BARRING its formative years, generations of Pakistani policymakers have comfortably operated with one ‘given’ or constant: resource abundance. From vast tracts of fertile arable land to generous flows in its rivers, from reservoirs of natural gas to an enterprising and hardworking population, nature has been bountiful in its resource endowments to Pakistan.Despite such abundance, Pakistan has utilised its resources poorly. From a combination of one the world’s largest rivers (Indus, with an annual flow twice that of the Nile), and the biggest contiguous irrigation network in the world, instead of producing large exportable surpluses, the country runs up an ever-rising food import bill that is currently around $5 billion.Against a world average of over 50pc (India: 40 pc), Pakistan stores only 8pc of the water flowing in its rivers — allowing 92pc, or a mammoth 130 million acre feet (MAF), to flow into the sea each year. Similarly, against a hydel potential estimated at well over 40,000 MW, Pakistan produces a fraction, at 6,700 MW from its water resources.From its fertile soil, the country produces a variety of crops. However, in each case, the crop yields in Pakistan are between 20 to 40pc below world average. Hence, the average wheat production per hectare in Pakistan, at 2,787 kilogrammes (1,128 kg per acre), and the cotton yield at 769 kgs per hectare, are both substantially below the world average.Pakistan is the fourth largest cotton grower in the world. However, from each ton of cotton produced, Pakistan earns approximately $6,000, versus $34,000 by China. Bangladesh, without cotton of its own (but with preferential market access), manages over $20bn of garments exports — against around $5bn of the same from Pakistan.These are just some examples. The list of underutilisation and egregious mismanagement of resources goes on and on. In a testimony to its grossly inefficient use of factor endowments, in overall terms, Pakistan has been eking out a progressively lower rate of growth since the 1990s with deployment of a given resource envelope — from an already relatively low base.Pakistan is not unique in how it runs its resources into the ground. In many senses, it displays the same characteristics that other ‘resource-cursed’ countries, particularly in Africa, do. While resource-rich countries are generally poor and underdeveloped, their politicians and bureaucrats are invariably super-rich and plushly comfortable.According to a recent study by the McKinsey Global Institute, 69pc of people in extreme poverty are in resource-driven economies, while for 80pc of resource-rich countries, per capita income is below the world average — despite their factor endowment.Given an abundance of resources at its disposal, Pakistan could, decade after decade, arguably ‘afford’ to use them unwisely and inefficiently — in short, to waste them. However, a new reality has been slowly emerging since the 1990s — the reality of a shrinking resource envelope.A dangerous combination of a burgeoning population, natural resource depletion, the inability to tap available reserves due to inadequacy of fiscal resources, a lack of political vision and bureaucratic competence and capacity, have produced the scarcities which Pakistanis are becoming familiar with: shortages of natural gas, electricity, water, fruits and vegetables, to name a few.Hence, per capita water availability has declined by around 84pc since 1951, while energy availability has fallen 8pc since 2008. The trend in the availability of these two basic resources at least is unlikely to change — climate change is likely to affect both the availability of fresh water resources as well as arable land.The lack of emphasis on building a modern, progressive tax edifice in Pakistan that encompasses its elites means that, progressively, the country will have fewer and fewer resources to import energy while its demand will rise exponentially. The combination of an expanding population and constrained fiscal resources will also mean that increasingly, in the years ahead, Pakistan will also be facing tough trade-offs — as in importing energy versus food-grains.That this grim future should unfold is not inevitable or preordained, of course. Numerous examples can be drawn upon of countries that have been severely resource-constrained, but that have used this scarcity to their advantage — by becoming super-efficient in their use. Faced with an ‘oil shock’ following the Arab embargo in 1973, the US worked assiduously to reduce its dependence on oil — introducing measures ranging from speed limits on highways, the promotion of car pools and public transport, to the stipulation of ‘standards’ for fuel consumption in cars and mandatory energy audits in industry, among others.Israel, faced with a harsh landscape and climate, poured resources into agronomy and food security, turning the Negev desert and parts of the Jordan Valley into its bread basket. It also invested heavily in developing its human and social capital, to provide avenues for growth and exports for the country in high technology. Similarly, relative to the needs of a modern industrial economy, Japan has been resource-starved since decades. However, this has not stopped its march to industrial prowess on the global stage. Singapore is yet another resource-constrained nation beating the odds with vision and commitment.Countries that have developed even with severe resource constraints, however, have had one big advantage at their disposal — strong institutional frameworks. Out of all the developing resource challenges faced by Pakistan, the lack of strong institutions is perhaps the biggest ‘scarcity’ of all.The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad

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