PROSPEROUS SINDH NOT POSSIBLE WITH INTERNAL FRACAS
SHABBIR H. KAZMI
Oct 3 - 9, 2011
Sindh can be rightly defined as the driving engine of Pakistan's economy. It has the country's only steel mill, two seaports, big quantity of natural gas, the largest share in urea manufactured in the country, large number of pharmaceutical units and the largest export processing zone.
The province also contributes towards the largest share in taxes. Karachi, the provincial capital, has almost one-tenth of the country's population. The city is bigger than 85 member countries of the UN. It is also the gateway to Afghanistan and Central Asian countries. Lately, when Karachi was victim of mayhem and more than 500 people were killed in Karachi in two months, it was realized that maintaining peace in the city is a must for keeping economy of the country vibrant. The closure of city for one day costs more than Rs5 billion to the national exchequer.
Sindh not only produces the largest quantity of natural gas and crude oil, it can also be termed energy corridor. All the imported black and white oil products are discharged at Karachi to feed two refineries operating in Karachi, one in Balochistan and even the largest refinery of the country located at Mahmoodkot.
Over two million tons edible oil is also discharged, stored, and dispatched to upcountry from Karachi. The two ports handle not only Pakistan's foreign trade but also Afghan transit trade. Added to this is the burden of handling Afghanistan-bound Nato supplies. It is estimated that around 3,000 trucks and trawlers are dispatched for upcountry every day besides dozens of cargo trains carrying assorted goods including oil supplies.
Over the years, efforts were made to establish industrial estates throughout the country, including duty free zones, but Karachi remains the hub of industrial and commercial activities. The climatic conditions of Sindh are most conducive for the cultivation of sugarcane and the provinces still produce huge surplus of sugar which meets the requirement of Balochistan, where no sugar mill is operating and goes to the northern areas of Pakistan. Politically motivated permissions were given for establishing sugar mills in the cotton-growing belt of Punjab but the outcome can be termed disastrous.
While average recovery in Sindh is around 10.5 per cent, the average hovers less than eight per cent in Punjab. The only reason for this disparity is unsuitable climatic conditions of Punjab for the cultivation of sugarcane. This could be best understood by a simple fact that sugarcane requires humid climate with high temperature. Punjab with high temperature and dry climate offers ideal conditions for the cultivation of cotton. The successive governments granting permission for establishing sugar mills in Punjab were warned about the fatal outcome but paid no heed. The decision has been causing huge losses for the farmers as well as the country. Farmers get lower return per acre and the country has been deprived of huge quantity of cotton.
Traditionally, entrepreneurs have been establishing manufacturing plants close to the seaports mainly due to the ease in handling raw materials and finished products. Therefore, when the government decided to establish steel mills at Karachi, a dedicated port was constructed to handle imported coal and iron ore for the mills at Bin Qasim.
Over the years, this port has become multipurpose and now handles urea imported in bulk and export of wheat and cement. Zulfiqarabad terminals handle supply of furnace oil of Hub Power Plant as well as Bin Qasim Power plant of the KESC. In the vicinity of this port, Karachi Export Processing Zone and Al-Tuwairqi Steel Complex have been established.
Bin Qasim Industrial Zone has attracted billions of dollars investment in automobile assembly/manufacturing, PTA, fertilizer and chemicals. A terminal for the handling and storage of LPG and other liquid cargos has been established. A site was also selected for establishing LNG terminal but the project has been delayed, and is now costing billions of dollars loss to the country due to shortage of gas in the country.
It is pertinent to mention here that the industrial units, CNG stations, and power plants located in Sindh are suffering only because the province is not allowed to draw its share of gas. The province is not asking for extra gas but the legitimate share as per the constitution of the country. It is also necessary to point out that according to Fertilizer Policy 2001, Mari gas field has been dedicated to the fertilizer industry but the fertilizer plants getting gas from this field face 20 per cent cut in supply because the gas has to be diverted to a power plant. The most ironic is the failure of the government to meet the committed supply of gas to Pakistan's largest single train urea plant capable of producing 1.2 million tons urea. Those insisting on curtailing gas supply of fertilizer plants just do not understand the simple equation. Imported urea costs nearly three times the cost of locally produced one and government has to pay billions of rupees subsidy to meet the cost difference.
