Punjab National Bank Deposit Schemes

Money woes cloud Pakistan infrastructure boom hopes.

Summary: Pakistanis are hoping their new prime minister will roll
out high-profile projects that became his party’s trademark in its
political heartland of Punjab, but the nation’s dire finances
threaten the optimism.

Pakistanis are hoping their new prime minister will roll out
high-profile projects that became his party’s trademark in its
political heartland of Punjab, but the nation’s dire finances
threaten the optimism.

The Pakistan Muslim League-N (PML-N) won huge popularity and a
reputation for getting things done with a series of big-ticket schemes
over the past five years in Punjab, the country’s richest, most
populous province.

A metro bus system in the
provincial capital

 Lahore — the first
such scheme in the country’s 65-year history — free laptops and
solar energy panels for students and a network of high-quality schools
in poor rural areas made Punjab the envy of Pakistan.

In the campaign for the May 11 general election, PML-N leader and
now Prime Minister
Nawaz Sharif

 and his younger brother, Punjab Chief
Minister Shahbaz Sharif, promised similar schemes for the whole country.

After five years of
listless

 government under the Pakistan
People’s Party (
PPP

), voters responded to the promise of action and
handed the party a majority.

In Lahore, the Metro Bus which opened in February has
revolutionised travel around the city, a traffic-clogged
mishmash
  
n.
A collection or mixture of unrelated things; a hodgepodge.


[Middle English misse-masche, probably reduplication of mash, soft mixture; see mash.
 of
colonial-era buildings, cheap housing and newer, more
upmarket
  
adj.
Appealing to or designed for high-income consumers; upscale:  
 suburbs.

The 27-station network of buses running on dedicated lanes and
elevated roadways, run by a Turkish company and carrying 120,000
passengers a day, was built at a cost of 30 billion rupees ($300
million).

Terminals offer a computerised fare system and commuters can use
smart cards to avoid the hassle of queueing — a welcome use of
technology in a bureaucratic land where paperwork, preferably in
triplicate, is still king.

Hira Farhat, a pharmacy student at the University of Punjab, was
delighted with the service.

“It’s comfortable and quicker than other
means of
transport

. It has cooling system and takes me to my university in 15
minutes. The government must start it in other cities also,” she
said.

The PML-N has promised to take the metro bus to Karachi, the
largest city and economic heart of Pakistan, and the capital Islamabad.

Nawaz’s first speech in his third term as PM last week was
strong on talk of investment in infrastructure, particularly a road and
rail network to link northern neighbour China to the southwestern port
of Gwadar, recently taken over by Beijing.

“All development projects will be completed before the
completion of our five-years term so that people can get the
fruits,” said Sharif.

But populist projects do not come cheap and Pakistan is in a dire
financial predicament, with a fiscal deficit in 2012 of 8.5 percent of

GDP
 (guanosine diphosphate): see guanine.
 and growth in 2013 forecast at 3.5 percent — half what economists
say is needed to absorb the growing young population into the workforce.

More pressingly,
foreign exchange reserves

 are dwindling, to just
$6.6 billion in late May, or less than two months’ export cover,
down from $11.3 billion a year earlier.

The opposition in Punjab said the PML-N’s flagship projects
were marred by corruption and ran hugely overbudget, leaving other
cities and districts under-resourced.

“The Punjab government crossed the initial estimates for Metro
Bus and spent 70 billion rupees instead of 30 billion rupees,”
claimed Raja Riaz, former PPP opposition leader in Punjab.

“They cut the development funds of other cities for this one
project and also diverted the finances of much more important
departments like education and health.”

Islamabad is due to repay the International Monetary Fund more than
$4 billion by the end of 2014, putting further pressure on currency
reserves, and many observers expect Pakistan to have to ask for another
loan.

That would come with a host of tough conditions, including boosting
Pakistan’s wretched tax collection, which currently brings in less
than 10 percent of GDP.

Sharif has said he would welcome help from the likes of Turkey and
China as he seeks to boost the economy, but analysts are warning the
PML-N’s projects could create extra burdens.

“These are good projects but at the same time the government
should also be in the business of mobilising resources,” said
Ashfaq Hassan Khan, principal of the National University of Science and
Technology Business School.

“If resources are not mobilised and yet we go for financing
all these kinds of projects nationally, it will lead to a larger budget
deficit and accumulation of more debt.”

Economist Kaiser Bengali agreed, saying there was scope to improve
existing infrastructure at much lower cost than beginning new schemes.

“For example, we have already a network of circular railway in
Karachi and government can use it for better transportation of commuters
instead of working on a new project,” he said.

“But our rulers go for new fancy projects and they want to
spend money on new schemes.”

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