Our unsustainable economy is challenging our survival and requires measures by Ministry of Federal Education and Professional Training (MoFE&PT), Ministry of Religious Affairs (MoRA) and Ministry of National Health Services, Research and Regulation and Coordination (MoNHSR&C) need to define the implementation of an education roadmap utilising 4.5% of GDP (versus 2.38%) over the next 20 years to provide analytical ability and skills for facilitating investment in energy, industry, medical, IT and hospitality industries, export of surplus skilled and unskilled - labour, farmers, nurses, doctors, technicians, engineers and computer science graduates to Gulf and the West.
Our focus is not to only ensure quota for Pakistan’s skilled and unskilled labour for Neom City but also to fill in gaps appearing due to demographic changes in the EU.
Measures by Ministry of Science and Technology (MoS&T), Ministry of Overseas Pakistanis and Human Resource Development (MoOP&HRD) with higher education commission (HEC), engineering development board (EDB) and national energy efficiency and conservation authority (NEECA) involve defining implementation of a technical roadmap to build engineering standards, encouraging research, product development/innovation including entrepreneurs with risk taking ability; utilizing 1.5-2% of GDP with a 20- year planning perspective.
Continuing challenge of low employability of Higher Education Institution (HEI) graduates has not dented enrollment. Before 2002, HEIs were delivering 200k undergraduates and by decade end there were 2,000k, of which 31% of students were unemployed with 51% being women.
HEIs’ lack of market orientation is hurting entrepreneurship; these are not providing skills of problem solving, creativity, critical thinking, effective writing and speaking ability neither individual grooming or instilling work ethics and values. This continues to be our “Achilles heel”.
Investment in education sector is not bearing results and requires HEC to stop over- regulating; instead start to provide guidelines and delegate revamp or upgrade of curricula to meet job market requirements to HEIs.
HEC has to limit itself to undertaking transparent rating/appraisal based on a testing process used by universities to select students for admissions.
Why has testing and appraisal system been stopped?
Focus of funding of GOP should shift to providing “need-blind access to quality education” and reverting the structure delivering “12% higher education enrollment rate of with students coming from international examination board constituting a higher percentage in the HEIs”.
What will assist would be focus to reduce fertility rate from 3.2 to 2 births per woman.
P3P, privatization and NGO schools constitute the norm today and there is need schools operated by private individuals and foundations be encouraged to establish public schools at division and tehsil levels, first in the under developed rural areas by taking over infrastructure from Provincial Governments or building new ones under a Universal Service Fund on lines of the telecommunication sector.
Resource Development happens extensively within GOP through internal, external and international training but apparently does not enlighten, encourage independent thinking, foster a culture of innovation, adaptability or risk taking.
The fault is due to lack of recognition of achievement, performance evaluation or of those who improve their skills due to culture of extensive political interference which nullifies institutional motivation to develop Human Resource resulting in a bureaucracy lacking capacity to effectively manage the complexities of modern statecraft.
Is merger of, for example, PSTD, Pakistan Institute of Management and Pakistan Institute of Tourism & Hotel Management, Virtual University with NAV&TTC, Foreign Office and FBR Tax training schools with LUMS, IBA and Civil Service Academy with NDU a solution? Should each medical college, IT institute and engineering university be mandated to focus on two specific areas of research and build areas of excellence?
For measures to increase employment, MoF&R has to be tasked to ensuring business environment that builds Tax to GDP ratio of 15% by 2027 and 20% by 2030, by taxing the untaxed; thereby reducing commercial debt to 11% from 22% presently, creating ability to improving social indicators from 2.1% to 4.5%, increase bank deposits to 50% from 35% with a mandate to significantly increase lending to non-government sectors, encouraging competition, deregulation, productivity enhancement and ease of doing business.
Austerity steps’ priority is replacing unfunded defined pension and gratuity schemes of Federal/Provinces (Rs1286bn in 2022-23, 11% of GDP by 2050) by contributory pension fund in Federal Government and 206 SOEs, this decade; not to forget FBR’s time-bound structural changes mandated of the Implementation Committee for FBR Reforms.
