*"Disconnected? Physical Capital, Social Capital and Connectivity for
Economic Growth in Pakistan"*

*A report launched by Planning Commission of Pakistan*

*Islamabad, **Wednesday, 11 January 2012**:* The Planning Commission has
been charged with developing growth policy and managing the Public Sector
Development Program (PSDP). The Framework for Economic Growth (FEG) which
has been prepared by the Planning Commission through research and
countrywide consultations has been approved by the National Economic
Council (NEC). This strategy focuses on governance, urban management,
markets, connectivity and youth and community engagement.

Planning Commission of Pakistan has launched a report "Disconnected?
Physical Capital, Social Capital and Connectivity for Economic Growth
Pakistan" to inform the process of Framework for Economic Growth Pakistan.
The report is an effort to shape the basis for an argument for government
and non-government entities to invest much more in exploring the role of
social capital in the economy.

The report highlights Pakistan has suffered from a series of political,
social and economic crises over the last several decades that encompass
virtually all facets of public life. Whether government, private sector or
civil society, public life is constantly in problem-solving mode.

Most potent and significant kinds of crises Pakistan faces (with alarming
frequency) are economic crises. Economic crises tend to manifest themselves
in a variety of ways, sometimes separately, and often jointly high
inflation, high and unsustainable current account deficits, high
unemployment, high poverty and most significantly slow and unpredictable
economic growth.

Although physical infrastructure exists in significant quantity, the
internal inefficiencies and poor governance often result in significant
losses for state-owned enterprises like Pakistan Railways (PR) and Pakistan
International Airlines (PIA). In addition to inefficiencies within these
major industries, poor planning and rigid approval processes of development
projects have led to the underutilization of public investment

This report explores connectivity as a platform for economic development;
the role it plays in economic growth; and its contribution to Pakistan's
FEG. Connectivity supports trade, commerce and interactivity (via the
exchange of information, ideas, methods and processes, goods and services,
and transfer of funds), enhances productivity and economic growth.
Connectivity may be viewed as a network of connections which could either
be physical or social in nature. Physical connectivity facilitates movement
of people, flow of information, goods and services and facilitates social
and human resource connectivity.

On the other hand, social connectivity and building social capital have
thus far not been considered as part of Pakistan's development plans to
improve the quality of life. For example, investments in libraries,
community centres, and recreation and athletic facilities, which facilitate
the growth and development of social capital, were never a priority.
Inefficient domestic transport systems combined with unfriendly zoning
policies that restrict the use of dense cities reduce interactivity

Connectivity needs to be seen within a broader context, which moves beyond
the conventional roads, railroad networks, trucking, airlines, computer
networks, cell phones, fiber optic cables etc. to how networks enhance
interactivity, with the efficient use of physical, human and social capital
– and how these resources intertwine to produce desired outputs.

The simplest way to conceptualize the value of connectivity to economic
growth is through the framework of what are traditionally seen as
transaction costs. The easier it is for people to interact with each other,
the more likely it is that they will do business together. This simplified
model does not capture the vastness of the challenges to a modern economy,
much less a transition economy like Pakistan's.

Pakistan's Framework for Economic Growth Pakistan will attempt to be bold,
innovative and holistic about the future of the twenty first century
Pakistani economy. The anticipated emphasis of the new strategy is on
cities and urban spaces, on entrepreneurship and job creation, and on
youth. Implementing the growth strategy will require serious efforts and
sustained reform; a task needing an approach of learning and creativity.

Complete text of the report is available at Planning Commission's Official
website on http://www.pc.gov.pk/

(Advocacy & Outreach)
Planning Commission of Pakistan
Room # 322, P- Block
Pak Secretariat
Islamabad, Pakistan
Landline: 92 51 9215536
Cell: 92 333 5116666
twitter :@ighaznavi
LinkedIn : Imran Ghaznavi
Imran Ghaznavi

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