INVESTMENT CLIMATE IN BALOCHISTAN
June 8 - 14, 2009
To all economic planners and investors, Balochistan's geo-strategic location and huge natural resources present a veritable economic bonanza. The investment climate however emanates from the concept of real security environment, which is yet to be created in the province. The deployment of forces and establishment of check-posts or military cantonments at different places create a sense of vulnerability, rather safety. These are the short-term and temporary measures, which are normally taken to bring calm to an area under trouble. Such measures have been ineffective, even counter productive to solve political problems. What is critical for creating a real security environment is the creation of local stake and fair distribution of development gains. When the prevailing chaos and resentment in the society comes to an end, new doors to optimism, cooperation, and prosperity would open. The politics of issues would find no rich grounds and be replaced by the economics of issues with viable solutions. Ultimately, the rational use of Balochistan's natural endowments would give the country an economic fillip.
There cannot be two opinions about impacts of Mega projects that they would open up the Balochistan converting it into a land of opportunities for foreign investors and the global leaders in corporate governance. Officials believes that free zones in Gwadar port city would contribute to the harnessing of Balochistan's potential in natural resources and development of heavy and large-scale industries, petrochemicals and manufacturing. Gwadar port would provide large-scale employment, and value of land would further increase, and there would be other income generating activities for local people.
Private sector may be involved in establishing mineral-based SMEs, as Balochistan abounds in both metallic and non-metallic minerals. Similarly, investments can be made in establishing Chromite beneficiation plants in Balochistan possessing huge reserves of Chromite. High grade concentrates produced through beneficiation can either be exported at higher prices or be consumed by industries in Pakistan. Stainless steel industry is the major consumer of Chromite. Stainless steel is the alloy of chromium and iron. The performance of the industry largely determines the demand of chromium. Small and Medium Enterprise Development Authority (SMEDA) recently estimated the project cost for a chromite beneficiation plant, capable of producing 15,000 tones of the concentrates.
Marble is the most valued mineral bestowed by nature upon Balochistan. .Marble is an export-oriented sector. The private entrepreneurs may also establish a large number of enterprises in marble sector involving quarrying, processing and trading of marble products. Investment can also be made in developing marble processing centers in Balochistan where automatic tiling plants may be commissioned.
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.
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. There are greater prospects for generation of employment for local people, as a huge labor force may be required to run the shrimp farming units in coastal areas.
In view of the growing importance of Gwadar as a modern investment center, there is a high need to make security of the area foolproof to create an investment climate. Gwadar must be a secure place where the people could do business and the investors could come up with their investments. The prevailing security environment in the province cannot attract foreign investment in Gwadar. Destabilizing security in the province would mean blocking foreign investment in the country.
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. The development should be in accordance with the local needs and the local people should be made the stake-holders in the development of the province, as they can only guarantee the protection and sustainability of any development strategy devised under the government for the province. Need is to create a sense of ownership among the local people making them directly responsible for the security of vital installations.
Developing political reconciliation among different political parties and bringing nationalists into mainstream politics is still the biggest challenge for the government.
The main grievances of Balochistan include the denial of provincial autonomy as guaranteed by the Constitution, royalty on gas and other minerals, economic backwardness and fiscal disbursement on the basis of population.
Worsening law and order situation in the province have already raised security concerns among foreign firms working in the province and many Chinese engineers have lost their lives in acts of terrorism during last five years. In face of the current terrorist menace in Balochistan, there is a high need to put all the intelligence and law enforcing agencies on high alert and in hyperactive position. What is needed is to create real security environment that will serve long-term objectives associated with the economic development of Balochistan. What destabilizes security situation in a region? Political instability, communal disharmony, social chaos and confusion are the main reasons which cause destabilization in civil society and subsequently retard process of economic development.
A real security environment is about the stake, cooperation, support and engagement of the populace in the development activities taking place in their area. The real parameters of security vis-‡-vis development process are yet to be defined in our society. In broader perspective, security concept covers all areas- from economic, social, political and cultural to environmental. If all these areas are secure and invulnerable, the development process, which involves changes, certainly brings a positive change not only on ground but also in social attitudes of the people. In a state of real security, one feels economically, socially, politically, and culturally secured security by all aspects.