By: Muhammad Mehdi & Waqar Haider
Economists have identified poor infrastructure as a bigger barrier to growth in sales, according to the World Bank’s research, current patterns in transportation and trade logistics cause inefficiencies that cost Pakistan’s economy around 4-6 percent of GDP each year, a severe restriction. The severe energy crisis has slowed growth by 3–4%, and 56% of the general public believe the condition of local roads has worsened in the last five years
The survey also showed the poor condition of the roads is causing 55% of SMEs (small and medium-sized enterprises) to lose an average of RS, 13, 00000 each per year.
Pakistan’s infrastructure is improving but from a low starting point. Poor-quality roads and transportation facilities have long been a problem for Pakistan’s trade, and are widely seen as major contributors to the continent’s low competitiveness. The vast majority of roads in Pakistan are in poor condition, with roughly 53% of them still unpaved.
We’ll be concentrating on how bad roads Effect Company sales in the northern areas of Pakistan in Gilgit, FATA, Chitral, we all know that the road conditions in the north is in terrible due to the geography. This has a major impact on sales, if these roads are entirely metaled, the cost will be reduced by 50%. For example, today it takes 15 hours to reach the destination, if these roads are totally metaled, it would only take 7 to 8 hours. This will benefit not only the manufacturing companies, but also the people who live there. Because of the poor state of the roads, inventory prices are rising due to the high cost of transportation. People are purchasing items at exorbitant prices, which will be a significant financial pressure for them given their low living standards. Small companies who face greater expenditures as a result of longer travel times and higher fuel prices will have no choice but to pass those costs on to customers. Better roads will affect company site decisions, and employment will follow businesses, which cannot be the best way forward.
As a result of worsening road conditions it is very difficult for the distributors to carry fragile items, Not only that, but transporting expensive machinery such as hospital machines is extremely difficult for them due to the physical structure and fragility of the machinery. And when we’re talking about everyday commodities like food, body cleansing, laundry, shopping, and convenience products. Some distributors do not purchase items from original manufacturers since they are more expensive, and consumers in the north do not have as much purchasing power, thus local distributors opt for low-cost products or first-copy products made locally under the original manufacturer’s name. As a result, when you use a first-copy product manufactured locally, you know what you’re going to get. This will also have negative impact on the original product’s brand name, which was manufactured illegally by local manufacturers. And people have bad brand positioning of the product this develops trust issues, original product’s sales are declining, and copy products impact a bad image on the brand.
This goes with all the commodities they use if we look at the edible products imagine what people are consuming they are consuming poison, which is the reason the cancer ratio is higher in the north and many other diseases.
Poor roads condition can cause delays in getting supplies to customers on schedule. And most of the time the road is blocked because of landslides, which occur due to a lack of planning. Eventually, consumers go for substitute products which affect the sales of the company.
Developed infrastructure helps in many terms as mentioned above so developing a good infrastructure will develop economic growth as well as manufacturing companies, and It will finally benefit the final consumers.
The writers are students of SZABIST Islamabad.