Category: Blog

Last year’s Nobel prize winner in economics, Paul Romer, a growth economist, has lately focused on the potential of cities for generating economic growth and prosperity. He considers new cities startups and laboratories for urban policy experimentation. New cities offer a great potential to develop new rules of governance and economic activity that may be difficult to implement in existing cities. The city of Gwadar presents the same opportunity to Pakistan even though it is not being built from scratch.

In the wake of CPEC, there has been renewed interest in the future of Gwadar as a new economic and port city. The city’s port provides the shortest route to connect Western China and Central Asia with the gulf and African regions. The Gwadar Port Authority (GPA) has already signed a 40-year built, operate and transfer (BoT) agreement with the China Overseas Port Holding Company Pakistan (Pvt.) Limited (COPHCL). A Free Port Zone is also being established and will be operated by the holding company on 2300 acres of land. There are further reports that Saudi Arabia will also be setting up an oil refinery in the city, which may boost potential industrial and trading activities at the port.

Some are already considering Gwadar as a new Shenzhen – a major port city in China and a gateway to the Pearl River Delta and Hong Kong. However, cities and ports reinforce each other and the rise of Shenzhen cannot be attributed to port operations alone. China deliberately devised conducive investment policies and relatively inclusive governance structures – not available to most other cities in mainland China – to attract and retain businesses. These steps by the Chinese government, turned Shenzhen into competitive destination for foreign direct investment and made it one of the most rapidly growing cities in the world both in terms of population and economic size. Later China extended the ‘Shenzhen model’ to other ‘new’ economic cities.

A recent study on Gwadar funded by the International Growth Center (IGC) however finds that there has not been much progress in the city in terms of introducing innovative governance, socio-economic development of the local population and preservation of the diverse heritage of the old town. The city has the potential to become an important hub for CPEC under China’s Belt and Road Initiative and thus there remains an urgent need to address these gaps.

Pakistan, so far, has been unable to utilize the benefits of rapid urbanization due to its colonial forms of city governance. Gwadar is governed by multiple government agencies at the federal, provincial and local levels. Lack of coordination amongst these agencies is challenging the city’s development. Gwadar still lacks access to safe drinking water, a smooth supply of electricity, proper health facilities, and other municipal amenities. Governance structure of the Gwadar Development Authority (GDA) needs to be streamlined with other functions related to city management to be consolidated under one organization. Moreover, there is a need to include the local population in governance of the city to ensure inclusion and legitimacy. In cities like Shenzhen, most of the governance functions are decentralized to local urban managers even though the central government plays a major role in developing the necessary infrastructure and policy framework.

Globally cities introduce unique incentive structures based on the industries to be pulled in. But in the case of Gwadar, diverse structures are emerging due to multiple agencies involved in the process. Several investment and business regimes – such as the Free Port Zone, Special Economic Zone, Oil City, Export Processing Zone and provincial government’s industrial estate – are complicating decision-making for investors. A local investment promotion bureau can be established to devise, promote and monitor a uniform policy framework across Gwadar.

Gwadar city’s first master plan was developed by a Pakistani engineering consulting firm but has been criticized on several grounds. The local population, for example, would be relocated under this plan which could be detrimental for the city as it would lose the buy-in of the local population. This could also dampen Gwadar’s rich culture shaped by diverse influences for centuries, due to influx of Portuguese, Africans, Omanis and British till the twentieth century. The new master plan being developed by a Chinese firm is expected to focus on the preservation of local culture and integration of local population into the renewed economy under CPEC. Land speculation should also be curtained as it dissuades serious businesses and industrialists that should be offered land at affordable prices.

A drought-like situation in Gwadar since the last couple of years has led to the local population suffering from severe water shortage, health problems, and reduced fishing and livestock businesses. Progress on to address these problems is mixed. The Pakistan Army is running a hospital to provide healthcare to the local population for the first time in Gwadar and is supporting installation of a desalination plant for drinking water. However, efforts to promote education (including technical and vocational skills), increase access to electricity, and provision of support to local small businesses remains weak.

The development and implementation of a unique and inclusive governance structure for Gwadar will help attracting investment and talent and stimulate socio-economic development of the local population. The experience of Gwadar can be replicated to both new industrial cities planned in and the existing rapidly expanding cities of Pakistan.

 

Muhammad Naveed Iftikhar is an International Growth Center (IGC) Researcher  and public policy advisor and research fellow having interest in public-sector governance, cities, and entrepreneurship. He tweets @navift.

