BALOCHISTAN: EMERGING HUB OF ECONOMIC ACTIVITIES

The nationalists groups must try to understand that constant rift with the federation and poor law and order situation could not help eradicating poverty from the province

SHABBIR H. KAZMI
July 09 - 15, 2007

Internationally, a few business ventures of Balochistan have become symbol of Pakistan's identity. These include apples and cherries, Sui gas, Hub Power Company, Saindak gold and copper project and the latest being Gwadar seaport. Media often carries stories of conflict between people of Balochistan and the federation. The fact remains that the province enjoys enormous potential, which has not been utilized for the betterment of the people.

By virtue of its geo-strategic location and huge natural resources, Balochistan presents a veritable economic bonanza. It constitutes about 45% of Pakistan's geographical territory containing 770 km long coastline. The subsoil holds a substantial portion of the energy and mineral resources and its coast provides the country with an exclusive economic zone potentially rich in oil, gas, and minerals spread over 180,000 sq km.

Majority of the energy-starved country's natural gas facilities are located in the province, comprising of about 20 trillion cubic feet natural gas reserves and six trillion barrels of oil reserves, on and off-shore. Its natural gas contribution to the economy is crucial. The Sui gas field produces nearly 45% of the country's total gas output. Other natural gas fields include Uch, Pirkoh, Loti, Gundran and Zarghoon near Quetta. It also holds large quantities of coal, gold, copper, silver, platinum, aluminum, and, above all, uranium and is a potential transit zone for a pipeline transporting natural gas from Iran and Turkmenistan to India.

Gwadar port is situated just 624 nautical kms to the east of Straits of Hormuz through which 40% of the world's oil passes. The strategically located Gwadar port in southern Balochistan offers the shortest access to the Arabian Sea for Western China. Western China has become the hub of the massive development with a phenomenal investment touching US$ 100 billion, which will be fuelled by energy supplies. China wants its energy shipments from Central Asia and the Middle East, especially (liquefied) natural gas from Turkmenistan, Qatar and Kuwait, to be sent by tankers to Gwadar and then piped or trucked to western China through Karakorum Highway.

Balochistan has a varied climate from the sea coast in the South to plateaus 8000 feet above the sea level in the North-east. Five distinct ecological zones have traditionally been described in the province, based on varying agro-ecological factors. Sixty-five different crops are successfully grown during both Rabi and Kharif seasons, which contributes to the diversity of agriculture in Balochistan.

Industry contributes around 10% to the Provincial GDP, and together with mining employs 3.5% of the labour force. Additionally, a number of cottage industrial units spread all over Balochistan, mainly in the field of handicrafts, embroidery, wool and leather products.

One of factors hindering economic growth of the province is inadequate supply of electricity. The situation has been persistently improving in the adjoining areas of Hub, due to proximity to Hub power plant. However, supply has been concentrated in the urban centers and less than 25% of the rural population has access to electricity. On top of his supply is unreliable and often interrupted.

FRUITS

Although the total cropped area of Balochistan is 3.8% of the total cropped area of the country, yet the province is the largest contributor to the national production of Apples, Peaches, Grapes, Pomegranates, Dates, Almonds and Plums. Most probably per acre return to the grower are highest in the world for Apple, Cherry and Almonds. Even without fertilizers per hectare yield of in the rain-fed area is highest in the country. Balochistan contributes about 45% of the total fruit production of Pakistan. The warmer parts like Makran, Kharan, Noshki and Khuzdar are known for the production of quality Dates.

Balochistan has the largest fruit orchids in Pakistan. More than one million ton fruits are produced from fruit farms spread over quarter of a million hectares annually. Balochistan's share in country's fruit area and production is more than 30% and about 18%, respectively.

The production of deciduous fruits (particularly apple) in Balochistan has a special significance among other fruit growing areas. This is because the environmental conditions are most suitable for the production of apple. Apple is also the largest planted fruit and the second most produced fruit, after dates, in the province of Balochistan.

Apples are grown in highlands of Balochistan and cover hundred thousand hectares with a production of 225,000 tones annually. The Tur-Kulu (Red Delicious) and Shin-Kulu (Golden Delicious) are the famous varieties for their very attractive color and taste throughout Pakistan. Therefore, these varieties fetch relatively high prices in the markets of Sindh, Punjab and NWFP.

In Balochistan, the share of apple is 42% in the total area under fruits and 23% in terms of total fruit production. Pishin with Killa Abdullah, Mastung and Zhob are the main apple producing districts. An apple varietal survey in Pishin and Killa Saifullah districts revealed that Tur Kulu, Shin Kulu and Kaja are major varieties occupying 50, 25 and 10 percent of total apple orchard area, respectively. These estimates have some meanings when considered from post harvest loss management point of view.