Not to forget facilitating process to payout Rs75k liveable wage in FY 2025 and inflation based increase thereafter; doing away with universal pay and aligning it to market, based on vocation and performance;
Ways for employment and productivity improvement in the agriculture sector require MoNFS&Research with MoE encouraging drip irrigation, new fertilizer policy for units to produce conventional and other types (e.g. Nano (liquid), Neem Coated) from a coal gasification plant, increasing research in seeds, increasing cultivable land to 60% (47.6% 2020), developing post-harvest infrastructure for export and packaging with provision of funds, discouraging absentee landlord, encouraging consolidation of land holding, facilitating deliverance of services, and documenting the economy in order to raising tax to GDP ratio to 35% (22.67% 2021) by 2030, including elimination of food circular debt- currently estimated at Rs1.2bn.
Ensuring competitive energy pricing to facilitate export, requires MoE to immediately ensure sector deregulation, implement improvement roadmap for transmission and distribution ($60-70b investment), generation ($30-40bn investment) and hybrid renewable energy by building on IGCEP (Integrated Generation Capacity Expansion Plan) and to develop with experts and knowledgeable persons an integrated lowest levelized cost energy plan.
How to recover GIDC (Rs445.6bn): build confidence in the sector by reducing the Rs 3 trillion circular debt, reducing T&D and UFG losses to under 12% and 7% by 2030, ensuring timely/regular revision of tariff for utilities to receive full cost of energy under one slab for gas and power with single unit of measurement of energy for better comprehension of users, needs to be acted upon, if there is will.
The forensic audit of revenue requirements for gas companies reflects lack of confidence on the SUIs and an approach to delay tariff increase.
Furthermore, in 3 months Petroleum Division will hire consultants to assess the magnitude of losses due to infrastructure degradation/gas theft/inefficiency and help find remedies.
Give mandate to BOD instead with OGRA (Oil and Gas Regulatory Authority) only monitoring results!
Optimum merit order based on Energy + Capacity Charge to understand the impact of (i) capacity payments of high capex projects, (ii) increase in solar MWs will soon result in “duck” demand needs to be better understood combined with committed efforts to shift peak demand by closure of commercial markets and encouraging conservation; instead peak hours duration has been extended to increase revenues.
Conducive business environment will increase electricity sale to industry versus current ratios of domestic (50%), industry (25%), agriculture (11%) and commercial (7%), optimize capacity payments, including reducing the challenge of investment in developing infrastructure to meet demand of gas and power by delivering one energy molecule to residences instead of two becoming the norm going forward. This requires change to the ROA formula of SUIs immediately.
Plans to tackle impact on ensuing grid/tariff structure due to addition of 25000MW per IGCEP, primarily based on Renewal Energy and a 5% peak demand growth is to be based on ensuring policy continuity, transparent bidding and honouring of subsequent contracts.
Capacity charges’ impact on power tariff due to RE needs a judicious review and understanding.
Strategy exercise based on an evolving scenario planning and economic diplomacy exercise should result in executable plans for IP gas pipeline project, TAPI, energy storage, import infrastructure, refinery and petrochem, coal gasification, NS Pipeline, CASA 1000, E&P, etc., to deliver energy security and regional play, deliverance of reasonable cost of energy and an approach to overcome our increasing imported energy challenges.
Mineral sector should no longer be within the domain of MoE and presentations within 30 days to PM on Weighted Average Cost Of Gas, offshore and tight gas, mineral sector and energy efficiency standards for home appliances (only?) are awaited.
Overall, a tall task but much-needed one and the measures taken will reflect intent and will of GOP to execute the difficult measures and correct our wayward approach.
(To be continued)
(The writer is an experienced professional who has held leadership positions in Pakistan State Oil (PSO) and Engro/Exxon Chemical, developed 210 MW plant using flared gas and Pakistan’s first LNG import infrastructure in a record 300 days. He can be contacted at [email protected])
Copyright Business Recorder, 2024
The author has served as Managing Director of Pakistan State Oil (PSO) and CEO of EETL, EVTL, and ETPL. He can be contacted at [email protected]
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