THIS special report on the province of Balochistan is meant to look at every aspect of its economy. An effort has been made to separate economics from politics, but since the two are intertwined politics will inevitably crop up here and there.
The government forecasts GDP growth at over seven per cent this year. For Balochistan, that may be too little. Mega projects for the province, that will cost billions of rupees, may also not be enough. To ride the Asian tide that is projected to sweep the future of the global economy, Pakistan will need to put its house in order. A lopsided polarized economy marred by both horizontal and vertical disparities runs the risk of sliding steeply into a political quagmire. Lawlessness and uncertainty are perhaps the greatest enemies of economic growth. No one wants them. It is, therefore, time that the federal government conceded and corrected the anomalies in legal structure to suit peoples’ aspirations and paves the way for broad based, equitable and sustainable development.
Governments have a way of missing the obvious. The Musharraf government, which invested heavily in infrastructural projects, confesses to being perplexed, pointing fingers in all directions for the deteriorating political situation in Balochistan. It, however, willfully or under some compulsions, is not inclined to see through the smokescreen. Instead of announcing confidence-building measures to win over hearts and minds of people of the battered province, it has opted to try the old carrot-and-stick approach to negotiate with a few tribal chiefs. It is said to be ready to sooth raw nerves with compensation. At the same time, it has increased troops deployment in the troubled areas. Political maneuverings by the government may contain the damage. A permanent solution, however, does not seem to be anything but granting the right to the province to control its wealth both over and under its lands. Instead of offering readymade solutions devised in Islamabad, it is absolutely important to understand the economic situation of the province to identify the potentials and the bottlenecks before a well-orchestrated strategy for development can be put into place.
The sketchy material on Balochistan in official publications is insufficient. On the one hand it speaks of the weightage that the development of Balochistan commands in the federal government’s order of priorities. On the other hand, it highlights the need to conduct studies to fill in the information gap.
In stark contrast to the robust economic indicators of the country, Balochistan cuts a sorry picture. The agriculture, manufacturing and services sectors, according to the second quarterly report of the SBP released in March 2005, grew at rates above targets over the last six months. There is no firm data but in all probability the performance of same sectors in Balochistan was not even close to the country’s average. The fact is that Balochistan’s economy lags far behind those of Sindh or Punjab where the agriculture, industry, commerce and services sectors are way ahead. Except perhaps for trade, Balochistan shows very little economic activity. The province is dependent on federal grants even for its recurring expenditure.
The level of capital formation is abysmal in the province. There are no more than 22 small industrial plants in and around Quetta — a few flour mills that serve the market of Afghanistan, a small steel re-rolling mill, animal feed plants, etc. The huge Pak-Iran Textile Mills at Uthal and Quetta are not functional. The rest of the industrial base is in Lasbella district, which is just an hour’s drive from Karachi. For all practical purposes the industrial estates of Lasbela serve as an extension of the industrial zones of Karachi. It is therefore natural that investors are either from Sindh or Punjab. Skilled manpower and services providers are also predominantly from Sindh. The blessings accrue obviously to those engaged there. The benefits to the people of Balochistan are marginal and even the provincial government does not get much as industry in the Uthal, Winder and Hub industrial zones mainly run on tax concessions.
During a short visit to the province, this writer heard most people say that the prime reason for industrial underdevelopment in Balochistan was the economic environment that was not conducive. “People prefer trade over industry for both convenience and margin of profit”, said a seasoned businessman and ex-president of the Balochistan Chamber of Commerce and Industry, Tahir Ahmad Khalifa. “Because of the backwardness of the province, for most projects, raw material has to be brought from far. The produce has then to be marketed in other provinces involving a considerable transportation cost. This raises the cost of production and renders the whole exercise unviable”, he said. “Business is a peace time activity and rule of law is a precondition for industrial promotion. Unfortunately here the physical infrastructure is pathetic, the social infrastructure is crumbling and to top it all the writ of the government is weak with deteriorating law and order. Who in his right mind would like to lock his capital in a long-term project in such a situation?” Kalifa asked. He also felt that the government was promoting trade at the cost of industry in the country.
Shaikh Abdul Aziz, President, Balochistan Chamber of Commerce and Industry (BCCI), regretted lack of support from the government. “Undertaking industrial development is more difficult in this province than the rest of the country. To persuade the private sector to take initiatives, the government needs to do more”, he said. He made a case for concessions and tax relief for people ready to take a plunge in the troubled province.
