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Dr Ghulam Mohey-ud-din, PhD

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Punjab Spatial Strategy 2047: A Roadmap for Structural Transformation, Integrated Spatial Planning and Sustainable Development

Why Punjab Need Spatial Strategy?

Punjab has been a region endowed with abundant natural resources of land, water and demography for centuries and remained the backbone of numerous empires and dynasties, even since the Indus Valley civilization. However, the absence of a spatial perspective in the planning framework has led to ad-hoc decision-making in the past. For instance, the Industrial Estates were set up on the sites lacking in connectivity and necessary utility infrastructure.

Investments in social services were not prioritized in the backward districts of Punjab, exacerbating regional inequalities and imbalanced social development across the province. For this reason, the Government of Punjab has come up with the Punjab Spatial Strategy (PSS), a strategy that analyses Punjab’s prospective development through a spatial lens. The Urban Unit, on behalf of the Planning & Development Board – Government of Punjab, has devised the Punjab Spatial Strategy which has been approved the Provincial Cabinet and applauded by the Prime Minister of Pakistan and the Chief Minister of Punjab.

Punjab Spatial Strategy – An Introduction

The Punjab Spatial Strategy is a crucial component and a critical DLI (Disbursement Linked Indicator) of the Jobs and Competitiveness (J&C) programme of the World Bank having a primary goal of generating employment for its growing population. PSS is envisioned to achieve integrated, organized and sustainable economic development of the province to achieve the aims of the J&C.

Punjab Spatial Strategy is not only a Spatial Economic Development Framework of Punjab for the next 30 years but also a Business Plan of the province. It addresses the wide range of the issues ranging from industrialization, agriculture diversification, urbanization, land-use, spatial planning, a system of cities, connectivity and transport, environment, and inclusive social development.

Strategic Objectives of Punjab Spatial Strategy
Strategic Objectives of Punjab Spatial Strategy

PSS – New Development Paradigm for Punjab

Punjab, by aligning its resources, under the spatial and regional planning framework can achieve the balanced and inclusive growth fostering their competitive advantages. For this endeavour, Punjab Spatial Strategy can be an alternate planning and development paradigm for the province. PSS assesses the potential of Punjab’s growth corridors and growth nodes, identifies the top cities with the highest growth potential, and prioritizes and coordinate investments around them. This strategy informs the public investments, which can be reflected in the MDTF and ADP.

Present Punjab’s economy, which stands around US$ 150-160 billion, has always been on the precursor in terms of economic development of the country – contributing more than 53% share in the national GDP and having slightly higher per capita income than the national average. Due to these facts, the nation’s macroeconomic position always reflects, by and large, the dynamics of the Punjab province and its progress. Even though Pakistan is at the bottom positions in most of the international development benchmarks, Punjab; however, relatively secures a better position due to its economic structure and abundance of human and physical resources.

Economy of Punjab

Punjab can change the dynamics of the country as it contributes above 53% in the national economy. Despite serving as a food basket, manufacturing and services hub for the whole country, Punjab still has minimal global linkages and export-orientation. Punjab economy’s transformation is needed to optimize its contributions and help Pakistan catch-up emerging world. Water and irrigation have been the main driving force for the development of Punjab.

However, with growing industrialization in the modern age, Punjab (and Pakistan as a result) has not been able to perform optimally primarily due to its heavy reliance on the agricultural sector with minimal levels of vertical integrations and thus failed to reap full benefits of the green revolution happened in Punjab during the decades of 50s and 60s. Punjab terrestrial economic activities are well correlated with its irrigation network – a clear juxtaposition of the development in Punjab led by the water economy.

Sector-wise labour share for 1951, 1981 and 2015 shows a gradual transition of labour employment from the predominantly agriculture-based in 1951 to the semi-industrialized in 2015. In 1951, the share of labour employed in agriculture was over 66%, and the services and industries sector combined accommodated only 33.8% of the labour force.  Share of labour in agriculture dropped to 49% by 1981.

This significant transition was mainly supported by the mechanization of agricultural practices and industrial development in major districts of Punjab. From this time forth, however, the transition has not been much impressive. Since 1981, the share of labour in agriculture has dropped only 4% and stands at 45% in 2015. The decrease in the share of labour in agriculture, albeit small, is counteracted mainly by the increase in the share of the Industrial sector. However, employment in the industrial sector is concentrated mainly in a few industrialized districts.

the absence of a spatial perspective in the planning framework has led to ad-hoc decision-making in the past. For instance, the Industrial Estates were set up on the sites lacking in connectivity and necessary utility infrastructure.

