AS a nation, we are known for our excessive consumptive nature. This argument is substantiated by World Bank’s statistics on Pakistan’s gross domestic savings (GDS) as a percentage of our national gross domestic product (GDP).
For the year 2020, Pakistan’s GDS was just 8.4 per cent. If this figure is compared with the GDS of other regional economies, like India (28.3pc), Iran (38.7pc), Bangladesh (25.1pc), Indonesia (31.7pc) and Malaysia (26.1pc), Pakistan finds itself way down the list.
In simple words, GDS of 8.4pc means that out of Rs100 earned by all the households collectively, we consume Rs91.6, and only Rs8.4 is left as savings. This obsession with consumption is evident in society, like lavish dowry, fashion garments, imported tiles, indoor decoration, imported feed for pets, and, indeed, automobiles.
In recent history, auto-financing by banks has created a flood of cars on our limited road infrastructure. Lease financing has already caused imbalance in the supply-demand mechanism related to natural gas resources. When CNG was introduced as an alternative fuel for vehicles in 2004-05, we all were happy to have an inexpensive fuel which also gave more mileage.
But, gradually, the CNG consumption by automobile sector rose to such levels that the supply of gas to our stoves got deficient. To solve the issue, the policymakers decided to allocate different time slots for supplies to CNG stations and households.
Resultantly, the consumers witnessed long queues on the roads, and the women felt the brunt in their kitchens. Today, those CNG stations give a deserted look. In fact, they have been shut closed these days.
Gas is a natural resource, and it cannot be exploited beyond a certain limit. This is a basic concept in economics. Therefore, humans must adjust their demand patterns according to the availability of a natural resource.
Our road infrastructure is getting congested day by day due to the unmanaged supply of vehicles fuelled by the auto-financiers. Every month economic observers report the increasing number of sale units as a measure of their success. My question is: do we have sufficient road space to match with this unchecked supply of vehicles?
All options for creating new road space have a limit, both financially and geographically. The question is: to what extent can we go on with building multistory, overhead bridges, underpasses, ring roads, etc. just to meet our obsession with automobiles?
We all witness daily that more than 70pc of vehicles carry just one passenger; the driver. Think of a possibility where 70 office-goers are placed in just one single public van. Excessive supply of automobiles creates many problems in our daily life, like road accidents, poor road maintenance, deaths en route to hospitals due to traffic congestion, wastage of time due to non-productive driving, air pollution, heavy import bill of petrol, and many more.
Do we not need to reduce the pace of auto-financing? Do we not need more public transport on our busy roads? These are critical questions. I believe we need to change our mindset and prioritise our spending towards human development.
S.K. Abbas
Islamabad
Published in Dawn, January 30th, 2022
