CREATING A BUSINESS-FRIENDLY ENVIRONMENT IN BALOCHISTAN

SYED FAZL-E-HAIDER
Dec 01 - 07, 2008

Politically stable, socially progressive, and economically developed Balochistan provides the investors and businessmen an ideal environment for doing and growing their businesses. Unfortunately, it is still a dream to come true as the restive province cannot attract the investors despite of its geo strategic location and enormous natural resources.

Balochistan is the country's poorest province, with standards of living and social indicators lagging substantially behind the rest of the country. There is a need to formulate a cohesive strategy to target sustainable, widespread and cross-sectoral growth and integrated economic development in the province.

Last month, in a meeting with the chairman of King Ping, the Chinese mini car manufacturing company, the minister of state for industries and production Ayatullah Durani told the Chinese delegation that there was a great scope for investment in Gwadar as government is providing security to the foreign investors. He assured the Chinese that if they set up a car manufacturing plant in Gwadar, the government of Balochistan would provide them complete security and the land on cheap rates.

SECURITY & POLITICAL STABILITY

Security is No.1 issue related to the economic development of the province. No business activity can smoothly take place in a risky environment. Worsening law and order situation in the province has raised security concerns among foreign firms working in the province and many Chinese engineers have lost their lives in acts of terrorism during last three years. The prevailing security environment cannot attract foreign investment in Gwadar and other sectors of provincial economy including the oil and gas exploration. It also calls into question the guarantees of security for the proposed multi-billion dollar gas pipelines either from Turkmenistan, Iran or Qatar that would have to run through Balochistan.

Long-term security objectives are associated with political stability and social harmony. Balochistan has turned out to be a Mega sensitive province due to the discriminatory attitude showed against it for the last five decades. Political stability is essential to maintain stable security environment for generation of business activity. The political unrest is a major hurdle for creating business-friendly environment in Balochistan. For the government, developing political reconciliation among different political parties and bringing nationalists into mainstream politics is the biggest challenge. The perception of a rapid economic progress poses a threat to centuries-old feudal status of tribal chiefs under which they have been enjoying power and exploiting the people. It is also a proven fact that the use of military might has been ineffective in bringing about a political or social change in a society. The only way out from the current Balochistan crisis is developing the province economically.

The most daunting challenge for the government is the improvement of law and order in the province. A sense of ownership needs to be created among the local people making them directly responsible for the security of development projects and vital public installations.

INFRASTRUCTURE

Adequate infrastructure is also a prerequisite for growth of business enterprises in the province. As far as infrastructure is concerned, the province essentially lacks the facilities like roads, electricity, gas and other communication networks. A coordinated network of roads does not interlink 30 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 and expected surge in economic activities in the province. The development of productive sectors, like health and education, also depends upon proper road communications. The limited road access and lack of road network affects the people of rural areas reducing their access to markets. A comprehensive urban strategy needs to be formulated by analyzing major cities and townships in Balochistan and assessing their potential to function as urban growth nodes.

HUMAN DEVELOPMENT

The province's natural resources however will have no impact on development if it is not matched with human resources that can tap this natural endowment. Moreover, the concept of good governance and a strong civil society remains vague without a population with a basic level of education. Serious efforts and consistent policies are needed to beat back the prevailing educational backwardness in Balochistan. Undoubtedly, an effective and sustained educational reform hinges on a combination of policy and institutional changes. Equally important is to invest the right amounts for the appropriate types of education.

There is a high 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 strengthened to improve the effectiveness of public and private social service delivery.

CIVIL SOCIETY

A powerful civil community is also essential to promote business friendly environment. Civil society covers a wide spectrum of individuals and groups, ranging from private sector bodies, human rights organizations, trade unions and farmers' organizations, to mosques, community organizations, organized pressure groups and the media.

The weak civil community also promoted tribalism and feudalism as the government did not take such measures which could encourage the growth of a powerful civil society. The economic and social backwardness in conjunction with a deeply entrenched sense of tribalism actually led to an escalation of hostilities in the province. The tribal animosities frequently break into recrudescence of sanguinary violence confining the people to their tribal zones of influence.

PRIVATE SECTOR

Balochistan needs a robust private sector, which could play an active role in creating business-oriented community. With regard to the development of private sector, there is a need to identify the financial, regulatory, and institutional constraints and conduct a structural analysis of the private sector. There is also a need to highlight sub-sectors with high potential for growth and private sector investment. The provincial government should encourage the private parties by offering them incentives for making investments in different economic sectors.