At times, one feels completely frustrated when the policy planners talk about high cost of generation because exploitation of Thar coal can help in curtailing unit cost substantially. It is on record that ex-premier Pakistan Benazir Bhutto performed the ground breaking ceremony of a Thar coal based plant nearly 15 years ago but hardly any work has been done to benefit from this treasure. One feels even greater disappointment because Lakhra coal based power plant has been closed, not because of shortage of coal but due to gross mismanagement.
Sindh Board of Investment has been established but has not yielded any fruit as yet. Karachi alone needs to add 2,500MW generation capacity to overcome extensive load shedding touching almost 10 hours a day. This requires millions of dollars investment and the sponsors will face no problem because of possibility of massive profits afterwards. It would not be a bad idea to allow the sponsors to sell the electricity directly to bulk consumers i.e. various industrial estates located in Karachi and let the KESC cater the demand of domestic and commercial consumers.
Let one point be very clear that blatant pilferage of electricity is due to high cost. However, those using cost free electricity do not realize that others have to bear the cost, which is becoming prohibitively high.
Ensuring uninterrupted supply of electricity at affordable cost to the industrial consumers can help in boosting GDP growth of the country, alleviating poverty through creation of new employment opportunities and above all enhancing revenue collection.
The average capacity utilization of existing units plunged to around 50 per cent due to load shedding of electricity and gas. Unless capacity utilization touches optimum level, no one should expect creation of new productive facilities.
While talking about potential of Sindh, it is also necessary to talk about precarious law and order situation in Karachi. It is estimated that at an average 2000 persons come to Karachi in search of employment, once established they also bring their families. Therefore, population of the city is growing at above five per cent per annum. This requires construction of housing units, revamping of electricity, gas and water supply, and sewerage disposal systems, public transport and above all saving the city from the booty collectors.
It is often felt that the criminals have attained power before which even the law enforcing agencies feel helpless. The writ of the government can be established when once across the board action is taken against the perpetrators.
It is also necessary to understand the point of views of 'Sindhi Nationalist Parties', which have been talking about the growing sense of deprivation among the masses. The situation can be best understood when one travels across the province. If a few urban cities enjoy many of the basic amenities, people in most of the rural areas are leading lives below the poverty lines. However, some of the quarters attribute this disparity to 'presence of aliens in the province', which deprive the local population of the job opportunities.
One of the reasons is poor literacy rate and the other being an inherent dislike for those who have come and made Sindh their home. All the settlers are making a big contribution towards the development of the province and they in no way usurp the rights of the locals.
Little is being done for the education, healthcare and development of infrastructure. Even in Punjab, the largest by population masses lead highly miserable life. Feudal lords consider the residents of the areas 'slave' because they cannot take any decision against the will of Waderas, Chaudhries, Maliks, Khans and tribal chiefs. Unless this mindset is changed, the rule of elites will continue and miseries of poor will multiply.
One may have all the dislikes for the colonial rule but it is also true that the residents of Sindh are still benefitting from infrastructure built during that era. These include construction of railway lines, barrages and bridges built over mighty River Indus. Pakistan has the largest manmade irrigation system in the world. However, poor maintenance of these facilities has severely impaired working of these facilities; the worst is the condition of Sukkur Barrage and Kotri Bridge, which can be included in the world's construction wonders.
It is said that three of the leading political parties, PPP, MQM and ANP have major representation in the province along with a few nationalist parties. However, rural and urban divide have been widened. Ironically, over the last three years, these parties have remained coalition partners but didn't do nothing to remove the differences and ethnical tensions. One could still hear the demand of Sindhudesh or talks of Sindh Card. Unless the dogmatic mindset is changed, development of Sindh will remain a far cry.