For year round availability of this fruit, apple must be stored at 32 degrees and relative humidity of 90%. Considering the geographical spread of Pakistan, marketing of this fruit through out the country including Azad & Jammu Kashmir in storage requirements to maintain the quality of fruit till it reaches the consumers, careful handling of this fruit at all stages is very important. This will control seasonal price fluctuations and ensure availability of good quality fruit to the consumers for a relatively long duration at affordable prices because the losses during the transportation are ultimately transferred to the consumers in the form of poor quality and high prices. Moreover, unduly high prices also result in reducing the demand which leaves less incentive for the producers to increase production because the benefits of high prices are also not passed on to the farmers as the commodity has already left the farm gate.

Balochistan has the poorest communication and infrastructure network. It is poorly endowed with road infrastructure, marketing and appropriate storage facilities. This has resulted in higher post harvest and transportation losses. Generally speaking the longer the distance and time involved from the production to the consumption of fruits, there are more chances of loss of all kind to occur.

A substantial quantity of production is subjected to post-harvest losses at various stages of marketing. The quantum of loss is influenced by several factors like method of harvesting, packing and transportation etc. During distribution and marketing, significant losses are incurred which range from a slight to total spoilage. Post harvest losses may occur at any point in the marketing process, from the initial harvest to ultimate distribution to the consumers.

The causes of losses are many but the causes are: biological and microbial (pests and diseases); chemical and biochemical (contamination with pesticides and other chemicals, toxins and bad-flavour due to diseases); injuries, cuts, bruises, abrasions, peeling and trimming etc; environmental (overheating, chilling, freezing, dehydration), and physiological (sprouting, rooting, and transpiration). The secondary causes include inadequate curing, improper storage, inappropriate transportation, inadequate production and harvest planning etc.

Flavour is one of the most important aspects of quality which develops under normal conditions. Some horticultural products are conditioned by exposing them to certain temperatures and conditions. Post harvest deterioration of the produce is due to water loss, senescence, and development of physiological disorders and fungal attack. While refrigeration is the principal means of retarding this deterioration, and external atmosphere control is finding wider application, certain ancillary treatments are of high value. Waxing of the fruit surface adds shine and reduces water loss and rate of transpiration, thus improving external appearance and extending storage life.

Post-harvest technology of horticultural perishables is comparatively a new field in the agriculture sector of Pakistan. Its economic and nutritional importance cannot be ignored as depending upon commodity more or less 30 per cent of the produce is wasted during its transport from farm-gate to consumer. Horticultural crops are relatively more valuable in terms of price than the field crops. Therefore, these losses cost to the nation in billions of rupees which, could be avoided and can result in increasing the availability of horticultural commodities by adopting appropriate post-harvest technologies.

Investment in development and transfer of post-harvest technologies is of particular importance for Balochistan where filed crops production sector is dismal as compared to other provinces of the country. Apart from creating awareness, there is a need to impart training to the stakeholders for improved operations for harvesting, post-harvest handling in the orchard, post-harvest treatments, grading, packing, storage, transport and marketing etc.

 

A good amount of research and development work has been carried out in the horticultural advanced countries in this regard. No doubt, the concerted efforts should be made for transfer of technology, but it also requires trained manpower in this specialized field as well as creating viable receiving-end by continuous awareness campaigns as a national cause.

SAINDAK

Saindak Copper and Gold Mine started commercial production after years of interruption with the help of a well-known Chinese company, China Metallurgical Construction Corporation (MCC).A grand ceremony was held in the western remote border area to inaugurate the project. Chinese Prime Minister sent a message to congratulate the resumption of copper production at the Saindak mine. It said, "China will continue to take concrete steps together with the Pakistani government and people to bring China-Pakistan traditional friendship and mutually beneficial cooperation to a new high. In his speech, Chinese Ambassador said the Chinese government attaches great importance to developing Sino-Pakistan relationship.

The Saindak mine, located near Pakistan Iran bordering area, is some 650 kilometers west of Quetta, capital of Balochistan province. It is the first nonferrous mineral development complex in Pakistan with the assistance of MCC, which enjoys a comprehensive advantage of the industry. MCC started to build the project in once Pakistan was unable to continue work due to financial constraint. The Saindak project creating new job opportunities for the local people has the capability to produce 16,000 tons of blister copper, 1.5 tons of gold and 3 tons of silver annually for a period of 20 years.

