The Threat of Climate Change to Pakistan's Economy

Although its carbon footprint is amongst the lowest in the world, the threat of climate change looms large for the country, with the potential to derail its economy. Coming as it does in the wake of several battles that the government is facing on the political-economy front, this news comes as a grim reminder to planners that serious, concerted and consistent effort is required to ensure that mitigation strategies are in place for the risks at hand.

The fact that this warning came from no one less than Dr. Pachauri, the Nobel laureate Chair of the IPCC, testifies to the credibility of the claims. Speaking at a recent conference on Climate Change organised in Islamabad by the Government of Pakistan, IUCN and DFID, Dr. Pachauri outlined the link between environmental sustainability and economic growth, pointing out the stress on public resources that changes in climate change can put, especially in areas such as public health. The Prime Minister was the chief guest at the conference and expressed governmental commitment to the cause, but I've always been wary of the ability of the planners to both accord due seriousness to environmental sustainability and to grasp the link between it, economic growth and public health issues. The UNDP Pakistan estimates that environmental degradation and neglect cost Pakistan Rs. 365 billion, although there are some encouraging signs, including the fact that Pakistan has been an advocate of looking to CNG as an alternative fuel to petrol and is in fact the largest consumer of CNG in Asia (see my earlier post related to this) and the UNDP believes that it is likely to meet the MDG targets for environment. But one is forced to think that when the problem is of the magnitude and depth that it is, much more than simply declaring 2009 as the 'National Year of the Environment' is required by the Government.

And importantly, the role of the private sector needs to be defined in addressing issues of sustainability, not only in their immediate spheres as business and corporate entities by employing more environment-friendly, efficient and cleaner technologies that meet regional and international standards, but also in terms of working with the government and communities, because the environment is everyone's business.

Pakistan's Hashoo Foundation Wins the World Challenge 2008

Back after a long hiatus, and with interesting news too: The Hashoo Foundation's Plan Bee project has won the 2008 World Challenge. The World Challenge competition, which is organised by the BBC, Newsweek and Shell, aims to recognise social entrepreneurship initiatives and the 7-member judges panel, which includes Richard O'Brien of Outsights and Dr. Camilla Toulmin of the IIED, selected Plan Bee over the the Agricultural School (Paraguay) and Shanti Sewa Griha (Nepal)projects.

Plan Bee helps female beekeepers in the northern areas of Pakistan boost their income by selling high quality honey. The project hopes to train and link around 215 women with the market by the end of 2009, helping with organic certification, participation in trade fairs and global recognition of the brand. Commendable effort indeed. You can watch the BBC clip on the project here.

Mind you, the Hashoo Group, which is the main sponsor for the Hashoo Foundation, has drawn considerable flak from the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF) which had been campaigning against the Hashoo Group over what it termed as 'Pakistan's longest-running labour dispute' relating to alleged 'sackings, harassment, violence and hardship' of members of the Pearl Continental Karachi Hotel Workers Union. The IUF stepped up its campaigning against the Hashoo Group in the wake of Plan Bee's shortlisting as a finalist, calling upon members and stakeholders to lobby against the hotel chain. Subsequent to Plan Bee's victory, the IUF also posted its regrets that the BBC Panel of Judges ignored what it claimed was the parent group's 'record of vicious union-busting' and chastising the judges for using a 'dubious Corporate Social Responsibility logic'.

This episode reveals two things: one, that there are always two sides to a coin; and secondly, that CSR begins at home. Without being privy to the details of the dispute between the Hashoo Group and the Pearl Continental Karachi Hotel Workers Union and without meaning to belittle Plan Bee's achievement, as a general comment it would be fair to say that CSR practices, principles and policies need to be internalised within the company itself before any entity can lay claims to following a CSR agenda. Anything otherwise would be a sham.

Capital Market Reforms Push Boosted by ADB Loan

The Asian Development Bank (ADB), has agreed to lend $400m to support the Government of Pakistan's efforts for initiating second generation reforms to strengthen the capital markets. The financing will be available as a 'program' loan, with releases in two equal tranches triggered by successful completion of agreed actions. ADB for its part believes that the loan will help turn the domestic equity and bond markets into, as ADB puts it, a viable source of long term financing.

The other interesting part about this program loan relates to its aim of strengthening the Securities & Exchange Corporation (SECP), the somewhat beleaguered regulator of all things corporate in Pakistan. Dogged by accusations of either being utterly lame or incurably intrusive and still suffering from the severe credibility jolts in the wake of its alleged role in the March 2005 stock market crash that saw some Rs.780 billion wiped off the Karachi Stock Exchange, the SECP is still struggling to get back on its feet, so much so that it has been reported that SECP may be replaced by another body by the name of the Financial Services Commission of Pakistan (FSCP). The ADB loan hopes to help make the SECP, or FSCP as the case may be, more independent, accountable and transparent. Sounds good, but is this simply throwing money at the problem?