Trading, little formal and more informal, is the mainstay of whatever the province has in the name of an economy. It is a full-blown activity with big stakes. The activity is predominantly manned and controlled by people from NWFP. At least that was the impression that one got in Quetta. Many markets are owned by Afghans who purchased them from the locals in the mid-1980s. Those are almost always run by people other than Baloch. Those shops have an aura of their own, different from the urban market places in other cities. Quetta is a city of shops. Scores of markets are stacked to the top with all kinds of goods. You name it, they have it.
Two shopkeepers in Shabnum Market, Abdul Rauf and Amanuddin offered an explanation. “The middle class in Quetta is not big enough, neither are they rich enough to support such a huge market on their own. People from other provinces come over to shop here as well. Besides families of army personnel frequent these markets all through the year”, he said. Quetta, as everyone knows, houses many key military establishments.
Smuggling is the name of the game. “You can get as much Iranian petrol, woollies, tyres, blankets, electronic gadgets and so on in Balochistan as you want. Oil from Iran reaches even deeper into Punjab. No less than 80 per cent of all alcohol crosses the border in Balochistan” confided an MPA, who wished not to be named. “There are some 5000 checkposts of the Frontier Constabulary in the province. With such a close watch smuggling is not possible without the involvement of law enforcers. There is an officer roughly per 100 persons in Balochistan”, Dr Ishaq Baloch of the National Party told Dawn. Another remarkable feature was noted in the presence of big cars without number plates not only in the remoter areas but also in Quetta. Why are they allowed to move about freely is anybody’s guess.
Corruption is rampant and no sector is spared. Faraz Sheikh, a representative of a foreign law firm, wanted to hire a few young people from Quetta. He had to drop the idea after interviewing young graduates who couldnt comprehend a simple statement in English. He thought that their degrees were fake. But it was sometimes afterwards that he found out that the problem was not with papers but with the system. “Those who can afford it prefer to educate their children in institutions in Sindh and Punjab as the education sector is a shambles in Quetta”, Amina, a settler in Quetta and a mother of two teenagers, told Dawn.
Conditions in the health sector were found to be equally pitiable. “People cannot afford hospitals and doctors so they take their loved ones to quacks. You cannot just let your sick die on their own”, Naila Qadri, member of the central committee of the BNM, told Dawn. Naila insisted that the real issue was that of the rights of the people and not that of some relief from the centre.
Courts function but most disputes are resolved out of court. It was astounding to note how a meeting of tribal elders in a hotel lobby in broad daylight actually settled a case of abduction and murder among themselves . “There is little scope for modern law firms in this province in the near future as those who matter mostly opt to stay out of the legal structure and courts”, a law practitioner told Dawn.
In reply to a question as to why even educated Baloch had failed to utilize the easy credit policy to their advantage, a young articulate senator from the province blamed the tense political environment for keeping locals preoccupied and out of the country’s development cycle. “We are a nation under siege”, said Senator Sanaullah Baloch. “Our history is a history of repression and exploitation, we were never facilitated. In fact there are many examples when proposals for putting up industrial projects were shot down by the relevant agencies” he said. “This region was never treated with respect. It was treated as an area of strategic relevance habitated by minions. Its development, therefore, has almost always been led by military considerations. In fact the development of this province was dealt with by the ministry of defence and not by the ministry of finance or economic planning”, says the angry senator. “Quetta got gas in 1984, 32 years after it was discovered, when General Zia decided to establish a Corps Commander’s office in the city”, he said. “Is this fair?” he asked.
But not everyone was unhappy with the present rulers, some even outside the fold of PML-Q. An enlightened ex-student leader was a bigger fan of General Musharraf than even his own party men. “This man has done for Balochistan more in the last five years than what was accomplished for the province for over 50 years. Completion of the coastal highway in three years is a miracle. The multi-million Gwadar Port is in progress. Saindak project that was closed and could not be revived even during democratic dispensations for 20 years was made functional with the help of our Chinese friends. There are many other projects that if not interrupted will change the socio-economic scenario of the province irreversibly”, he said.
National Assembly Deputy Speaker Muhammad Aslam Bhootani, a vocal supporter of the government, interpret recent tensions in Balochistan as ramifications of a clash between pro and anti development forces. “These tribal chiefs are instigating people against the government for they fear that development will eventually change the mindset which will endanger their position of total control in their areas,” he stressed. He refused to name names but argued that a lot of money was pouring in to materially support insurgents from countries that feel threatened by Balochistan’s potential.
