Balochistan's share in the country’s tax income has spiked by more than six times from Rs29bn to Rs182.6bn in the estimated provincial revenue receipts for the next fiscal year, following the implementation of the 7th National Finance award in 2010/2011.
Additionally, the province is also being reimbursed gas development surcharge arrears of Rs120bn outstanding since 1954 in equal annual installments of Rs12bn after the retrospective increase in gas and wellhead prices.
The increase in the provincial revenues has since helped it spike its development investment from its own resources by almost five times from a little above Rs13bn to Rs65bn next financial year.
But the hefty spike in its revenues has not helped the province escalate growth, bridge the social and economic infrastructure gaps or improve the quality of governance.
The quality of public service delivery remains poor and the coverage patchy in a province that covers 44pc of the country’s land and three quarters of its coastline, and significantly large deposits of copper, gold, gas, coal, granite and other minerals.
Indeed, Balochistan has always lagged behind other provinces because of lack of adequate financial resources it requires to fill in the infrastructure gap. Its small population spread thinly over a very large area enormously raises the cost of providing services and jobs to the people.
On top of that, the province has been wracked by years of low-intensity Baloch insurgency and growing religious militancy that makes execution of the development projects a daunting task for the weak political coalition in Quetta. Yet these aren’t the only factors constraining growth and development at the cost of its people.
The massive increase in Balochistan’s income in the recent years has in fact brought to the fore other issues holding it back: ineffective governance and lack of competence and capacity to plan and execute development schemes. Sadly, the budget for the new financial year — like the previous ones — fails to address these issues.
“Political expediency of a coalition government has taken precedence over the wellbeing of the citizens of Balochistan, who continue to live in extreme poverty and without access to basic services,” a former Balochistan finance secretary commented on the Rs282bn provincial budget for 2016/2017 that carries a development outlay of just over Rs71bn (inclusive of above Rs6bn and a fiscal deficit of Rs36.48bn).
“People in most parts of the province are living without drinking water and electricity, our schools and colleges remain without teachers and facilities available to children in other provinces, and our hospitals don’t have enough doctors or proper equipment,” said Wahid Shahwani, a human rights activist from Khuzdar.
This is despite purported development investments of billions of rupees on social and economic infrastructure in the province in the last six years.
“Poor development planning and implementation capacity, ineffective governance, and political pressure a weak coalition setup has to face mean that bulk of the resources will either be wasted or embezzled,” the former finance secretary argued, referring to National Accountability Bureau’s corruption investigation into embezzlement of local government funds.
The previous provincial adviser on finance Mir Khalid Khan Langov and finance secretary Mushtaq Ahmed Raisani are in the custody of the anti-corruption agency, which recovered about Rs650 million in cash — both in local and foreign currencies and prize bonds — from the secretary’s home last month.
The increased revenues are not enough to tackle infrastructure gaps and development issues facing the province. “You cannot improve public service delivery and leverage private investment in the province’s mineral assets without strengthening your institutional capacity, developing human capital and improving laws, policies, regulations, etc,” another bureaucrat who has worked in different positions in Balochistan in the past argued.
“The government must invest generously in governance to leverage financial and mineral assets to escalate growth, create jobs, and improve the quality and coverage of services,” he insisted. “At least half of the funds available for development are either wasted because of cost and time overruns, and corruption. The government’s inclination for launching new schemes without completing the ongoing projects with a view to retaining the support of the members of the provincial assembly, too, results in considerable losses besides adding to existing massive development throw-forward.”
Instead of doing some housekeeping, the Nawab Sanaullah Zehri’s government is apparently pinning its hopes on foreign investments that it expects to flow into the troubled province after the completion of the China Pakistan Economic Corridor. “CPEC will be a game changer for the province because it will soon emerge as a hub of regional commerce after completion of the project,” the Nawab said in his budget speech.
Until then governance and institutional reforms can wait.
Published in Dawn, Business & Finance weekly, June 27th, 2016