BALOCHISTAN: THE INVESTMENT-STARVED PROVINCE
May 28 - June 3, 2012
Balochistan government needs to create an environment through announcement of attractive incentives for seeking foreign investment particularly in horticulture, livestock, fisheries, and mining in the budget for next fiscal year 2012-13. There are greater investment opportunities in all sectors of provincial economy, but the foreign investors feel reluctant to invest due to the lack of development infrastructure and law and order problem in the province. Balochistan government should take effective measures to improve security situation in the investment-starved province, which direly needs foreign and domestic investment to develop its economic sectors.
There is a lot of potential for development in the livestock and dairy sectors, as Balochistan can earn a substantial amount of income by exporting the products in these sectors to the lucrative markets in the food deficit region: Afghanistan and Central Asia. Pakistan views central Asia as its strategic hinterland.
Livestock contributes approximately Rs20 billion in terms of production of meat, milk, eggs, skin, hides and wool, to the livelihood of over 70 per cent of population in the province of Balochistan. The province has 15 dairy and cattle farms and three sheep and goat farms. Milk contributes 35 percent of the total earning from livestock. As per statistics of 2006 livestock census, the province maintains 2.25 million of cattle, 12.80 million of sheep, 11.78 million of goats and 0.319 million of buffaloes. The government should provide the enabling environment for the subsistence farming community in the province to join the commercial farmers club to harvest the benefits of corporate livestock farming.
The government should provide land and facilities for setting up goat milk cheese processing units in order to motivate the private sector. Steps need to be taken for establishing forward linkages with processing industry and the consumers' market. Similarly, steps should also be taken for backward integration through provision of milk cooling tanks, credit facilities, reliable and cost effective service delivery system and active participation of the local dairy farmers. Steps must be taken to ensure entry of rural subsistence dairy farmers in the milk marketing chain in the province.
Balochistan has tremendous potential for development of horticulture, particularly the fruit farms. Serious efforts need to be directed for bringing about a shift from traditional to a technology based farming system using appropriate agricultural inputs in technologically feasible and economically profitable manner.
The province is known as the country's fruit basket, as it produces millions of tons of fruits annually. The province contributes country's 90 per cent production of grapes, cherry and almonds, 60 per cent of peach, pomegranate, apricot and 34 per cent of apple and 70 per cent of dates.
While apple, apricot, cherry and peach are high delta fruits, the grape, olive, pistachio, and pomegranate are low delta fruits grown in the province. While mango is a tropical fruit, the date palm is sub-tropical fruit plant. The province produces dates of 130 varieties.
Balochistan's tremendous yield potential of high quality deciduous fruits can efficiently be tapped by making investments in establishing crop specific zone and fruit processing units in the province. The key problems barring long-term investment in fruit production include shortage of irrigation water, non-availability of groundwater in highland, lack of marketing infrastructure and facilities like farm to market roads and sale centers, dearth of skilled labor and lack of technical knowledge and expertise. Investments can be made in building cold storage houses and air-conditioned transportation facilities to minimize the risks to spoilage of fruits.
Balochistan makes up 70 per cent of Pakistan's total coastal belt. According to an estimate, 60 species of fish and 10 of shrimps, including the best in the world, are found in the province. The land along coastal belt has enormous potential for development of shrimp farming and processing projects, which can play a vital role in fisheries development in the province. The shrimp farming projects would not only earn huge foreign exchange for the country but also prosper the local fishermen by providing them a constant source of income. The local fishermen have no processing plant for preservation of their catch. The fish cage-culture system in reservoirs and dams needs to be introduced besides introduction of total quality management system for export competitiveness.
The province has an ideal land and suitable conditions for shrimp farming. New hatcheries should be set up in coastal districts like Lasbella and Mekran for shrimp production as viable business - ventures. The provincial government should allot lands in coastal districts of Lasbella and Mekran to private parties interested in promoting shrimp farming. Government should announce incentives for induction of the private sector in this field, as the interested entrepreneurs and investors could play a key role in promoting the shrimp farming in coastal areas purely on the commercial basis.
Balochistan is rich in mineral resources. For its tremendous mineral potential, district Chaghi is known as museum of minerals. The copper-gold deposits at Saindak and Reko Diq in Chaghi have been estimated 78 million tones.
Musharraf administration had proposed establishment of Export Processing Zone (EPZ) and granted 15km area in Chaghi the status of EPZ. The decision had been taken to encourage foreign investment in mining of copper in Balochistan. The province possesses huge reserves of marble in Lasbela, Khuzdar, and Chaghi districts. The onyx marble from Chaghi can meet the international standards and needs if it is processed efficiently. The induction of modern technology in marble sector will increase efficiency of processing units. Investments can be made in quarrying, processing, and trading of marble products.
The province possesses huge reserves of chromite. Export of chromite produced from the province has remained a major source of foreign exchange earnings. The total estimated iron ore reserves are about 273 million tons. The iron ore deposit recently discovered in Dilband area of Mastung district exceeds 200 MT. Investments could be made in setting up beneficiation plants for upgrading the ores of iron and chromite making them physically and chemically suitable for marketing.
The establishment of free trade zone and EPZ in Gwadar port city may open the doors for development of small, medium, and large scale industries generating revenue for the government and providing profitable avenues for both the skilled and non-skilled workforce in Balochistan. The potential investment areas in Gwadar include fish processing, crabs processing, cold storage, ice factories, seawater reverse osmosis desalination plants, shrimp farming, boat building and naval architecture institute, oil storage tankers, ferry service from Karachi-Ormara-Pasni-Gwadar and up to Oman and Dubai.
Investments can also be made in fisheries and aquaculture, port management projects, hotels and restaurants and resorts, date processing, canned food, gravel crush plant, water sports and recreation facilities, palm oil cultivation, marine and automobile repair workshops, cluster for internet service providers, renewable energy, wind, solar and IPPs, clearing and forwarding agency, hospital clinics, re-rolling mills, and warehouses.