Dec 17 - 30, 2007

Balochistan is the country's largest province, with nearly 44% of its surface area and a thinly dispersed population of around 7.5 million. Poverty in the province is a consequence of several factors, including geography and low human capital. Many of these factors increase the cost of providing social services in Balochistan. Though the province is rich in natural resources, yet it has remained in underdevelopment trap. Its resources were not developed and successive governments neglected the province, as it has been on the country's political periphery. During the last five years, the province has been the focus of the federal government that launched mega projects in different economic sectors.

No development strategy can work to combat backwardness and underdevelopment in Balochistan without undertaking a comprehensive research study that could state the province's immediate and medium-term economic development goals. Such a study should be conducted to formulate a cohesive strategy to target sustainable, widespread and cross-sectoral growth and integrated economic development in the province. In this regard, a policy vision paper needs to be prepared. The paper should be based on an analysis of economic and human development trends and a preliminary estimate of provincial accounts.

The former provincial government formulated the Balochistan Poverty Reduction Strategy Paper (BPRSP) to expedite human development and reduce income poverty. The key pillars of BPRSP are engendering growth, managing scarce water resources, reforming governance, improving human development, and addressing vulnerability to shocks. BPRSP states that the provincial government is determined to pursue a robust economic and human development path. However, it has limited resources and flexibility to support its development needs.

Similarly, the Asian Development Bank (ADB) recently approved technical assistance (TA) of US$300,000 for the preparation of Balochistan Economic Report (BER). The TA is primarily aimed at supporting technical studies, facilitating policy dialogue and assisting the provincial government in organizing the annual Balochistan Development Forum (BDF).

Research studies need to be conducted in the following key areas for economic development of the province:

I) - Private sector development

II) - Urban growth centers

III) - Social service delivery

Private sector development: The research studies should determine the key growth poles for the province. A research study needs to be conducted to review the key barriers to private sector development in the province and identify viable initiatives to stimulate private investment and capital accumulation. There are certain sectors, such as the SME sector, mining, agribusiness, and fisheries, which have tremendous potential to generate incomes and employment.

Private sector may be involved in establishing mineral-based SMEs, as Balochistan abounds in both metallic and non-metallic minerals. The province has immense potential for development of shrimp fishery in Sonmiani, Jewani, Kalmat, Gwadar, Pasni and Ormara. The private sector can act as a key player in promoting the shrimp farming in coastal Balochistan purely on the commercial basis. The lands in coastal districts may be allotted to private parties for establishing new hatcheries as viable business -ventures.

On agriculture side, Balochistan is the fruit basket of Pakistan and produces dates and apples of export quality. Private sector may be involved in establishing apple and date treatment plants. The treatment plants serve the purpose of fruit preservation during off-season.

With regard to the development of SMEs, a research study should be conducted to identify the financial, regulatory, and institutional constraints on SMEs. A structural analysis of the SME sector, supported by a quantitative survey of small-scale industries, should also be conducted. There is also a need to highlight sub-sectors with high potential for growth and investment and to propose an integrated strategy to promote SME development and employment generation.

Urban growth centers: Research studies should also be conducted to assess the potential of urban growth centers in Balochistan. One can find the link between regional development and investment in infrastructure and roads, which can promote for instance agribusiness in northern Balochistan, mining in Chaghi district, cross-border trade through Chaman and the Gwadar port development along the coast. An urbanization policy is needed to support urban development and facilitate the growth of service infrastructure for regional economic industries. A comprehensive urban strategy can be formulated after analyzing major cities and townships in Balochistan and assessing their potential to function as urban growth nodes.

Roads are important for socio-economic uplift of Balochistan where no other source of transportation is available. The development of productive sectors, like health and education, also depends upon proper road communications. The limited road access and lack of road network affect the people of rural areas reducing their access to markets.

This is a potent cause of prevailing poverty in the province. The people in remote regions remain deprived of health and education facility mainly because they have no road access to the major economic centers in the province. Recent drought in Aranji area of Khuzdar district killed several people mainly because they had no road access to the district hospital.

A coordinated network of roads does not interlink 26 districts in the province and hence there are missing links between economic centers in Balochistan. Gwadar port is of immense importance not only for trade with CARs but also for the development of Pakistan. There is a high need for establishing roads and warehousing facilities at Taftan, Chaman and Torkham borders in order to make full use of Gwadar port. Balochistan direly needs a mega road sector development project to cope with the new circumstances after the completion of mega projects in the province and an expected surge in economic activities in the province.

Social service delivery: There is a dire need to focus on improvement and formation of human capital for Balochistan to tap internal and external markets, and capitalize on market-driven economic growth. Governance reforms in the province need to be implemented and the institutions in the social sector should be strengthened to improve the effectiveness of public and private social service delivery. The planning and management of social services should be localized in Balochistan, as the centralized planning and management has made public social services less effective and more inaccessible to the poor living in remote areas of the province. This centralization has created undisciplined and unionized government overwhelmed by transfers and service litigations and communities indifferent to social service delivery.