Massive untapped wealth
SYED FAZL-E-HAIDER, Quetta
July 09 - 15, 2007
The national income and Human Development Index (HDI) are the important indicators to assess the level of development of a country. It is a fact that whether measured in terms of provincial income or HDI, Balochistan is the least developed province of the country.
Inhabited by five per cent of the country's population, placed on the political periphery and deprived of its autonomy, the province has been heavily dependent on the federal government for its financial needs and obligations.
Sparsely populated and stretching over 44 per cent of the country's total area, Balochistan is the most backward and least developed province. It generates a paltry sum of Rs1.5 billion revenue from its own resources.
During first six months of the fiscal year 2006-07, Balochistan's interest repayments had exceeded Rs250 million per month taking its overdraft to the highest ever Rs16 billion. The provincial government was forced to freeze its current expenditure and development program almost at the last year level. The province during this critical period was forced to spend Rs3 billion per year in the shape of interest payments. It was paying 22 percent interest annually on Cash Development Loan (CDL).
Balochistan government claims that its loan strategy has changed the Rs9.3 billion overdraft into soft-term loan. It obtained soft loan on 3.7 per cent from the Asian Development Bank to get rid of hard loans pending against it. After paying CDL, Balochistan has saved Rs1.5 billion annually that it was paying as interest on CDL.
"We have brought improvements in Balochistan finances', said Mehfooz Ali Khan, the Balochistan's finance secretary. He said, the financial discipline of the provincial government is aimed at increasing the resources and benefiting from the limited revenue of the province.
He told this scribe that the province had managed to increase its small revenue base by more than 100 per cent in the last three years to Rs2.8 billion from Rs1.3 billion. He said, "The province due to its strategic location has comparative advantage in the region. It has tremendous potential in all economic sectors, which has largely been untapped. It has 770km long coastal belt and a strategic location of immense geo-economic importance. There is immense potential in mining, agriculture, livestock and fisheries, he added.
Balochistan is a water-starved and land-rich region. Agriculture is the mainstay of provincial economy, as over 75 per cent of the population lives in rural areas. The crops contribute about 62 percent of gross farms income. This sector employs 67 percent of Balochistan's total work force.
Naseerabad, Jafarabad, Dera Murad Jamali and Usta Mohammed and many areas of central Balochistan are considered agricultural regions. Except Naseerabad district, there is no perennial system of irrigation. The area depends on rain, Karezat and tube-wells for irrigation. About 11.77 million acres of land is still lying arid, barren and uncultivated.
Agricultural development is linked to the development of water resources. The federal government is spending Rs5 billion for the construction of pucca watercourses to help irrigated orchards of more than half a million acres.
Balochistan is a pastoral economy. Its livestock contributes 20 per cent to provincial GDP. It is the primary source of living for about 80 percent of the population. The provincial share in the country's total livestock population is stated to be about 40 per cent. According to one estimate, more than 30 million herds of livestock in the province include 10.841 million sheep, 9.369 million goats, 1.341 million cattle, 4.964 million poultry and 0.750 million other livestock. About 120,000 livestock producers or flock owners earn their living from raising livestock .
Leather, carpet and pharmaceutical industry are the main consumers of livestock products. The province caters to the needs and demands of leather and carpet industries in Pakistan by sustaining the supply of hide and skins and wool to these sectors.
The province has 770-KM long coastal belt along the Arabian Sea, which links Lasbela and Gwadar districts. The coastline is 70 per cent of country's total coastal belt. It has huge potential for development of fisheries, tourism and seaports. As the diversity of marine life indicates, the coastline is one of the most productive marine ecosystem of the world. According to an estimate, 60 species of fish and 10 of shrimps, including the best in the world, are found here. The province produces 200,000 tons of fish per year, of which 80,000 tons are caught by trawlers from Sindh.
The enormous fish and seafood potential is yet to be fully tapped. In real sense, fishing has been confined to merely on-shore waters due to lack of infrastructure facilities. In the absence of quality control, fresh and good quality fish are denied full access to national and international markets on a scale made possible by modernization of the fishing industry.
The local fishermen have no processing plant for preservation of their catch. They still follow the obsolete methods of fishing. They are unaware of latest fishing technologies and still use old and smaller vessels. The expansion of fishing fleet, fish processing, fishing training centre, supply of marine engines, boat building and provision of landing jetties offer immense scope for investment. .
