Despite the number of initiatives taken for infrastructure development, Pakistan has so far remained unsuccessful in changing its reputation for poor logistics.
In its report released last week, the World Economic Forum ranked Pakistan 112th in the Enabling Trade Index (ETI) 2010 out of 125 countries. Thats a drop of 12 places over last years ranking.
Details of the finding indicate that ranking was weighed down by poor performance in major categories such as domestic and foreign market access, transparency of border administration and physical security.
Likewise, in a separate study by World Bank earlier this year, Pakistan was ranked 110th out of 155 countries in Logistics Performance Index - lagging far behind Bangladesh 79, India 47 and also China that ranked 27.
World Bank said the country failed to improve on any of the basic factors of its competitiveness, such as customs, infrastructure, logistics quality and competence and timeliness.
Though, it is difficult to quantify the exact cost borne by the economy due to poor logistic infrastructure, World Bank estimates the number to be around 4-6 percent of GDP each year.
In this context, the revised PSDP for fiscal year 2009-10 to around Rs250 billion, which is nearly 39 percent lower than allocated amount, has further dented development activities.
It means that infrastructural gap between Pakistan and its competitors would widen. Other developing and emerging economies like China and India are continuously working towards the improvement of their manufacturing and agriculture sectors.
Unless development plans are executed on an urgent basis, these critical shortages in infrastructure setup will weaken governments efforts to improve socio economic indicators, health, education and poverty reduction.
Given Pakistans hand-to-mouth fiscal position, future economic prosperity depends on taking bold steps and identifying key areas, which are crucial to underpin trade growth. In this regard, there is a need to incentivise foreign companies to invest in Pakistan, primarily in areas such as sea ports and shipping, cargo handling and the power sector.
Lastly, strengthening trade ties with economies that are in geographical proximity of Pakistan, primarily Middle Eastern countries and diversification of exports to untapped markets, such as African and other Central Asian countries, should be the order of the day.
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RANKING PAKISTAN
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WEF Enabling Trade Index 2010 Index (Ranks out of 125) 112
1st pillar: Domestic and foreign market access 120
2nd pillar: Efficiency of customs administration 60
3rd pillar: Efficiency of import-export procedures 69
4th pillar: Transparency of border administration 100
5th pillar: Availability and quality of transport infrastructure 72
6th pillar: Availability and quality of transport services 91
7th pillar: Availability and use of ICTs 97
8th pillar: Regulatory environment 80
9th pillar: Physical security 125
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Source: WEF
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