SINDH ECONOMIC POTENTIAL & KARACHI FACTOR
Oct 3 - 9, 2011
Endowed with nature's priceless bounties including sea, river, wildlife, and natural resources, Sindh is yet to show its true potential both on economic and human development fronts.
Bounded to the west by the Indus River and Balochistan, to the north by Punjab and to the south by the Arabian Sea, Sindh inherits a rich history of civilization and demographic transformation. Stretched to 141,000 kilometers of land, Sindh holds in its fold more than 42 million people - around 24 percent of the total population of Pakistan.
Contrary to these official figures, some sources claim that Sindh's population has crossed the 60 million mark. Economically, Sindh is the most productive province of the country with a per capita GDP of $1,400. Historically, Sindh's contribution to Pakistan's economy has ranged from 30 percent to 33 percent, with agriculture and service sectors contributing 21-27 percent each and manufacturing sector boasting a much higher contribution of 37-47 percent. The agriculture is the bread and butter of the rural population of Sindh. It not only feeds that population, but also contributes significantly to the country's total economy. Besides producing main crops, cotton, wheat, rice, and sugarcane, Sindh produces vegetables and fruits of quality.
Sindh's contribution to county's main crops is as follows: rice 30 percent; sugarcane 30 percent; cotton 25 percent; and wheat 14 percent. In addition, Sindh accounts for 30 percent of country's vegetable production.
Boosted by multiple coastal accesses and two seaports, Sindh's highly diversified economy has two main features - urban industrial and financial economy, and rural agricultural economy. On natural resource side, Sindh is the richest province with respect to the three basic components of energy, coal, oil, and gas.
It produces major portion of country's gas - up to 70 percent according to some estimates. The newly found and developed Thar coal resources have given a new hope of economic rejuvenation through energy security. Both domestic and foreign investors have registered entrepreneurial interest in Thar coal.
According to the Pakistan Economic Survey 2010-11, the government of Sindh has allocated Block-III of Thar coalfields to UK's Cougar Energy for coal extraction and building of a 400 MW power plant. Another UK company, Oracle Coalfields Pic, has been allocated Block-VI for coal mining and installing a 300 MW power plant extendable up to 1000 MW.
The UAE investor, Bin Daen Group, has been allocated Block-IV for coal mining and installing 1000 MW power plant. Block-II has been set aside for a project coming up as the result of a joint venture between the government of Sindh and Engro Powergen (Pvt) Ltd. The joint venture project envisages coal mining and setting-up of a 600-1000 MW power plant.
Besides Thar coalfields, investors have shown interest in Sindh's other coalfields as well. China National Chemical Engineering Group Corporation has acquired, through the Sindh government, leasing rights in a block in Sonda Jherruck coalfields for carrying out integrated coal mining operations and building of a 400 MW power plant. In yet another joint venture with Al-Abbas Group Company, the Sindh government has allocated area in Badin coalfield for coal mining and building of a 300-600 MW power plant.
The most promising of all is Planning Commission's 50 MW Pilot Project based on the concept of underground coal gasification. The technical and financial viability of this project, as disclosed by its mastermind, Dr. Mubarakmand, will herald a new energy era.
According to Sindh Investment board, the province collects 70 percent of income tax and 62 percent of sales tax. Sindh houses 54 per cent of country's textile units, 45 per cent of its sugar mills, 20 per cent of pulp & paper mills.
In addition, 35 per cent of edible oil is processed here. Sindh accounts for 34 per cent of total industrial capacity in large scale manufacturing and 25 per cent of small scale manufacturing.
Sindh's manufacturing sector has been resilient and investments, both of domestic and foreign origins, have continued to boost Sindh's economy. Multinational companies and domestic enterprises such as Proctor & Gamble, Coke International, Lotte Group of South Korea, Al Tuwariqi Steel Mills, Engro Corp., JS Group, National Foods, Agha Khan Foundation, Wind Energy Farms and many others are committed to make cumulative investment worth US$ 8 billion in the province in times to come.
Sindh's overall literacy rate is 58.2 percent - a notch or so up the country literacy rate of 57.7 percent, and a notch or so down the Punjab's overall literacy rate of 59.6 percent.
On a comparative note, Sindh's urban literacy rate is 74.9 percent (male 82.2 percent and female 66.8 percent). This is a notch or so up the Punjab's urban literacy rate of 73.5 percent (male 78.9 percent and female 67.8 percent). On rural side, female literacy rate in Sindh is just 20.3 percent in sharp contrast to Punjab's corresponding rate of 40.7 percent. This highlights a serious issue of low emancipation of woman in Sindh.
Obviously, the grip of feudalistic system is much stronger on Sindh's woman than on her counterpart in Punjab. Improvement in women education in Sindh, to match with the level attained in Punjab, can further boost Sindh's agro and social economy.
The economic and social development levels attained in Sindh are not true indicators of its real potential. Sindh has suffered a number of destabilizing influences that have kept its economic and social growth below the par level. A long list of destabilizing influences can be boiled down to the following major factors: non-abolition of feudal system immediately after the creation of Pakistan; lesser mobility of Sindh's rural population that gave a reason to more mobile communities of the country to seek dividends from Sindh's economic growth potential; open government policy biases to undermine Sindh's economic development.
The creation of Pakistan brought with it certain undeniable realities, one of them being the two-way migration of population causing a major reshuffle in the demographic structure. Urdu-speaking people, mostly crossing through the Khokhrapar border, concentrated into Karachi. This evoked a natural sense of alienation and deprivation among the original population of Sindh. On the positive side, Karachi became the industrial and financial hub of Sindh and Pakistan. It boasted of having the highest literacy rate in the country. The highest damage caused to Pakistan and Sindh ensued from the alternation of autocratic and democratic systems of governance. Since, under both systems, elections happen to be a must, the war of improving vote banks through demographic reshuffles became a norm. Karachi suffered on this account the most.
Being the nerve centre of country's economy, a paralyzed Karachi wipes off the economic growth with every assault on its peacefulness. The recent months have seen the bloodiest Karachi. The prevailing calm, though uneasy, is proof that things in Karachi happen according to the scripts. Pakistan is already passing through rural-to-urban migration of population. The rural-to-urban ratio in 1981 was 28 and 72 which has now changed to 37 and 73. A controlled rural-to-urban shift of population for economic reasons is a positive change as it raises peoples' standard of living and quality of life. A political reshuffle in population, through illegal settlements, contributes negatively to the economic growth as clashes of interests creating law and order situation take place. Karachi is going through this political demographic reshuffle process. The economy of Sindh (and Pakistan) is at stake.