A Review of Logistics and Transport Studies in Pakistan Hard or Soft Infrastructure?

ABSTRACT

The study aims to develop a systematic review on the logistics and transport sector of Pakistan aiming to identify the main themes taken up in the research and their recommendations for development of this sector. For this, systematic literature review was employed as the guideline to collect the research articles. The research articles were extracted from google scholar, jstor and SciSpace AI. The articles falling in the W, X, and Y categories of the Higher Education Commission’s HJRS system were included in the final review. The review includes 43 articles which have been clubbed into the major themes.

INTRODUCTION

The logistics infrastructure plays a critical role in domestic commerce. In fact, transport infrastructure is the asset that increases the productivity of other players in the ecosystem. Pakistan was ranked 122 out of 160 countries in the Logistics Performance Index (LPI) 2018, while it disappeared from the international scenario in the LPI 2023. This calls for immediate attention to the sector that faces several challenges, which must be addressed if it is to compete in the global economy, especially in the region where other countries like India and China are performing much better. Logistical bottlenecks increase the cost of production of our goods by about 30 percent and Pakistan losses around 6 billion $ (4 to 6 present of GDP) because of these insufficiencies (SBP, 2007).

The National Freight and Logistics Policy (2021) has rightly pointed out that the logistics sector is fragmented and in dire need of modernisation. The transport related decision making involves 9 federal ministries and 22 departments directly or indirectly (Imran & Low, 2017). A lack of institutional framework has further impeded the growth of the logistics sector, and a mixture of old and new laws govern what is supposed to be a sector operating in the modern world. Currently, the logistics sector is divided among multiple federal ministries, making it extremely difficult to establish coherent regulations for the sector’s growth and integration. The Ministry of Commerce handles foreign and transit trade. The shipping services are overseen by the Ministry of Ports and Shipping. The Ministry of Defense is responsible for airports and aviation. The Ministries of Communications and Railways manage rail and road infrastructure as well as freight and Customs and cargo clearance affairs fall under the jurisdiction of the Ministries of Finance and Interior.

This fragmented structure prevents the effective implementation of existing important regulations like the Trucking Modernisation Plan and the National Transport Policy, which were approved in 2007. Consequently, Pakistan has not ratified or adopted international standards and conventions concerning the transportation of goods and products, intensifying the challenges faced by the sector. Furthermore, red tape, which includes burdensome documentation requirements and furthermore, red tape, which includes burdensome documentation requirements and customs procedures, results in delays, escalates shipment costs, and reduces the ease of doing business in the country.

In its quest for growth, Pakistan followed the “investment in infrastructure” jargon in early 2000s through various programmes like Khushal Pakistan Programme in 1996 and 2007, National Trade Corridor Improvement Programme (NTCIP) in 2005, National Development Plan (NDP) over 2000–2006, National Highway Improvement Programme (NHIP) in 2007, and China Pakistan Economic Corridor (CPEC) in 2013. However, the financing requirements were massive, and resources limited. The public funds under the Medium-Term Development Framework (MTDF) could cover less than half of the required transport infrastructure investment. The remaining investment had to be secured from the private sector through a mix of policy reforms, institutional support, incentives, and financing mechanisms (SBP task force, 2007). Despite that an average project run three times longer and two times more expensive than the initially planned cost (Pasha; 2011), the politically motivated, growth less investment in infrastructure continued with donor consultations and financial assistance constituting a staggering 80.35 percent share of PSDP (Haque, et al. 2020). By 2021, Pakistan had a road density of 0.58 indicating sufficient but highly skewed road infrastructure (Table 1 and Figure 1).