Needs come first followed by import substitution and then exports to earn foreign exchange. The basics like food, clothing and shelter (Roti, Kapra, Makan) must be covered for sustenance.
Policy makers must constantly watch the import bill for possible alternatives and indigenization. Agriculture is the backbone of our economy, yet it is widely neglected. There have been limited technology interventions in this vital field.
In un-divided India, Punjab was the food basket for the entire Sub-continent. While the Eastern part continues to feed Hindustan, the Western part of Punjab lags in Pakistan.
Food items are being imported. The recent wheat import scandal should be an eye-opener for the nation. Sugar is another disaster. Import of edible oil seeds consumes the sparse foreign exchange.
Pakistan leads the pack in the import of widely consumed tea leaves. Even fertilizers are being imported. Despite huge reserves of Coal (185 billion tons) fuel bill is unmanageable (around $ 26 billion).
Most indigenous ore reserves remain under-utilized with import of finished metals. The import lobbies seem to be in total control while the nation helplessly watches. Only once the needs have been met, smart nations look for exports. Import and kick-back lobbies must be contained to cover the basic requirements.
Till the year 2002, Pakistan was an energy surplus nation due to its huge Sui Gas reserves. Discovered in the year 1952, at 75 TCF (Trillion Cubic Feet) it was one of the world’s largest gas deposits. The country has an extensive gas transmission and distribution network spread over thousands of Kilometres, designed/built/maintained by local engineering know-how. The deposit should have lasted for a century but due to mismanagement it was depleted in half that time.
To meet the domestic needs LNG (Liquified Natural Gas) is being imported from Qatar, making it unaffordable. Efforts are under way to build a Coal-based energy system based on clean technologies.
Without affordable energy no nation can progress. The fuel bill can be cut into half by use of Coal-based energy. After Gasification the Black Gold can be used to produce several useful products like Urea, SNG (Synthetic Natural Gas), Diesel, Ammonia, etc. Currently, the Urea shortfall is being met through imports costing $ 200 million.
In a globalized world exports face tough competition. The free-market approach has caused free-fall of several economies. Every country should build on its strengths to compete while covering its weaknesses to survive.
Sectors must be carefully selected to compete at the global level without subsidies. Australia has decided to focus on mining and agriculture. World’s largest companies in these sectors are based there with massive infra-structure/networks.
BHP (Broken Hill Propriety) was the first company to sign for the development of Reko Diq in Balochistan. The company has projects in several countries with revenue in billions. Agriculture is not far behind.
Several plant and seed varieties have been developed there. On both sides of the M-2 Motorway Popular (Safada) trees of Australian origin have been planted. It is a fast-growing variety especially developed to lower the table in water-logged soils. The foreign exchange earnings are then used to cover the import bill.
China pursued a policy of self-reliance with major focus on energy and infra-structure development. Only after covering the basic needs, it ventured out for exports with massive investments in the manufacturing sector.
The current BRI (Belt& Road Initiative) is part of the plan to reach world markets. CPEC (China Pakistan Economic Corridor) is part of this programme. During my visit to the Shinua Headquarter in Beijing, I was amazed to see the control room from where the entire energy needs of the country are monitored and ensured.
It’s an empire that has its own Coal mines, Railway and Ships to gather the required inputs to generate energy. Recently in Lahore, I had the chance of visiting the control room of the Lahore Safe City project located in Qurban Lines which monitors the traffic of Lahore. It generates automatic challans for traffic violations. An energy starved nation like Pakistan needs such controls to ensure un-interrupted, affordable energy to bring down the import bill running into billions.
With several un-explored metal deposits there is a great potential in the mining sector. Opportunity at Saindak was missed. The project was leased out to the Chinese sub-contractor (Metallurgical Corporation of China) that developed the mine.
Two mines are operational at Thar where power generation has started with combustion of local coal followed by gasification soon. Work has started at Reko Diq under the new arrangements (50% Barrick Gold, 25% GOB, 25% GOP).
GOP is trying to sell its share to a Saudi mining company. Un-finished metal concentrates will be produced and then exported for downstream refining, ultimately resulting in imports (0.5 MTPY). Steel is also being imported (5 to 7 MTPY) while the Steel Mill has been shut down. These imports can be slashed by local production of finished metals to effectively meet our needs.
In real estate the three most important factors are location, location and location. Similarity for the development of nations it is needs, needs and needs.
One must first look inwards before venturing out. Imports and exports are only lucrative for the few at the cost of the many. A major course correction is required. The basics must be covered and within reach of the common man.
Copyright Business Recorder, 2024