POVERTY: AN ENORMOUS CHALLENGE IN BALOCHISTAN

SYED FAZL-E-HAIDER
Aug 20 - 26, 2007

Balochistan is the country's poorest province, with standards of living and social indicators lagging substantially behind the rest of the country. 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 the province. The backwardness rules supreme across the province. The people have run out of civic facilities and job opportunities at large. Over 50 percent population in Balochistan is living below poverty line, on less than a dollar a day.

Human development indicators in Balochistan are the weakest among the four provinces and improvements will need concerted efforts over the long term. Only 20 per cent of the people in the province have access to safe drinking water compared to 86 per cent in the rest of Pakistan. Village electrification is only 25 per cent compared to 75 per cent in the rest of the country. Infant mortality rate per 1,000 people is 108 in the province as against 100 in other parts of the country. The water-born diseases like typhoid are also common due to lack of access of majority of population to the clean drinking water. According to an estimate, tuberculosis incidence is 177 per 100,000 population. The annual parasite incidence of 6.56 for malaria in Balochistan is almost 30 times the parasite incidence for the whole country. Half of school age children attend elementary school, and one third of children 1223 months are immunized.

ACCESS TO EDUCATION

The situation of basic amenities and access to education is also far below the ratio of other provinces. Nearly one half of the local population relies on unprotected wells, ponds, canals, or streams for their drinking water needs. Drinking water is often polluted and distributed without treatment. According to an estimate, only in five districts (out of 26 districts), sanitation is accessible to more than 51% of the population; in nine districts adequate sanitation is available to 2650% of the population, and in 13 districts, household sanitation coverage is only 425%. Access to sewage disposal infrastructure is largely absent. In most districts, less than 3% of the population has access to wastewater disposal facilities.

Only 6% of the land is cultivable and productivity is low because of the arid conditions. The groundwater is rapidly being depleted. The rugged and inaccessible terrain, limited water resources for irrigation, large illiterate population, ethnic diversity and traditional women's status are added challenges to economic growth and human development. The people particularly in calamity-hit rural Balochistan are currently recovering from the devastating rains and flash floods. What has actually limited the scope for financing the social sector development in Balochistan- large stocks of high-interest debt, constrained fiscal space, the challenging social sector indicators, constraints in social service provision, and low current investments in the social sector.

The people face harsh conditions, including periodic drought and lack of employment.

The recent crippling drought severely affected agriculture and livestock in the province. The poverty level particularly in rural areas jumped from 50 per cent to more than 70 per cent. The apple orchards in the province met the disaster for scarcity of water. The growers of apple suffered huge financial losses and caught in debt trap for resorting to heavy borrowing in order to save their orchards. Livestock raisers suffered the most.

During the FY 2000-2001, only 9.2 per cent of the total Khushhal Pakistan program budget had been allocated for Balochistan compared to 16.2 per cent for the NWFP, 19.7 per cent for Sindh, and 48.9 per cent for Punjab. During the first year of the program, the utilization as a percentage of the budgeted amount was the lowest for Balochistan at 2.8 per cent compared to 7.7 per cent in the NWFP, 8.2 per cent in Sindh, and 19 per cent in Punjab.

The late Dr. Mehboob-ul-Haq described the causes of the present disturbing situation and the apparent divorce between economic growth and social and human development in Pakistan. These causes included a very skewed income distribution; the absence of any meaningful land reforms; non-existence of income tax on agricultural incomes; an overwhelming dependence of the fiscal policy on indirect rather than direct taxes; the heavy burden of defence expenditure and debt-servicing on limited budgetary resources; political domination by a rentier class that preempts the patronage of the state in its own favour; and a very corrupt ruling elite." It is not the unequal income, according to him, but the unequal distribution of opportunity - unequal excess to the education, credit, public utilities and other services that is a root cause of the poverty". Exactly same is the case with Balochistan.

ROZGAR SCHEME

President's Rozgar scheme has the capacity to dent the vicious cycle of poverty in Balochistan. Under the scheme, CNG Rikshaws have been provided to the unemployed youth in the province through National Bank of Pakistan at easy installments. Today, one can see CNG Rikshaws on every nook and corner of the provincial capital Quetta. The unemployed of the province have certainly benefited from the scheme, but there always remains a room for transparency to make the scheme a success.

Balochistan direly needs a comprehensive micro-finance development strategy to alleviate poverty. A strategy should be devised to ensure the access of poor and low-income households to institutional financial services. Promotion of Microfinance sector is must for alleviating poverty in the province. Joint efforts should be made by regulators and practitioners of microfinance for promotion of micro-finance sector. The lack of adequate human and institutional capacity, shortage of local expertise and weak coordination among various stakeholders are the main hurdles in expanding micro-finance. These hurdles need to be removed for proper growth of micro-finance sector in the province.

Kushhali Bank is the country's largest micro-finance bank with a shareholding of over 1.7 billion from private, multinational, public sector commercial banks and is funded by Asian Development Bank with a credit line of $ 150 million. Kushhali bank can also prove an important and effective tool to combat widespread poverty in the province. It must broaden its branch network and client base amongst the local communities. Micro credit banking can bring about a real change in the lowest strata of society and improve the socio-economic status of the poor segments in the province.

FINANCING OF PROVINCIAL DEVELOPMENT PROGRAMME FY 2004 (%)

ADP FINANCING

PUNJAB

SINDH

NWFP

BALOCHISTAN

TOTAL

ADP

100.0

100.0

100.0

100.0

100.0

Provincial contribution

71.9

80.8

44.1

91.9

73.3

Federal assistance

28.1

19.2

55.9

8.1

26.7

FPA

27.9

18.9

55.7

8.0

26.5

Loans

19.4

18.8

39.6

6.9

19.7

Grants

8.5

0.1

16.1

1.1

6.8

Source: Explanatory Memorandum on Federal Receipts 2004-05