Faced with a severe balance of payment crisis, Pakistan’s new government invited a business delegation from Saudi Arabia to explore Balochistan’s investment potential – an arrangement which, at that point, was expected to yield a foreign currency inflow.
This is not the first time that areas from resource-rich Balochistan are being traded to save the country — as part of the sales pitch, projects such as the Riko Diq mine and the oil city in Gwadar were showcased to potential investors. It is not a misplaced idea either, especially if Balochistan stands to gain in the arrangement by empowering its people and improving their lives.
Those who are directly involved in the province’s development activities highlighted three key issues deterring Balochistan from creating an environment for local economic growth. A questionable law and order arrangement topped the list, preventing a timely and efficient delivery of public services. In sizable districts such as Awaran and Chaghi, it is difficult to access medical help, let alone find women doctors. Moreover, credible civil servants often shy away from working in such areas as there are no measures in place to safeguard their lives and assets.
Secondly, the political makeup of the province prevents it from attracting high-quality ‘factors of production’. For example, it has been difficult to attract skilled labor, long-term capital and a steady supply of utilities such as electricity — the basic perquisites to kickstart local economic growth.
Former governments who formulated industrial and investment policies for the province were challenged to recruit and retain talent, even as the Baloch elites amplified the narrative against the Punjabi community in the area. This resulted in the Punjabi working class being slowly driven away in the past two decades. The treatment meted out by the Balochis toward the highly-skilled Punjabis — who were part of the province for a very long time — has deterred good talent from moving to Balochistan for employment opportunities.
Since a majority of the local laborers continue to work in the agricultural sector, it would help to introduce effective measures such as reduced prices, tax free import of agricultural machinery, a rebate in case of export to Afghanistan, Iran and others; and a concessional provision of inputs for farmers in horticulture. This would translate into a lot of success for the province as it encourages progressive farming.
Moreover, in order to promote local generation of energy, the province’s wind power – specifically in the NokKundi, Hoshab, Washap, Panjgur, Turbat, Mastung, Dasht and Zhob regions — should be harnessed to its full potential by providing attractive tariffs.
Another issue at hand is that the financial sector has not expanded its banking and insurance network in several areas of Balochistan. The banking sector’s financial inclusion program ignores the fact that the population — dealing with prolonged violence – cannot access its products. A population that continues to rely on primitive production methods lacks a connection with commodity markets. Therefore, a lack of conventional banking channels between Iran and Pakistan is a major reason for preventing traders from reaping the benefits of doing business across borders.
The third issue pertains to the fiscal resources for the province. While Balochistan remains heavily dependent on transfers from the federal budget, its own resource mobilization continues to remain low. It is therefore pertinent that the three revenue authorities within the province are strengthened to collect progressive tax revenues. An increase in collections would provide the provincial government with more financial flexibility to spend on developing its social sector and improve human resources.
Any future growth strategy for Balochistan should also promote the blue economy which is the sustainable use of ocean resources for economic growth and job creation. The province has vast untapped potential in sectors such as marine fisheries, marine energy, coastal tourism and sea transport.
Pakistan also needs to rethink its policy response to the economic woes of Balochistan; perhaps in a manner which mitigates various forms of deprivation. Dr. Kaiser Bangali in his recent book ‘A Cry for Justice: Empirical Insights from Balochistan’ highlights five key aspects responsible for a genuine sense of deprivation among the people of the province. These include: missing gains from gas sector of Balochistan, federal development expenditure failing to help the province, federal social protection not properly targeted at the people of the province, federal civil service unable to create ownership of policies and the prevailing structure of electoral representation which perhaps also accentuates a feudalistic and elitist culture in Balochistan.
A failure to act now toward inclusive growth, social justice and protection of natural resources in Balochistan could result in the province remaining hostage to social ills, with its youth falling prey to promoters of violent activities.
Dr. Vaqar Ahmed is Joint Executive Director of the Sustainable Development Policy Institute, Pakistan. His book ‘Pakistan’s Agenda for Economic Reforms’ was recently published by the Oxford University Press.