on. The water application use efficiency in agriculture is about 12 to 13 %; made more severe by our use of chemical fertilisers. The world has moved and the debate can be made more thoughtful by not playing the cards that are misleading. But that is asking for the moon for we selectively use these variables to our advantage. Let the Lahore Chamber of Commerce call for a debate and invite all the provincial objectors. They are conscientious objectors.

Courtesy Business Recorder

 

Food 4 Thought

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