This is apropos a Business Recorder op-ed “Infrastructure financing gap” carried by the newspaper the other day. The writer, Zafar Masud, deserves praise for throwing light on a subject of such high import.
This brings to mind a World Bank report that has estimated that India will need to invest $840 billion over the next five years into urban infrastructure if it is to effectively meet the needs of its fast-growing urban population.
In my view, Pakistan too needs massive investment in urban infrastructure, of course much lesser than India’s, to deal with this challenge in an effective and meaningful manner. In other words, Pakistan needs over USD 120 billion by 2040 to meet its infrastructure financing needs.
The relevant authorities are therefore required to pay heed to what the learned writer has said in his article: “If we forecast a 10-year GDP for Pakistan, the requirement for infrastructure financing is around PKR 5 trillion a year, which is obviously not possible through the current funding pot of term deposits and required substantial improvement in treasury management to be equal to this mammoth task of outstanding infrastructure financing.
I must admit that the banks have not done enough in the arena of infrastructure financing, and will not be able to do so going into the future either, unless there is a real shake-up in the framework, and a robust incentive structure is put in place.” In my view, therefore, the government or the relevant authorities will be required to make concerted efforts aimed at arranging financing in order to develop or execute public-private partnership (PPP) infrastructure projects.
Saima Mohsin (Islamabad)
Copyright Business Recorder, 2023
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