Dr. Liou Xie is an Associate Professor of Geography/Environmental Studies at the State University of New York at Plattsburg. Her research focuses on urbanization and the environment in China, the U.S. and other parts of the world. She can be reached at liou.xie@plattsburgh.edu

Agriculture provides employment to a large population of Gilgit-Baltistan (GB). This is despite the limited amount of irrigated arable land available. Only around 1.2 percent of the total land area in GB is cultivated (Table 1). With the completion of the Karakoram Highway (KKH) in 1978, the improved connectivity with a larger domestic market as well as with China has induced a rapid transition in agriculture from staple crops to cash crops and higher value fruits. Given the agro-climatic advantages of the area, this means that GB can produce country’s winter crops during the summers and sell them as “off-season” products at a premium. However, this would require further investments in expansion of limited cultivable area as well as improved productivity and enhanced market connectivity.[1]

Table 1: Land Use in Gilgit-Baltistan (in hectors)
Type of Land	Area (000 hectares)	Percentage
Mountains/ Lakes/ Rivers/ Glaciers	4810	66
Forest: 1) Protected = 65 which is 1 percent 2) Private = 219 which is 3 percent 3) Social Agro/ Farm = 362 which is 5 percent Total Forest = 646 which is 9 percent	646	9
Rangeland	1646	23
Cultivated Area	58	1
Cultivable Area	90	1
Total	7250	100

Source: Agha Khan Rural Support Programme, 2017

Over time, most crop and fruit yields in GB have suffered from low productivity. This includes crops, such as wheat, maize and barley; and fruits, such as cherry, pear, walnut, grapes and mulberry. However, some crop and fruit statistics have shown encouraging signs. Potato – the largest cash crop in the region – registered a 91 percent increase in production over 2001 levels in 2001-06 period. Production of apricots and apples – two major fruit crops with high market potential – rose by 6 percent and 15 percent in the period 2001-06. Please see figures 1 and 2 below.[2]

Figure 1: Major Crop Yields

Source: The Government of Gilgit-Baltistan et al., 2011

 

Figure 2: Major Fruit Yields

Source: The Government of Gilgit-Baltistan et al., 2011

Agriculture in GB experiences high losses at production and post-harvest stages. The waste rate is particularly acute in vegetables and fruits. In vegetables, significant losses are recorded in potatoes and tomatoes. Among the major fruits, mulberry and apricot record 66 percent and 41 percent losses, respectively. However, the noticeable exceptions are the less perishable fruits, including almond and walnut at 3 percent and 2 percent, respectively. The extent of processing and value addition in the sector is limited, which partly explains the high waste rate for perishable produce. Nearly all vegetables and fruits are sold fresh with some exceptions, such as apricots, where some processing takes place in the form of drying and kernel-oil extraction; while in the case of apples and cherries, a limited number of local marketing associations add value by grading, packaging and labeling. Honey-bee keeping is another activity in which some value is added by bottling and labeling.[3]

Summary of key challenges faced by GB’s agriculture sector

• Little cultivable land
• Limited technology access for processing and value addition
• Long distances from markets coupled with weak transport network and storage infrastructure
• Tariff and non-tariff barriers on exports to China

The issue of little cultivable land, which leaves holdings fragmented and limits the scope for scale in production, can be dealt by making additional land arable through water- and land-development[4]. Government and civil society can assist in this regard.

GB enjoys centuries-old tradition of chemical-free agriculture. Use of clean glacier water and non-use of insecticides, pesticides and herbicides has given the region a niche in natural and organic farming. This has opened a window of opportunity for local farmers to cater to health-savvy customers in domestic and international markets. However, limited access to technology for processing and value addition prohibits the local farmers from fully availing this opportunity. For example, a pioneer organic set-up in Karimabad, Hunza since 1986 by the name of Hunza Fruit Processing is producing a range of processed fruit products, including jams, squashes, juices, dry fruits and energy bars. Such products are in high demand and would fetch premium prices in down-country markets, such as Islamabad, Lahore and Karachi. However, without access to technology for vacuum packing, given organic products have a shorter shelf life, the business is not able to take its products outside GB. Additionally, organic businesses in Karimabad often quote lack of marketing training as an obstacle in competing against down-country products with superior branding.

