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KP’s growth strategy

Updated September 07, 2015

THE Khyber Pakhtunkhwa government has devised a strategy to push up the annual economic growth to 7.5pc within the next three years from the current rate of 4.5pc.

The Khyber Pakhtunkhwa Economic Growth Strategy 2015-18, has recently been approved by the provincial cabinet entailing long and short- term measures.

One of the objective of the growth strategy is to improve the provincial human development indicators up to the national average, for the KP economy to grow in line with the national targets set under Vision 2025.

The strategy document has identified urbanisation, trade and connectivity, agriculture, overseas export of skilled workforce, construction and mining as the key economic sectors, having the potential to grow. This growth will help eradicate poverty and open up new jobs for millions, who enter the KP labour market.

According to the official statistics, the KP has the country’s highest poverty rate of 39pc coupled with a higher unemployment rate. To provide decent jobs to the youth, the province needs an annual 3pc growth in the job creation, which can be achieved only if the overall provincial economy grows at least at 6pc annually.


Most of the overseas KP workers are mainly working in the Gulf region, but they don’t possess skills which fetch high income. The strategy suggests upgrading skill standards and quality


For growth in regional trade and connectivity, smuggling will be curbed and legal trade promoted. To boost investment, land at subsidised rates will be offered for setting up cement plants near limestone depositories. Other proposals include setting up export processing zone and exclusive trade desks in stock exchanges; liberal credit by Bank of Khyber for trade enhancement, and development of Peshawar-Torkham corridor.

Foreign remittance plays an important role in the provincial socio-economic development and has the potential to grow tremendously. According to estimates every fourth Pakistani migrant worker belongs to KP. These workers’ remittances are not invested in the productive sectors, and end up in consumption..

To fully utilise the human resource potentials, the strategy document suggests that the government can take advantage of upcoming events such as Dubai World Expo 2020 and Football World Cup 2022 to be held in Dubai and Qatar. For both the events, the demand for skilled workforce and professionals can be met if the province is able to produce a required skilled workforce. Most of the overseas KP workers are mainly working in the Gulf region, but they don’t possess skills which fetch high income. The strategy document suggests investment in upgradation of skill standards and quality of the skill training being imparted.

Manufacturing and construction contribute 20pc to the provincial GDP. To realise the potentials of these two sectors, new policies will be initiated to promote innovation, replication of the successful industrial estates while giving priority to sectors that have proximity to markets such as Afghanistan and Central Asia or have easier access to raw materials. Likewise, the strategy document also suggests putting all the existing industrial estates under a new private sector managed entity for better functioning of the infrastructure.

To ensure agricultural growth, the strategy prescribes development of a medium term farm policy. Due to rapid urbanisation, cultivated land around major urban centers is rapidly being used for housing purposes. For this, the provincial government should develop a land zoning policy to regulate this practice and preserve agricultural base. Other proposals include strategies for rain water harvesting by building small dams in high rainfall areas as well as facilitating a switch-over towards water saving crops, like fruits, vegetables and pulses and discouraging high-water consuming crops like rice, sugarcane etc.

Stress has also been laid on introducing policy measures to promote energy conservation and efficiency. The strategy advocates incentivising construction of micro hydro projects by lowering down the duties on all the imported machinery being used for the hydropower projects. The strategy also recommends that the KP government should take over the Peshawar Electric Supply Company (Pesco) to overcome issues of load shedding and over billing.

The growth strategy also deals with the issues in inclusive growth by focusing on health, education, transport, tourism etc and prescribes different measures that can enable the province to attain the required growth targets on a sustainable basis.

Published in Dawn, Economic & Business, September 7th, 2015

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