Sunday, 9 April 2017

How do consultants, donors and Pakistani ministries solve problems?

The flood of 2010 showed me (I was Deputy Chairman of Planning then) how dysfunctional policy was in Pakistan and yet how good our administration was at handling crises.
When the flood struck, our foreign office did not consult the key economic ministries but only with a few donors to make tall claims in the international arena. Speeches were made in the UN that we had suffered a loss north of $40 billion. Immediately, the Friends of Pakistan (FOP) forum was activated. At the Planning Commission, there was no such estimate and our people told me the loss was much lower.
Upon checking I found that the FOP was a figment of our imagination. The group had met when the Zardari government came in and there was a sympathy for the new democracy and the memory of BB was fresh. Since then the pledges never materialised and the group did not want to operate outside the multilateral framework. Upon talking to both the Foreign ministry and foreign secretary, I leant that FOP was their economic baby and they were not ready to share it or even take our input on it.
So, 40 billion dollars (about 20% of GDP) was the loss announced in the international arena. Unhappy and self-righteous donors charged into the Planning Commission (PC). There were so many of them in meetings then that the PC staff could not even find a place to sit. That is also an outcome of the fact that we continue to use buildings built in Ayub’s time. No office upgradation takes place. I guess we must wait till all of Pakistan is paved for cars. It is also evidence of how our hunger for aid has empowered donors beyond reason.
Any way these donor meetings were reminiscent of Monty Python. They were emotional and sad about the disaster pretending greater empathy than the local people. Their wanted the foreign office announced estimate of $ 40 billion damage to be true so that the demand for their services would increase further. Our administration closer to the situation was giving us feedback that the loss figures were not as large.
World Bank and ADB proposed that they do an independent evaluation and we jumped at it. We also wanted a better estimate to clarify the hype. A huge team as assembles by these agencies–some 50 people including consultants initiated work on damage assessment, but few left Islamabad. There were questionnaires and forms which our administration filled out. After all, the people in remote areas where relief and rescue was taking place were Pakistan officials including the army.
Any way a couple of months later donors had an estimate of the damage. The loss was nowhere near the $40 billion dollar that the Foreign office had put out. The direct loss (property, life infrastructure) was not even $5 billion, more like $3 billion. Looking rather sheepish they presented their report and put in a loss of crop of $5 billion to show a round figure of $10 billion. It is another matter that we had a robust agricultural output growth that year as the flood helped enrich the soil.
Now of course the donor knew better and they felt more for the poor than the policymaker in Pakistan. Their proposals were well-meaning (so don’t laugh)
  • Build back better was the slogan they coined. Let us design and build model villages with nice concrete houses, motor-able roads and all manner of social and civil amenities such as parks and schools. Of course, they were prepared to give Pakistan loans to do this. Should we do this? The villages we are talking about are in the flood plain and the designs were for towns rather than the villages that were affected. Bizarre!
  • Flood-proof houses: They wanted flood- and earthquake-proof houses. What are these? Build 10-foot concrete platforms so poor villagers would put their mud huts on them. And of course, they would carry their animals and their kith and kin up the 10-foot platform every day because some consultant thought up this great idea. And when the floods came again they would wait on their platform for boats to rescue them. Bizarrer still!
  • Land in alternative locations: Then there was the proposal give them alternative land so that they stop living in the flood plain. So, if we do that would this not set up an incentive for more and more people to park themselves in a flood plain so that next time they can get land somewhere else? Perhaps the people who got this land would sell that land and come back to the flood plain hoping to collect once again when another flood hits? Even more bizarre.
When we said that none of this makes sense, we will give them cash compensation with advice to move out of the flood plain and possibly to a city, donors reacted by saying your cities are a mess with limited infrastructure. Do you want your cities to become slums?
My answer was we need slums. Our cities are too manicured for the rich and their cars. Let the cars of the rich be little discomforted. Let the donor-consultant houses in F6 and F7 overlook slums so they too see how the poor live.
I pointed out that it was in the slums of London that the Pakistani immigrants produced several millionaires and numerous middle class successes. After the civil war in the US, freed slaves converged to cities like Chicago and New York and lived in slums for decades. It was in the ghettoes that they developed musicians, writers, famous sportsmen, business leaders and political leaders.
Slums ferment with activity including crime but most of all they provide opportunity to all. In time slums are cleaned out. The East End of London, Bronx, Harlem, North East DC are all areas that are now cleaned out and gentrified. They may be very necessary to eradicate poverty and there is no reason to try to zone them out.
Sadly, while our administration and army did manage to save lives and handle the flood well, policymakers were busy grandstanding and unable to coordinate among ministries. Nor were we able to handle a huge and growing donor sector – that now thinks that it is ruling the country while taking no responsibility.

Monday, 6 March 2017

Climate Change

We take up this important subject with Adil Najam Who you have met before. Adil is the Dean of Pardee School in Boston University.  
Fascinating discussion. 
Adil framed the debate very well examining technical and economic issues. He also discussed why the dialog has turned antagonistic and political.
Yet the fact is climate change is real. 
We discussed solutions to the problem most of which are at the global level.
However, all countries must however respond to the challenges presented by climate change. And those responses may not be simple but will require a lot of thought as well as research. 
So, do listen and learn. Lots of ideas. 