Perishable produce means that it has to reach end markets quickly, especially given inadequate local cold storage facilities. Long distances from down-country markets and absence of specialised transport, such as refrigerated trucks, makes this even harder[5]. The KKH route is difficult and unpredictable, Babusar Pass route stays closed due to heavy snow fall for six months in a year and flights are infrequent and expensive. As a result, most fruits and vegetables are either sold locally at lower prices or are wasted. A local entrepreneur in Karimabad suggests that a short-term solution to this problem could be to utilise local courier services – with their existing network in the area – for transport of perishable produce. Although, a long-term solution would be to improve the overall infrastructure, including storage and transport.

Local businesses complain about unfair treatment by China. While competitive Chinese products have displaced local products, GB is not able to access Chinese markets, despite its proximity with China, due to restrictions posed by tariff and non-tariff barriers[6]. GB produces an estimated 4,000 tonnes of cherries and 20,000 tonnes of apples annually. Given increasing Chinese fruit imports, China is a potential market for GB. Thus, negotiating mutually beneficial fruit trade agreements with China under the China-Pakistan Economic Corridor (CPEC) could boost GB’s fruit industry, and create local jobs.[7]

Summary of key opportunities for GB’s agriculture sector

•  Making additional land arable through water- and land-development
•  Providing access to technology for processing and value addition
•  Improving overall infrastructure, including storage and transport
•  Negotiating mutually beneficial fruit trade agreements with China under CPEC

 

[1] The Government of Gilgit-Baltistan, Asian Development Bank, The World Bank, 2011

[2] The Government of Gilgit-Baltistan et al., 2011

[3] The Government of Gilgit-Baltistan et al., 2011

[4] The Government of Gilgit-Baltistan et al., 2011

[5] The Government of Gilgit-Baltistan et al., 2011

[6] The Government of Gilgit-Baltistan et al., 2011

[7] Agha Khan Rural Support Programme, 2017s

 

Usman Naeem is the Country Economist at the International Growth Center (IGC).

This is the first of a blog series discussing findings from the Punjab Education Sector Programme (PESP) II evaluation, an ongoing performance evaluation funded by the UK’s Department for International Development (DFID). In the first interim phase, survey and administrative datasets were reviewed to understand changes in Punjab’s education landscape since 2012.

In the five-year period between 2012 and 2017, Punjab has either begun implementation of or initiated planning for a large number of policy initiatives in education. This blog summarises some key findings from a reform mapping exercise undertaken by the team participating in the evaluation of the large Punjab Education Sector Reform Program (PESP II).

In comparison to other provinces, Punjab appears the most active in many ways. The province has the largest aid programs, the largest scale of new partnership programs, the highest number of reforms, the lowest proportion of out-of-school children, and the highest proportion of children learning. For example, in 2016, Punjab reported 13.6% Out of School Children (OOSC), compared to Baluchistan 34.8%. In the same year, only 16 primary schools in Baluchistan reported receiving government grants, compared to 396 in Punjab. In learning levels, 37.9% children in Baluchistan in grade 5 could read English, compared to 56.5% in Punjab (Annual State of Education Report, ASER-Pakistan 2016).

Despite the frenetic reform activity, challenges remain. As the largest province in the country with nearly 56% of the population, the scale of the problems is also proportionately larger. For example, there are currently approximately 10 million OOSC children in Punjab between the ages of 5 to 16 (Pakistan Education Statistics 2016-17). While it is worth noting that this is a significant decline from nearly 26 million in 2012, 10 million is still a problematic number in the context of Pakistan’s education crisis. There are stark regional disparities within the province, with some districts in South Punjab emerging as the most underdeveloped regions in the country. Districts across Punjab vary significantly in the quantity and quality of education services available for their populations. For example, as of 2016, the percentage of OOSC in Rajanpur was nearly 41%, compared to 6.4% in Lahore (Annual State of Education Report – District Directory, ASER-Pakistan 2016). This highlights the role of decentralised polices at both the provincial and the district level.

Reforms in Punjab have, so far, not been grounded in a coherent policy framework

Since the 18th Amendment in 2010, Punjab has been responsible for developing financing and implementing its own education policy and an implementation plan for it. The Punjab Education Sector Plan (2012 – 2017) is the costed implementation plan, linked ostensibly to the national education policy. The Sector Plan lacks specificity, especially in setting and monitoring targets. This plan was complemented by the Punjab Education Reform Roadmap, a target-oriented mechanism for tracking progress through regular Stocktake meetings chaired by the Chief Minister of Punjab.

There have been several issues with the Roadmap: a) the targets were mostly determined in an ad hoc fashion, which inadvertently encouraged short-termism in setting and meeting them; b) the frequency and high-pressure environment of the Stocktake meetings created counterproductive incentives for district managers to ‘game’ the system to meet targets that were high-stakes but arbitrarily set; and c) the central focus of the tracking mechanism has had negative implications for the intended decentralization towards the districts.