Shrimp farming is an important economic activity, which can develop unproductive salty coastal areas of the province. The land along coastal belt has enormous potential for development of shrimp farming and processing projects.
Balochistan is known for its tremendous mineral potential. A large number of metallic and non-metallic minerals have been discovered in the province. Mineral deposits include copper, iron, zinc, lead, coal, barite, fluorite, gypsum/anhydrite, limestone/dolomite, magnesite, chromite, marble and sulphur.
The copper-gold deposits at Saindak and Reko Diq in Chagai district have been estimated 78 million tones. It possesses huge reserves of marble in Lasbela, Khuzdar and Chagai districts. The estimated reserves of all coal fields in the province are 196m tonnes. It is expected the country would soon be an important producer and exporter of zinc & lead after development of thirty prospects of Zinc-Lead mineralizations in the Lasbela and Khuzdar districts and mining of significant deposits of these minerals at Gunga and Surmai. The total estimated iron ore reserves are about 273 million tones in Balochistan.
Rich in energy resources, Balochistan produces more than 40 per cent of the country's primary energy in the form of natural gas, coal and electricity. Geological surveys indicate estimated reserves of trillions cubic feet of gas and billions barrels of oil during offshore exploration. Any discovery of a huge oil reserve may change the country's fortune.
Marri-Bugti tribal areas are rich in oil and gas resources. Other districts- Sunny Shoran, Kharan, Chaghi, Lasbela, Bolan, Mekran and coastal regions have not been explored yet. Reports indicate reserves of oil and gas in Kalat, Kharan, Kohlu and Lasbela districts.
Under its ongoing exploratory program, the Oil and Gas Development Company Limited (OGDCL) is following an aggressive exploration strategy and plans to drill 100 exploratory wells in the country by the end of June 2008. The company has also joined hands with a French company, TOTAL to explore in off-shore blocks G&H comprising 15,000 sq.km area. No doubt, granting Petroleum exploration licenses to international companies would be a wise policy in the given situation. At present, Pakistan produces 2.4 billion cubic feet of natural gas a day against demand of 3.4 billion cubic feet. In view of the growing demand of 7 to 8 percent a year, a shortfall of 600 million cubic feet (mcf) is expected by 2010.
The province is known as fruit basket of Pakistan. It produces many kinds of fruits. Its share in the country's production of grapes, cherry and almonds is 90 per cent. It contributes 60 per cent of the output of peach, pomegranate, apricot; 34per cent of apple and 70 per cent of dates.
The apples are popular all over the world for their taste and quality and a good variety. About 0.3 million tones of best varieties of apple are produced annually.
With date production of 130 varieties, the province can earn foreign exchange through exports. Mekran provides about 4,25,000 tones of dates annually, but the province has no share in national export of dates. Investment opportunities exist in date processing and apple storage projects in Balochistan.
Apricot and plum are high delta fruits, which are grown in upland Balochistan. Grape is a low delta crop and may be grown in all types of climates and soils. The most popular commercial varieties grown in the province include Sundrakhani, Haita and Kashmishi.
Though Balochistan lacks a sound industrial base, Sui gas field in Bugti tribal area (since its discovery in 1952) as an indigenous energy resource has been a source of energy for the country's industry, power generation, agriculture, commerce and household needs.
Balochistan possesses enormous industrial potential in key sectors- agriculture, livestock, fisheries and minerals. These provide the base for setting up a large number of agro-, livestock-, fisheries- and mineral-based industries. The major constraints in the industrial development have been the lack or the absence of infrastructure, scattered nature of population, vastness of area, dearth of skilled labour, social structure, tribal feuds and lack of marketing facilities.
The industries are mainly concentrated in Hub, Winder, Gadani and Quetta in Balochistan. The Lasbella Industrial Development Authority (LIDA) was established in 1984 to provide facilities to the industrial zones in Hub, Winder, Gaddani and Uthal areas. Marble city in Gaddani has recently been set up and the first industrial unit there has come into operation. The first phase of the Quetta Industrial and Trading Estate, the 700-acre project, has been completed.
Pakistan's main ship-breaking yard is located at Gaddani in Lasbela district. It is an important centre of economic activity providing indirect support countrywide to a number of industries like re-rolling mills, welding workshops and furniture shops, etc. Since September 2001 some very large crude oil tankers have sailed to the scrapping beach of Gaddani.
Syed Fazl-e-Haider, email@example.com, is a Quetta-based development analyst in Pakistan. He is the author of six books, including The Economic Development of Balochistan, published in May 2004.