The transition of sector-wise labour share has been even more disproportional between the central and eastern districts of Punjab. Share of labour in agriculture in Lahore decreased from 55% (Population Census, 1951) in 1951 to 16% (Labour Force Survey, 2014-15) in 2015. During the same period, the share of agriculture in D.G Khan in western Punjab saw only a minute decrease from 76% (Population Census, 1951) to 66% (Labour Force Survey, 2014-15). The overall picture shows that Punjab has transformed from an overwhelmingly agriculture-based economy to a semi-industrialized economy.

As of now, the share of the industrial sector in Punjab’s GDP stands at 22% while the agricultural share of GDP has fallen to 15% (Punjab Economic Report, 2017). It is, however, essential to note that most of the industry in Punjab is agro-based. The sector-wise composition of the industry in Punjab has not changed much since the 60s and 70s. Textiles, wearing apparel and food product industries were and still are the most prominent in Punjab’s landscape, and both are predominantly agro-based industries.

Other important sectors include non-metallic minerals, fabricated metal products and machinery and equipment. These were the most significant industrial sectors in the same era. It is indicative of limited diversification and lack of integration into global value chains.

Over the past three decades, growth of the industrial sector has mainly been in the light and primary manufacturing sectors; however; these sectors are predominantly inward-focused and are not exporting. The share of high-tech industries has decreased over the last 30 years, which is due to the lack of technology integration in the industry. It has led to a low per labour productivity for the industrial sector of Punjab. Currently, the value-added per worker in the industrial sector stands at $4,350. In comparison, China has a value-added per worker of $20,000 for the industrial sector.

Punjab Spatial Strategy envisages that the cross-sectoral boundaries will dissolve, and significant reliance will be on moving up the value chain where high-end services are added with the production of goods. Global consumer markets need to have direct access to Punjab. The urban centre in Punjab will be connected and part of a global chain of action. They would be required to offer high quality living for people and reformed investment climate for businesses while caring for sustainability. A country’s global image plays a crucial role in its investment climate.

The China Pakistan Economic Corridor (CPEC) provides an opportunity to interest global investors in Pakistan – for it to culminate into sustainable economic transformation, domestic productivity must be enhanced. Thus, this is the right time to make Punjab as an engine of national economic growth. The manufacturing sector, especially, can be an entryway to Global Value Chains given that there is a global shift of labour-intensive sectors towards cheap labour markets, and Punjab has a large youth population. With the right policies, the day is not far when Punjab can rival other production hubs of the world.

Key Recommendations of PSS

PSS emphasizes on the need of developing sector-specific industrial zones based on the comparative spatial advantages. To this end, industrial corridors have been identified and proposed in the selected districts to consolidate the existing sector and enhance its capacity and efficiency.  Similarly, for the development of agricultural & livestock/dairy sector, product-specific zoning has also been proposed in the strategy.

The services sector, in addition to the manufacturing sector, is also a pivotal for economic growth as it accounts for above 60% share in the provincial GDP (Punjab Economic Report, 2017). According to a study conducted by the Urban Unit, the services sector has a higher employment concentration in Lahore than the industrial sector. Both male and female migrants to Lahore in the past ten years are mostly employed in the services sector.

Almost 65% of the migrants in Lahore have indicated the rural area of the district, as their previous residence while migrants from an urban district comprised of 35% of the entire migrant population of Lahore (Labour Force Survey, 2014-15). In corroboration with the literature, most of the migrants in Lahore are coming from districts where the significant portion of labour was employed in the agriculture sector. This influx of migrants, in turn, suggests better job opportunities in the service sector of the urban centres.

PSS envisions the culture of entrepreneurship and innovation needs to be incorporated to bring further value addition in the products and services. Adoption of modern technologies will be the critical driver in the coming two decades, and workforce needs to be prepared for that change. These new technologies will result in higher productivity, GDP growth, improved business performance, and prosperity. Increased concentration in research and development to develop a knowledge economy, consumer financial services and other merchandise services will be encouraged.

These new IT technologies will be human skill-intensive and the basis for which must be laid in the 2nd Stage of Transformation.  A connected cluster of high-performance cities that are globally connected to international markets will lay the basis for this transformation. Sustainable developments across Punjab will reap benefits in this era, where the human resource will be at an upgraded stage to capture these advantages and emerging opportunities.

Along with production sectors, the cities are also great enablers of economic growth through increased productivity, economies of scale and knowledge-based service economy. Large cities are often associated with higher incomes, given their importance in innovation and job creation. All the major economies of the world are increasingly turning towards clusters of cities operating as systems to increase the efficiency of development and reap urbanization dividends – the PSS brings all this to Punjab.

Reference:

© 2019 Dr Ghulam Mohey-ud-din. The author is an Urban Economist 
at the Urban Unit, Government of Punjab (and was the part of team worked on PSS)
(Article written in 2019 for the special newspaper edition published
on PSS launch event)
Author can be contacted through email at dr.moheyuddin@urbanunit.gov.pk

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