Punjab may have a tendency to start too much too soon

One of the most significant reforms was the creation of District Education Authorities (DEAs), which were introduced in 2013. The objective of these committees was to strengthen capacity and consolidate district level governance. So far, these DEAs have not been able to develop adequate governance capacity. This is primarily because of the centralized monitoring mechanism currently in place under the Roadmap. How these committees fare under the current government will be an important test of the sustainability of the reform process.

The Non-Salary Budget (NSB) was another key reform introduced during the PESP II period. The purpose of the NSB was: a) provide funds directly to schools (rather than routing them through the district level bureaucracy); and b) provide greater fiscal autonomy to head teachers of schools. The primary issue with the NSB so far has been underspending of allocated funds. Reasons for this included teething issues with transfer mechanisms leading to delayed receipt of funds by the schools; behavioral inertia by the school management; and time lags because of understanding new rules and regulations of the NSB process. There was also considerable pressure on schools to spend which caused them to find the NSB onerous rather than helpful.

Another major reform is the reliance on Public Private Partnerships (PPP). PPPs have been a factor in education service delivery in Punjab prior to the PESP II reform period. PESP II formalized some of the modes of PPP previously being used by the government for example the Adopt-a-School Model. This was formalized in 2015 under the Public Sector Support Program (PSSP). Under PSSP, the management and operations of struggling government schools were given to private actors, with financing from the state. The government chose to not build new schools instead relying on PPP schools to improve indicators such as enrollment.

While it is possible to say that at the provincial level Punjab was able to take up the mantle of policy making with relative success, it is unclear whether the provincial center was able to pass on capacity and responsibility to the districts. This is because most reforms are still in their nascent stages (the NSB for example was only adopted by all 36 districts in 2016) and need to be given time to be evaluated properly.

While some steps have been taken towards decentralization, a tendency to centralize remains

A common thread in the reforms introduced under PESP II is that a shift towards greater decentralization has occurred in parallel to increased oversight and control at the center, creating uncertainty and tension in the overall governance structure. The monitoring mechanism of the Roadmap is the biggest example of this. The mechanism for tracking progress of reforms ultimately rests power with the Chief Minister. This is counterproductive given the focus on decentralization and in terms of empowering districts to monitor their own targets. Additionally, while top-down buy-in of political leadership sustained the momentum for reform so far, it is unclear whether this momentum can be carried forward given the change in leadership in the province.

According to the rationale behind the PESP II evaluation, a well-functioning system requires several components, and relationships between all actors to be aligned to a clearly defined objective. It also needs each of these elements to be pulling in the same direction for the fundamental goal to be achieved (World Development Report 2018). There needs to be a recalibration of the objectives of all reform programs in Punjab. Are these in line with what is required to alleviate Pakistan’s education emergency? To what extent are they effective, and what will it take for them to be more effective? Punjab needs greater coherence and accountability between all actors in the system, at the provincial and district level, and a re-alignment of reform goals to ensure that education reforms in the province are effective and successful.

The water crisis in Pakistan is both a supply and a demand side issue with various contributing factors at play. On achieving statehood in 1947, the country held 5,300 cubic meters of water per capita, which has now been reduced to 1000 cubic meters. Pakistan faces continued clashes with upper riparian India over rights to water from the Indus river. Moreover, a historic lack of political will to consider the repercussions of water scarcity has led to underinvestment in water infrastructure and sub-optimal pricing of water across all sectors. Underpricing and inadequate regulation has created a pervasive culture of irresponsible water consumption and lack of conservation. However, since the reasons for mismanagement stem from several quarters, the solution for optimal utilization of water is not straightforward.

Pakistan’s water scarcity is the result of a combination of factors, including the mismanagement of water resources and burgeoning population growth.  Currently Pakistan’s economy is one of the world’s most water-intensive economies in terms of cubic meters consumed per unit of GDP. Further, its water productivity is among the lowest, producing 0.13kg of agricultural output per cubic meter, while that of the US’s stands at 1.3kg. Low productivity compounded by spiraling population growth has meant dwindling water quantities available per person. For these reasons, the country was declared as water scarce in 2005.