Provincial Minister for Fisheries Asghar Rind, Minister for Livestock Abdul Qudoos Bezinjo, Minister for Excise Amanullah Notazai and MPA Mir Abdul Rauf Rind believe that the agitation by the four nationalist parties does not reflect the aspirations of the ordinary Baloch, who they said are better off and therefore happier with the Musharraf government. “The fishing folks of the coastal belt are earning much better because of the Gwadar coastal highway. They used to sell their catch to middlemen, but now their representatives can approach a bigger market in Karachi and sell fish at premium prices. Can this community be against the highway?” Asghar said by way of an example. These members of Balochistan assembly argued that the opposition to the Musharraf government was not issue based but for the sake of opposition alone. “On several occasions the government tried to involve all major political parties including National Party, Balochistan National Party(Mengal), Haq Tawar (Mari) and the Jamhoori Watan Party (Bugti) to sit down for a serious dialogue over the mega projects issue in Balochistan, but failed for lack of interest by the leaders of these parties, he argues.
Maulana Abdul Wasi, Senior Minister for Planning and Development, had quite radical views on the issue of resource sharing formula between the provinces and the centre and the provinces. “What can we do with an empty kitty”, Maulana asked. “No matter how much we plan, development can only materialize in Balochistan when it has enough resources to support such an effort”, he says, adding: “There is a need to re-evaluate and rationalize resource distribution formula for more balanced development in the country”.
When confronted on the issue of mega projects, the nationalists maintain that those projects were not meant to benefit locals but would be used to exploit the wealth of the province. “We are against controlled development as such an exercise runs against the interests of our people. We know better what we need. Can we be blamed for mistrusting the federal authorities? Let them change their tone, let them recast the concurrent list, let them give us power, let them restrain themselves from interfering in our affairs unnecessarily, let them stop using our land for army cantonments and airstrips and see how quickly we develop”, Senator Sanaullah asserted.
There was suspicion in many minds regarding Gwadar Port as well. “These fancy projects attract the big and the mighty in huge numbers. Our people are backward and simple. These big sharks will drive them out of their own land and turn them into Red Indians”, Dr Ishaq Baloch feared. “Much before the announcement of Gwadar project people who had access to classified information in Islamabad had started buying land there. Land bought then is now worth billions. Is this not exploitation of locals? Are these big people not cashing in on the ignorance of our people”, Senator Sanaullah said. “The international practice is that ports are manned and managed by the city administration. At Gwadar the district government is not allowed even to manage real estate”, complained a National Party leader. The nazim of District Gwadar belongs to the National Party.
To allay the fears of the people, the government should consider providing certain legal safeguards to local people. In many countries where locals are in a disadvantageous position compared to immigrants, laws are introduced to protect them against undue intrusion.
For disparities within the province, they may not be as stark as in other parts of the country but are definitely visible. A common person of Balochistan is deprived, depressed and insecure. Backwardness, poor law and order, a crumbling social infrastructure, rising property prices and limited employment opportunities are forcing many to live a sub-human life. However, for those who make it to the secretariat or the assembly in capacity of a civil servant or public representative, the bounties begin to shower down, at least, so it seems. The courtyard of the Balochistan Secretariat looks more like an open-air showroom of heavy-duty four wheelers of all brands. A colleague disclosed that the lifestyle of those who make it big in Balochistan matches their love for big shiny jeeps.
“It is a sad situation for the industry and for the country. If the Balochistan scenario fails to improve, Pakistan might again miss an opportunity to make up for lost time and fail to progress at a pace matching those of other emerging regional economic powers”, Zahid Zaheer, Secretary, Overseas Chamber of Commerce and Industry, said when contacted to comment on the situation. “Our domestic investor is still reluctant to make long-term investment, the Balochistan situation has scared him even more. And where the local investor is shaky there is no chance for foreign investor to opt to invest here”, he said. “The province has great potential especially in the energy sector, a sector vital for any future industrial development” he said.
There is little doubt that the situation in Balochistan is complex and the position of the government is not enviable. Any wrong move by the government could initiate a negative spiral and can cost more than the country can afford. The people of Balochistan and the forces of development in the country hope that the government will resolve the situation politically and abstain from strong-arm tactics. The province has waited too long. By giving more rights to the provinces the government can bring the federating units closer as partners of development.
