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Pakistan Strategic Environmental, Poverty and Social Assessment of Trade and Transport Sector Reforms

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Pakistan Strategic Environmental, Poverty and Social Assessment of Trade and Transport Sector Reforms Report No 71812-PK Pakistan Strategic Environmental, Poverty and Social Assessment of Trade and Transport Sector Reforms December 2012 Environment, Climate Change and Water Resources Department South Asia Region Document of the World Bank ACRONYMS AQM Air Quality Management NHA National Highways Authority CGE Computable General Equilibrium NTC National Trade Corridor CO 2 Carbon Dioxide NTCMU National Trade Corridor Management Unit DALY Disability Adjusted Life Year PACCS Pakistan Customs Computerized System ESCAP United Nation’s Economic and Social Pak-EPA Pakistan Environmental Protection Agency Commission for Asia and the Pacific ESW Economic and Sector Work PCRWR Pakistan Council of Research in Water Resources ET Environmental Tribunal PEPA Pakistan Environmental Protection Act of 1997 EU European Union PEPC Pakistan Environmental Protection Council FSW Female Sex Workers PIA Pakistan International Airlines GDI Gender Development Index PQA Port Qasim Authority GDP Gross Domestic Product PM Particulate Matter GHG Greenhouse Gases PM 10 Particulate Matter less than 10 microns GoP Government of Pakistan PM 2.5 Particulate Matter less than 2.5 microns HDI Human Development Index PPM Parts per million IDA International Development Association PR Pakistan Railways IDP Internally Displaced People PRSP Poverty Reduction Strategy Paper IDU Injecting Drug Users PS&QCA Pakistan Standards and Quality Control Authority JICA Japan International Cooperation Agency PSIA Poverty and Social Impact Analysis KAIRP Katchi Abadi Improvement and SAM Social Accounting Matrix Regularization Programme KICT Karachi International Container Terminal SCEA Strategic Country Environmental Assessment KP Karachi Port SEA Strategic Environmental Assessment KPT Karachi Trust Port SEPSA Strategic Environmental, Poverty and Social Assessment KWSB Karachi Water and Sewerage Board STI Sexually Transmitted Infections LFS Labor Force Survey TEU Twenty-foot Equivalent Unit MoE Ministry of Environment TFP Total Factor Productivity MSW Male Sex Workers TOR Terms of Reference NACP National AIDS Control Program UNDP United Nations Development Programme NEET Not in Education, Employment of Training UNPF United Nations Population Fund NEP National Environmental Policy USAID United States Agency for International Development NEQS National Environmental Quality Standards USD United States Dollars NGO Non Governmental Organization WHO World Health Organization ii Copyright © 2012 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Suggested citation: Ernesto Sanchez-Triana and Javaid Afzal (2012) Pakistan. Strategic Environmental, Poverty and Social Assessment of Trade and Transport Reforms. CEA Series, South Asia Region. Washington, DC: World Bank. The findings, interpretations, and conclusions herein are those of the author(s) and do not necessarily reflect the views of the International Bank for Reconstruction and Development/The World Bank and its affiliated organizations, or those of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations and other information shown on any map in this work do not imply any judgment on the part of The World Bank of the legal status of any territory, or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/The World Bank encourages dissemination of its work and will normally grant permission promptly to reproduce portions of the work. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Centre, Inc. iii CURRENCY EQUIVALENTS Unit of Currency = Pakistani Rupees (PKR) 1 US$ = 94.279700 Fiscal Year July 1-June 30 Vice President: Isabel Guerrero Country Director: Rachid Benmessaoud Sector Director: John Stein iv Sector Manager: Karin Kemper, Gajanand Pathmanathan, Herbert Acquay Task Managers: Ernesto Sánchez-Triana and Javaid Afzal ACKNOWLEDGEMENTS________________________________________________ This report is a result of the fruitful collaboration between the Planning Commission of the Government of Pakistan and The World Bank. This report was prepared by a team led by Ernesto Sánchez Triana (SASDI). The core team included: Javaid Afzal (co-TTL), Santiago Enriquez, Cecilia Belita, Ghazal Dezfuli, Dan Biller, and Sohail Malik. The extended team included Asif Faiz, Zia Al Jalaly, Amer Zafar Durrani, Hasan Zaidi, Zafar Raja, Jean- Noel Guillossou, Fernando Loayza, Rahul Kanakia, Paula Posas, Hammad Raza, Bjorn Larsen, Elena Strukova, Marie Florence Elvie, Aude-Sophie Rodella, Stefanie Sieber, Safiya Aftab, Hina Nazli, Wajiha Saeed , Sara Rafi, Shehreyar Rashid, Hiba Zaidi, Kulsum Ahmed, and Innovative Development Strategies (IDS). Valuable guidance was provided by the peer reviewers Sonya Sultan, Fernando Loayza, Catherine J. Nove-Josserand, Leonard Ortolano (Stanford University), Daniel Slunge (University of Gothenburg), Jack Ruitenebeek (IUCN), and Rob Verheem (Netherlands EIA Commission). Several colleagues also provided helpful advice and detailed contributions, particularly Asif Faiz, Shahzad Sharjeel, and Amer Zafar Durrani. Jeff Lecksell amended the maps to match Bank guidelines. The Government of Pakistan, mainly through the Planning Commission and the National Trade Corridor Management Unit, provided key feedback during the preparation of the study and participated actively in the production of diverse parts of the report. The team is indebted to Dr. Nadeem Ul Haq, Deputy Chairman Planning Commission and various Secretaries of the Planning and Development Division for their valuable guidance and patronage of the study. The team also recognizes the important contribution of the government officials: Dr. Raja Aurangzeb Khan, Chief Environment, Planning Commission, Sysed Tanweer Hussain Bukhari, Project Director NTCMU and his team, Malik Muhammad Akram and Ghulam Mohayuddin Marri, Members Infrastructure, Planning Commission. The team is particularly grateful to the Australian, Netherlands, Norwegian, and Finnish governments for their support to fund some of the studies that underpin this report. v TABLE OF CONTENTS Acronyms ................................................................................................... ii Tables ...................................................................................................... viii Figures ...................................................................................................... ix Executive Summary .................................................................................... 1 Chapter 1. Introduction ........................................................................... 12 1.1. Objective ...................................................................................................... 12 1.2. Methodology ................................................................................................ 14 1.3. Contents of this Report ................................................................................ 18 Chapter 2. Sector Status and Trade and Transport Policy Reforms ........ 19 2.1. Freight Transport Sector ............................................................................. 21 2.1.1. Highways .......................................................................................................................................... 21 2.1.2. Trucking ........................................................................................................................................... 24 2.1.3. Railways ........................................................................................................................................... 25 2.1.4. Aviation ............................................................................................................................................ 29 2.1.5. Ports and Shipping ......................................................................................................................... 30 2.2. Trade Facilitation ........................................................................................ 32 2.3. Trade and Transport Reforms ..................................................................... 33 Chapter 3. Priority Issues Associated with Freight Transport Reform .... 35 3.1. Spatial Transformation ............................................................................... 35 3.2. Effects of Productivity Enhancements of the Transport Sector .................. 40 3.2.1. Household-Level Poverty ............................................................................................................... 40 3.2.2. Household Income .......................................................................................................................... 42 3.2.3. Sectoral Value-Added ..................................................................................................................... 44 3.2.4. Economic Indicators ....................................................................................................................... 46 3.3. Summary ...................................................................................................
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