To discuss this further, the Consortium for Development Policy Research (CDPR) organized a policy talk around issues of water mismanagement in Pakistan. The panel hosted the Minister for Irrigation, Punjab, Mr. Mohsin Leghari, Dr. Erum Sattar, Visiting Fellow, Harvard Law School, and Mr. Arif Nadeem, CEO, Pakistan Agriculture Coalition (PAC). The session was moderated by Mr. Ali Habib, Managing Director of an environmental consulting firm, HimaVerte.

Dams may not effectively address water scarcity

Constructing dams at upper riparian locations of the Indus river basin can be considered as a means to evenly control year round water flows going all the way down to Sindh. Mr. Leghari emphasized on the need to develop a consensus on the Kalabagh Dam. He further explained that in addition to good returns on investment, the project promises, contrary to popular belief, 88% share in the additional water storage for all provinces other than Punjab, with Sindh being the major beneficiary. Yet, despite this knowledge, politicians are unable to find a way forward.

Construction of dams, however, will not address the emergency of dwindling water resources and availability of clean drinking water unless agriculture methods are modernized. More than 90 percent of fresh water is diverted towards agriculture. Agriculture in Pakistan relies on inefficient methods that over-extract and waste water. Lack of technological advancement in agriculture is perpetuated by misaligned state incentives for uptake of technology and use of more productive seeds. Farmers find it economically viable to grow water-intensive crops such as sugar cane and rice and waste water, even though these crops do not contribute significantly to the economy.

Mr. Arif Nadeem discussed it would be more financially and environmentally sustainable to import (instead of over produce) sugar, and shift to value-added crops like sesame seeds with high economic value and comparative advantage. Such crops not only utilize less water but also generate foreign exchange.

The government should thus redirect farmers towards sustainable agricultural choices through imposition of state regulation for water conservation and correcting its pricing. Currently the water price does not reflect its scarcity. It is instead valued at the cost incurred for maintaining water infrastructure and extraction borne by the farmer in the form of electricity bills. This comes down to a paltry PKR 135 canal water charges per year and PKR 3000 to 5000 per acre watering charges for electricity.

Construction of dams may not ensure an adequate water supply unless they also address the issue of water losses incurred due to faulty construction of both reservoirs and distribution infrastructure. Distribution network losses amount to 50 to 55 million acre feet (MAF) of water every year.

Policymakers must bear these points in mind before the construction of proposed Bhasha Dam, that can potentially store up to 8.5 MAF of water begins. Mr. Leghari added that Pakistan currently stores less than 10% of the water that flows compared to a global average of 40%.

Water management as a solution to water scarcity – Lessons from the Colorado river basin

Pakistan can learn from the significantly successful water management strategies deployed in the Colorado river basin. Dr. Sattar presented the findings of her extensive research on the basin highlighting lessons for Pakistan. The Colorado basin in America is currently undergoing a two-decade drought. Despite this, the US government has managed to increase both its agriculture productivity by 25 percent and its power generation by 30 percent. The US was able to do this by building consensus amongst all relevant stakeholders for implementing effective reforms, which is something that the Indus River System Authority (IRSA) in Pakistan has not succeeded in doing thus far. Dr. Sattar further shared that Indus river basin has 10 times more water in the system than the Colorado water system and yet Pakistan’s GDP is lagging massively behind.

The broad contours of the solution comprise rationalization of water use, especially for agricultural purposes, which can happen through adequate costing of water and will prompt higher productivity per each drop of water. Crop zoning has proven crucial for conservation of water. Demand management, through mobilizing extra cubic meters of water –  and not dams – remains the cheapest per liter source of water.

Latest policy response on water mismanagement in Pakistan

A National Water Policy 2018 has been formed, which has determined the key priorities on which the newly formed water commission, run by Federal Ministers, will urgently work towards.  To this end, a coordination body has been assembled for tackling the multifarious issues pertaining to water mismanagement by bringing all stakeholders on board for political ownership. This is a similar model which was followed by the US government for the efficient utilization of water from the Colorado river basin despite the seemingly unsurmountable challenges they faced. Their institutional coordination included all political and private sector influencers in the matter from the highest to the lowest echelons relevant for contributing to the solution. That level of transparency and fervent intention is what needs to be replicated in Pakistan for sound implementation of the identified priorities.

Sharmin Arif is the Communications Associate at the Consortium for Development Policy Research.

More than one in every three children born in Pakistan today is stunted. Child stunting, measured as low height for age, is associated with numerous health, cognition and productivity risks with potential intergenerational impacts. With a stunting rate of 38 percent (Demographic & Health Survey 2018), Pakistan is still among the group of countries with the highest rates of stunting globally and the pace of decline remains slow and uneven. In Sindh, for example, things have worsened over time, with one in two children now stunted!

