BALOCHISTAN'S ECONOMIC MESS
Sep 13 - 26, 2010
Flooding and uncertain security is continuously taking toll on Balochistan's economy, which is already in recession due to economic slowdown. Deterioration of security and the devastating floods have aggravated the economic problems in the least developed province. Tori embankment breach has inundated Jaffarabad district that destroyed the green belt vital to pastoral economy of the province, which largely depends on it for food grains. Livestock, the major sector of provincial economy has taken a big hit.
The economic and humanitarian crisis is deepening in the province. Over 60,000 flood survivors in five districts of eastern Balochistan including Jhal Magsi, Jaffarabad, Nasirabad, Sibi and Bolan, are suffering from epidemics particularly gastroenteritis and malaria after consumption of contaminated floodwaters. Agriculture losses due to floods are yet to be calculated.
The provincial government has blatantly failed to protect lives and properties of the citizens, who are being targeted and killed in the name of so-called struggle for an independent Balochistan. While the provincial governor argues that not the Aghaz-i-Haqooq-i-Balochistan package but complete provincial autonomy is the solution to the province's problems, the Chief Minister sees the link between the incidents of target killing and bomb blasts in the province and the ongoing war in Afghanistan. The question of the questions is when and how the federal government will implement its proposed package and deliver in the prevailing security situation of Balochistan?
The security expenditures have been on the rise during past five years, as the province is facing an insurgency of low intensity. Investors' concerns have been aggravated over the past many years due to law and order problem in the province. Many foreign firms in mineral and oil and gas exploration have left the province due to security reasons. Today, the worsening security is the gravest risk to the provincial economy, as the contractors and investors are unwilling to launch new projects or complete the ongoing development schemes in the restive province.
Law and order problem has affected each and every sector of the provincial economy putting most of the development projects in cold storage. The fate of mega development projects launched under former government is uncertain due to the security concerns. Besides operational issues like issue of land for free zone, security is the core issue that threatens the viability of Gwadar port project on southwest coast of Pakistan. Higher costs of doing business in Gwadar have turned the country's prize port into a white elephant. The port still lacks road and rail connectivity and its usage has so far been restricted to bulk cargo. The port has so far not witnessed the arrival of any commercial vessel in the last three years. In fact, Gwadar is yet to shine despite all the potential of becoming a major port in the region. The authorities in Islamabad have failed to hand over 584 acres of land under possession of Pakistan Navy for construction of free zone to the operator- Port of Singapore Authority (PSA).
Even if all the issues are settled between port operators and the government, will Gwadar port project make any progress in the prevailing security environment of the province? Some people say that law and order problem forced China to shelve its coastal oil refinery project in Gwadar, as the project had been deleted from the list of financial development program for current financial year 2009-10 agreed between the two countries.
Federal government's initiative- Balochistan Package- to appease the restive province and bring the Baloch dissidents into national mainstream will not work until peace is restored in the province. Under the package, the government proposed a series of constitutional reforms, economic measures and administrative steps to assuage the hurt feelings of the Baloch people. The package pledges more employment opportunities for local people, payment of gas royalty to the province, return of political leaders in exile except facing terrorism cases, commission on missing Baloch persons, suspension of construction of military cantonments in the province, review the role of federal agencies in the province, judicial inquiry into allotment of land in southern port city Gwadar, and inquiry into the killing of veteran Baloch nationalist leader Nawab Akbar Bugti, who had been killed in military action in August 2006. Baloch leaders have rejected the package and asked the government to take practical steps, instead of making pledges.
The government can materialise no plan, pledge or proposal under Balochistan package until peace and order is restored in the province. The incidents of target killings and attacks on police and personnel of other security agencies and bomb blasts have become a routine in the province. The government has proposed allocation of Rs31 billion for launching 36 projects in the province under the package.
The former Pervez Musharraf administration in Islamabad preferred to bear higher costs of military operation in terms of collateral damage, destruction of infrastructure and maintaining law and order, but it did not seriously opt and strive for political solution of Balochistan crisis.
Present government made a departure from the past practice of training guns on those demanding their rights. For instance, the province will receive Rs1.817 billion additional revenue on account of gas development surcharge (GDS) in the seventh National Finance Commission (NFC) award based on the weighted average wellhead gas price in the last financial year. In the new formula, the share of Balochistan has been increased from 20.2 percent to 28.7 percent. Though the present government has addressed the genuine grievances of the province against the centre, yet the real test of the government's sincerity will depend on implementation of the package.
Present government could not appease the insurgents in past two years. No clear-cut strategy about continuing or calling a halt to military operation has come from the government. The government seems in dilemma over the issue. Today, security is the key issue related to implementing any development agenda for Balochistan. The law and order is continuously worsening.
Federal minister for interior Rehman Malik has indicated that force would be used to improve law and order in the province. Is the province going to witness another military operation?
Experts see a relationship between poor economic performance and the rise of extremism and resort to insurgency. The areas of Pakistan in which insurgency has taken hold have seriously lagged behind those which have fared better in economic terms.
Insurgency-hit Balochistan, the largest province in terms of area and possibly also the richest once its energy and mineral resources are fully explored and begin to be exploited, is the least dense of the country's provinces.