Tuesday, 28 February 2017

Why not Khokhas Everywhere?

Street-vending through kiosks (khokhas or dhabas) or mobile vendors (chabri wallahs, truck, bicycles or motor cycles) are all legitimate activities which allow the poor opportunities. All societies through history have had these activities.  An unemployed person can with a small amount of money buy some fruit and serve it on a small platform or a cart.
Used to be a time we would see these vendors all over Pakistani cities selling all manner of things. There was guy selling the most awesome wire puzzles that I wish had kept. There used to be the guy in bicycle who used to be only supplier of used Marvel comics and science fiction books.
As teenagers, we used to walk or bike to local khokhas to learn how pick up all manner of goods as they were conveniently located and often cheaper than bigger stores. They were also willing to do things like give you one cigarette from a pack or one biscuit from a pack as opposed to buying a whole packet.
Then somewhere in the 80s when we seriously adopted the suburban DHA model, all roads were widened to make way for the cars. Many of my favorite khokhas were taken away. I wondered where the owners had gone till one day I found one of the vendors in dire straits forced to beg. 
Later our pristine suburban neighborhoods got very exclusive and the mobile vendor who used to visit us earlier were now diligently stopped by the police as well as private security. Various forms of hawkers (the guy with the churun (a spicy paste or powder), or the vendor carrying the rubbery candy with which he made bicycles or figures, or the kulfi wallah) disappeared. I wonder where they are begging now?
Meanwhile bureaucrats who ran cities became increasingly wedded to the American Suburban model with endless single family homes and broad avenues for cars. Of course, they kept prime areas for their government owned housing and government-subsidized leisure clubs as well as plots for themselves. The poor did not fit into this scheme. The masters of the city with their perks and plots therefore got even more strict with the street vendors. Police were told to vigorously eradicate all forms of poverty—poor housing and street vendors—from the line of sight of speeding cars.
Occasionally a street vendor shows up on a side street but in a matter of hours you will find some policemen throwing him out. YouTube even has videos of policemen in Karachi upsetting carts of street vendors destroying their inventory. DHA the pinnacle of good estate management will not allow any street vendors.
Meanwhile we in policy circles began to measure poverty and continually talk of poverty eradication. Donors forced us to initiate many poverty alleviation projects. We have BISP where we are giving them conditional and unconditional cash transfers. We have skill development agencies in every province and at the federal level and we also have funds to foster skill development.  We also have several large microcredit-providing agencies and several banks that these agencies finance.  
So, what is it that people do with the few thousand rupees that these programs give them? There are no studies on this question. Mostly people ad lib, “they start their own business.” And most frequently, the business is thought to be a sewing machine. One wonders how many sewing machine businesses can the poor run?
So, the next question is “where can they set up this business?” Here the consultants have no answer. Weakly they say “at home?” But poor homes are so small and their families large. Do they have space to operate? Besides, their clientele would be the neighborhood? Or will the spend time peddling their wares? And how, when no such activity is allowed? 
I have personally pushed for the liberalization of street vending business for the last 15 years. I have presented this proposal to prime ministers and the chief ministers. They liked the idea until the bureaucrats shot it down. “Why?” you would ask. I can think of no reason other than power and hubris. 
Unlike Pakistan the rest of the world has a huge number of street vendors in their cities. Scanning some recent research on the subject I found these estimates of the number of street vendors in some major cities in the world. 
City
Street Vendors
Manhattan
50,000
Mexico City
185,000
Seoul
800,000
Manila
50,000
Kuala Lampur
47,000
Bangkok
100,000
Dhaka
100,000
Street vending is a legitimate entrepreneurial activity for the poor. It also adds to city life as many of us have felt when we go to Manhattan, London, Singapore or Bangkok. It adds vitality to and vibrancy to the community promoting mingling opportunities among the most diverse segments of the society. It also extends the range of goods available and promotes price competition which serves the community with both more goods and services and at lower prices. It also promotes street safety as it puts more ‘eyes on the street’
Many well-known entrepreneurs took their first steps as street vendors to grow large businesses. Vienna Beef is a large company that makes hot dogs, sausages and other food items started out as a street vending company. A heartwarming story from India is making the rounds about a blind man, Bavesh Bhatia who has developed a multi-million dollar business starting off as a street vendor.
Is it not time that we allowed street vendors everywhere in our cities. Every street and street corner should be allowed to have a street vendor. Cars must be made to give space to the poor. And there is no reason to associate street vending with poor sanitation and aesthetics. A careful and good policy can be developed to develop street vending cleanly and aesthetically. We can work out a good policy for street vending.
I find it strange that there are street vendors within a stone’s throw of the White house, the Congress and Washington DC landmarks and none on Constitution Avenue Islamabad. If hawkers hang out near Buckingham Palace and the Parliament, why can’t there be khokhas next to the Governor’s house, Gymkhana, Punjab Club and the Corps Commander house in Lahore. 