The policy response to this enormous health crisis has been almost entirely centered on interventions at the household level—reducing open defecation (OD), improving household behaviors like child feeding and care practices and food intake.

A recent World Bank report, which I co-authored, suggests that a major shift is this policy focus is required for significant progress on child stunting. The report begins by showing that over the past 15 years Pakistan has made enormous progress in reducing extreme poverty, with the poverty rate falling from 64 percent to just under 25 percent in 2016. This has improved dietary diversity, even among the poorest, and increased household investment in a range of assets, including toilets within the home. This has, in turn, led to a major drop in OD, from 29 percent to just 13 percent. Curative care has also expanded, with the mainstreaming of basic health units and the lady health worker program.

Why has progress on all these fronts made virtually no dent in rates of diarrhea and stunting?

In the report we argue that to reconcile these apparently anomalous facts, we need to refocus attention on why arguments for ending OD were made in the first place. The intended benefit of ending OD was to ensure the safe removal of fecal waste away from human settlements and waterways, in order to contain the bacterial contamination of water, soil and food. The role of E. coli bacteria in diarrhea prevalence has been known for a long time. Now research has also shown the far more damaging impact of environmental enteropathy (EE), a process by which fecal pathogens like E. coli can permanently damage the intestinal villi of young children making it difficult for them to absorb nutrients even during periods when there are no signs of diarrhea. EE leads to both stunting and a compromised immune system, with lifelong health challenges.

So, what does the available evidence on E. coli contamination in Pakistan tell us? While there is no systematic testing of water or soil, the Pakistan Council for Research in Water Resources (PCRWR) has been conducting water quality tests in some locations. These tests almost invariably reveal high levels of E. coli. contamination.

Water tests done as part of a long-term study in rural Punjab and Sindh that is being conducted by me and my co-authors at the World Bank, show that more than one-third of the water samples drawn directly from hand and motorized pumps, as well as from piped water supply systems, in rural Punjab were contaminated with E. coli bacteria. This numbers are consistent with PCRWR (2011) for Punjab. What is more alarming is that the rate of bacterial contamination rises to 50 percent, when water storage devices within the home are tested. In Sindh, things were much worse. Close to 60 percent of ground water was contaminated at source, with contamination rates rising to 75 percent when water storage devices were tested.

Why is ground water in the most densely populated areas of rural Pakistan so contaminated? The answer lies in the way expansion in access to “improved” toilets and water supply has been achieved. There has been almost no public investment in water or sanitation systems in rural Pakistan. Instead, households have largely self-provided for both, and have done so in the absence of even a basic set of regulatory guidelines. The result has been devastating, especially in the poorest districts. In rural Sindh, for example, most toilets are of the leaching pit or open drain variety and are built in close proximity to water pumps. This sets the stage for the substrate contamination of ground water, especially where the aquifer is shallow. Open drain toilets further concentrate untreated fecal waste around human settlements and much of the waste flowing in open drains eventually enters surface water systems spreading the contamination. Fecal waste is also dumped in open trash heaps around villages, spreading more contamination to surface soil. It doesn’t end here. Untreated waste water is routinely mixed with ground and surface water for crop irrigation. This creates further downstream effects, contaminating the food grown and distributed for consumption in the major urban centers of the country, where it is consumed by the rich and the poor alike. Together this chain of contamination multiplies the channels through which the oral transmission of fecal bacteria can occur—food, flies, fingers, fields, and fluids.

The incidence of diarrhea in Sindh’s largest cities provides clear evidence of this. Even the richest households in cities like Karachi and Hyderabad report diarrhea rates among young children of close to 30 percent. In fact, as we show in the report, living in proximity to an area with poor quality sanitation provides roughly the same exposure to fecal pathogens as being poor.  Interestingly, the evidence also shows that areas with the highest levels of diarrhea and stunting engage in roughly similar or better health behaviors than areas with lower levels.

If anything, stunting, diarrhea and other types of morbidity could well have increased in Pakistan, were it not for the decline in poverty and improvements in diet and primary health care.  This is not to suggest that these factors do not need attention. They do! The problem is one of squarely confronting what is first order. Dietary, curative and behavioral improvements can serve as a temporary bulwark at best, unless the total fecal burden in the environment is reduced, the treatment of water is prioritized and the use of untreated waste water for crop irrigation is controlled.

Dr. Ghazala Mansuri is the Lead Economist at the World Bank.