Perhaps the ADB, my former employer, recognizes that it may have bitten off more than it can chew on this program loan, not only because of its scope but also because of the two year time frame. Reforms don't happen overnight, especially in countries where political commitment is shaky, so two years is tight. In all fairness though, money does act as an incentive to reform, and Pakistan's financial sector reforms have been one of the bright points over the last 7-8 years, especially when it comes to that other regulator, the State Bank of Pakistan, so we may still live to see the day when the lending bears fruit. I just hope that the reforms run deeper than a change in name of the SECP (a regulator is a regulator by any other name) and that the money doesn't end up as a convenient jar to dip into for satiating Pakistan's current appetite/designs for huge infrastructure projects. Program loans provide flexbility in use of funds to Governments but the flipside is that unless sharply defined, a program loan intending to foster reforms, can easily end up bankrolling a stream of projects alone. Oh the woes of fungibility of money!

Pakistan Fuels Its Enthusiasm for 'Green' Transport

As reported in the local press, some 7000-8000 vehicles in Pakistan are switching to use of Compressed Natural Gas (CNG) every month, while another 3000 new, factory fitted CNG cars will roll out in coming months. At this rate, the number of CNG powered vehicles will top 1.4 million by the end of the current fiscal year, helping Pakistan zip past Brazil in the number two position, with only Argentina in the lead with over 1.65 million vehicles--and counting--as reported by the International Association of Natural Gas Vehicles (IANGV). These figures are corroborated by the recently released Economic Survey of Pakistan, which notes that the number of CNG vehicles has jumped from 280,000 in 2001 to the current high of nearly 1.4m. The survey also reveals that from a mere 62 filling stations in 1999, there are now over 1400 filling stations in Pakistan. The CNG Station Owners Association claims that investment in the sector exceeds Rs. 46 billion, while the Government places a Rs.60b tag on investment in the sector, leading to creating 60,000 new jobs. With 5,700 more provisional licenses issued by Pakistan's Oil & Gas Regulatory Authority (OGRA), the investment figures and impact on the economy is only headed one way: up.

CNG is widely considered to be a cleaner fuel than petrol and diesel and cheaper to boot. Hence its popularity in developing nations. In fact, the statistics gathered by IANGV make an interesting read: the USA has less than 150,000 CNG vehicles, as compared to 292,000 in Iran and 410,000 in Italy. With all the talk about reducing carbon emissions, hybrid vehicles and environment-friendly public transport, the developed world could take its cue from the developing world. Even in the public transport arena, the South Asian countries in particular are streets ahead, with metropolis like New Delhi--where the Delhi Transport Company runs the world's largest fleet of CNG buses--Karachi, Lahore and Dhaka already promoting and implementing policies that call for a switch to CNG powered public transport systems.

While CNG may not be the perfect green transport solution--in fact it's not 'green' in the strictest sense of the term--till such time as Hydrogen or electric vehicles become commercially available and affordable--and till such time as our developing world urban planning allows us to squeeze in more pedestrian space or cycle tracks, it may be the most practical and environment-friendly option. I am watching with keen interest though, developments in the Philippines, where the electric jeepney project has just hit the road and which may open up new avenues for green public transport systems everywhere.

Pakistan bans advertising of spurious drugs: Are the advertising and media industries ready to swallow the bitter pill?

The Government of Pakistan has finally woken up to its responsibility to enforce a ban on advertising of spurious drugs. The Ministries of Health and Information have teamed up to take action in this respect and have announced their plans to tackle this public menace by involving the representative bodies of the media, including the All Pakistan Newspapers Society (APNS), Council of Pakistan Newspapers Editors (CPNE), Pakistan Broadcasters Association (PBA), Pakistan Advertising Association and Pakistan Electronic Media Regulatory Authority (PEMRA). In early 2006, the Supreme Court of Pakistan had taken suo moto notice of spurious drugs as a public interest issue, but as ever, the government's tardy response to an obvious problem epitomises its apathy towards public health hazards. But while we can all chuckle and indulge (yet again) in Government-bashing, what about the role the media has played--or not played in relation to this public menace? Clearly rubbishing the APNS Code of Ethics, the PTV Code of Advertising Standards and Practice, the PEMRA Ordinance and virtually any related legislation or self-regulatory mechanism that exists, the print and electronic media as well as the advertising agencies have shown scant respect for their responsibility to society. Whether its in the form of advertorials in the electronic media or print ads, advertising of spurious drugs is ubiquitous. As a former advertising man, I am at pain to see that the slide towards irresponsible corporate behaviour has been as swift and steep as it has. However, I do hope that the media and advertising industries in Pakistan can atone for its sins by working with stakeholders, including the government, to raise awareness about spurious drugs and the risks they pose. In a country where majority of the public turns to an unregulated health service market and where functional health literacy is very poor, spurious drugs pose a serious threat. I will soon be working with Marketing Association of Pakistan, Pakistan Advertising Association and the International Advertising Association (Pakistan Chapter) to run an advocacy campaign on Responsible Advertising, but I suspect that the best way to stop the spurious drug makers in their tracks--not publishing/running their ads--may prove too bitter a pill to swallow for a number of my colleagues.