The Chinese, simultaneously the producers and buyers of Saindak copper, are pioneers in transferring technology in metal mining, mainly in copper. They face few problems since they built the whole plant. They are committed to train Pakistanis by offering them on-the-job training facilities. The Chinese companies prefer to import copper from Chaghi, which is currently meeting the Chinese demand.

Since August 2003, a subsidiary of MCC has been operating in the Saindak project, with an initial investment of US$ 26 million, and it produced 18,000 tons of blister copper by September 2004. Such a high rate of production may end the life of the mine, previously estimated at 19 years, before the 10-year lease of the Chinese firm expires if excessive mining goes unchecked.

China's demand for copper has increased greatly because of rapid economic development and big expansion of infrastructure construction. According to one estimate, China's appetite in the past decade grew by more than 9% annually. In 2003, China consumed 2.5 million tons of copper, accounting for 16.5% of the world's total, ranking second after the United States. It was because of the strong demand from China that Chile's copper-export income doubled in October 2004 from the same month in 2003 to US$1.4 billion.

China is the biggest buyer for Pakistani copper. At one time the Saindak project produced about US$ 70 million worth of copper and contributed about US$ 10 million to export and royalty earnings. It was earlier estimated that the project would generate annual revenue of about US$65 million. Copper exports from Saindak began in 2004 when Pakistan exported copper worth more than US$30 million to China during four months, from July to October.

According to some concerned groups, Pakistan is also bearing the environmental costs of the projects, as the production of copper is a long and dangerous process. The smelting of the copper ore emits arsenic and carbon monoxide, which pollutes the air and water near the mines. The copper is heated at high temperatures several times before the metal is ready for export. The impact of copper production on the country's environment is bound to grow at an alarming rate during the remaining years of the lease contract. Most threatened is the atmosphere in the immediate vicinity of the copper mine.

WAY FORWARD

Around 70% of Balochistan area is still under tribal control and the government involvement is very low. During last few years the province has witnessed initiation of many mega projects these include Saindak gold/copper project, Gwadar deep sea project and Makran coastal highway. However, private sector involvement remains low mainly due the tribal society.

The government has to take initiative to create an environment conducive for the private sector. The province has an elaborate manufacturing infrastructure, which includes Hub, Winder, Gadani and Uthal industrial estates. To facilitate establishment of new units in these estates various incentives should be provided. These include duty exemption on plant and machinery, improvement of infrastructure and restoration of law and order in the province.

The economy of Balochistan, mainly comprises of agriculture, mining livestock, and fisheries. However, it is regrettable that the province hardly benefit from these resources. For example marble, onyx and granite queries are located in Balochistan, but the mine owner hardly benefit because cutting, polishing etc. is done mostly in other parts of the country. The same is also true about fisheries the catch from Pasni, Ormara, Gwadar, and Jivini goes to Karachi, where it is processed and then exported.

In addition to the economic problems, there are a number of socio-economic issues, i.e. education, healthcare, which are continuously multiplying. Ironically, the federal and provincial governments have not been able to address the real issues, which give politicians, particularly the nationalist groups to embark upon anti federation movements. While the masses do not benefit from such movements, Pakistan's perception is distorted.

According to some analysts one of the reasons for the poor economic conditions of the province is lack of business leadership in Balochistan. Similarly, the government offices should facilitate the business community. The classification of people into locals and aliens creates a lot of problems. The mining, agriculture and industries ministries must have forward looking professional. The political leaders and provincial government officials must come out from the isolation of the tribal thinking.

The nationalists groups must try to understand that constant rift with the federation and poor law and order situation could not help in poverty alleviation. The supply of gas from Sui and other gas fields has been completely suspended a number of times due to attacks by local hardcore idealists. They often target water pipelines, power transmission and distribution network and gas installations. The violence not only results in loss of human life and assets but also discourages foreign investment.

It is on record that often Balochistan has not benefited from its own natural resources. The first natural gas discovery was in Sui in 1953. Gas was supplied many areas within few years of discovery but Quetta, the provincial capital had to wait till 1986 for its share of the gas.

It is also complaint by the nationalist groups that although natural gas from Balochistan still enjoys lion's share in the indigenous production of gas the province consumes around 5% of its output. They also say that the natural gas is being used in the country as feedstock for the production of fertilizer, petrochemicals and power plant but not a single unit has been established in the province. On top of this the tariff offered to gas fields in Balochistan is much lower compared to the tariff being paid to gas fields located in other parts of the country.