So, let us not give the poor mere handouts without the space to grow. Street vending is a legitimate right of the poor to claim their share of entrepreneurship. Accept it and allow them to grow.

Friday, 17 February 2017

Mobility for all

Pakistan is obsessed with cars and big lovely roads for these cars. For decades, the biggest item in the PSDP has been roads. We have built many highways. Most big cities in Pakistan are connected by a highway. Checking on Google maps I found that travel time between cities in Pakistan is almost the same as similar distances in the US. People with cars are very happy and love to talk about how fast they travel between cities.  It is easier now to spend your time in metropolitan centers playing golf and occasionally visit your farm to collect your rents.

The presumed benefit of all this connectivity to GDP growth and welfare continues to elude the economy. Pakistan continues to grow between 3 and 5 percent far less than the 8+ percent required by our demographic trends. Yet the policymaker seems to think that roads will lead to economic growth.
Within cities especially the favorites there is a continued effort to reduce the travel time for cars. Roads are continuously widened, flyovers and underpasses added and signal-free corridors added to facilitate fast cars. Once again the rich are happy but there has been no visible productivity improvement such as increased output, more commercial and entrepreneurial activity. Inadequate GDP growth reveals that this investment too is not paying off. 

I remember senior policymakers were surprised after all this flyover-building and road-widening for cars, that poor were driven out of the city mobility.  Horse drawn carts, bicycles, pedestrians were left with no room. The extensive car infrastructure is anti-poor. Bear in mind in a city like Lahore with a population of over 10 million there are about 300,000 cars.

Now our leaders have woken up to building public transport. Who can disagree with that? We are building huge lines across Lahore, Islamabad, Karachi, Multan and I suppose more will come.
Roughly speaking in Lahore, we have spent 2.5 billion on 2 lines.  Three more are proposed. Extrapolating from the existing costs, these will cost another 3 billion. The reason for the high cost is that the metro had to be elevated to preserve roads for cars. There is also an operating annual subsidy which will grow over time.

So, we are subsidizing cars with wide roads and flyovers, and subsidizing those that are lucky enough to live by metros. We are told there are 170,000 people using it daily the Green line that is operating now. Extrapolating again, we can assume that there may be about 1.5 million people when this metros system is completed.

This whimsical policy will at best cater to less than 15% of Lahore’s population by the time it is completed (assuming trend growth in population). 

Is there a better alternative? Indeed, there is. Let us talk about it. 

Enrique Penelosa the famous mayor of Bogota came to Pakistan and talked about it. But did anyone listen? Unfortunately, not! Such occasions turn into events for protocol and key people miss the message. 

Penelosa famously pointed out that cities need to balance the right to mobility with the right to city public space. Prioritizing cars and giving them the wide roads while building metros on platforms to provide more space to cars at a cost of 5 billion USD has many implications:
  1. cars have most of the city mobility space;
  2. most city funding even that for building the elevated metro has been used for preserving the status and speed of cars;
  3. all this expenditure for cars means there is little money for other important activities such as health care, education and community development. 

Penelosa points to mobility as a right for all and for a city to provide some equity in mobility. It is well known that the mobility for the poor is mostly walking and bicycling. Even in our cities, studies show that the poor mainly walk or cycle. Yet our whimsical policies favoring cars has seen to it that there is no space for the poor. 

To make it convenient for cars, the metro is elevated and there is no pedestrian or bicycle access to the metro. Poor pedestrians must dodge cars and then climb 3 floors to catch the metro.

What is needed is a change of focus from cars to mobility for all.  One car takes the space of about 100 pedestrians when you consider the space that must be kept free in front back. In that space 15-20 bicycles can be operated. A bus with a about 80-100 passengers takes about the space of 3 cars.  
  
Why then should cars be subsidized and not priced? Most big cities smaller than Lahore and Karachi are pricing the use of the car to discourage car travel and encourage other forms of travel. Not only does this meet the Penelosa principle of equity in mobility it also saves city resources for the many other more important uses.

How should cars be priced?
  •            Congestion charges to enter and operate in a city center-- the denser more commercial parts of the city.
  •        In dedicated lanes, they can go faster but at a price. They can even be charged for every mile they use dedicated fast lane.
  •        Meaningful metered parking charges for use of appropriately designated parking spaces.

Technology allows such charges to be collected very cheaply through mobile phones. Such charges allow car users to rationally consider the use of their cars and planning trips to minimize cost to them.
Charging cars in this manner frees up road space which can then be used to
  •        Develop paths for pedestrians and cyclists.
  •        Provide more dedicated bus routes without building elevated tracks.
  •             Provide space for street commerce with kiosks for poor entrepreneurship.

 t   With this little tweak in policy we could have better cities and provide cheaper more people-friendly metros buses. People would also be provided people with more choices of transport such as walking and bicycling. We could also do away with the elevated tracks and flyovers that increasingly are viewed as ugly and expensive city dividers.


It has the added advantage of saving large sums that are now being spent on roads and elevated metros while also giving the city an additional source of revenue (tolls and congestion charges) with which to provide better city services.