WHILE presiding over a meeting of the National Credit Consultative Council (NCCC) on July 19, 2005, the Governor of the State Bank, Dr Ishrat Husain said that the provincial governments should be involved in the development of infrastructure projects.

The observation was made by the Governor in response to the view of the private sector representatives that lack of interest on part of provincial governments’ delayed infrastructure projects, badly needed for sustainable economic growth. Normally, a part of the budgetary allocations for development projects remains unutilized.

Ownership of a project plays a vital role in its conceptualization and effective execution. The feasibility of a project can better be ensured through involvement of stakeholders/beneficiaries rather than mandated schemes. But no less important is the institutional capacity to deliver. The capacity building of the provincial governments and institutions is as important as involvement of provincial stakeholders in infrastructure.

It was pointed out in the NCCC meeting that lack of modern transportation facilities from farm-to-market was impeding growth of agricultural sector despite a record increase in disbursement of agricultural credit. This has also impeded growth of agro-based and other small industries needed to create exportable surpluses.

Other proposals made at the meeting included: the banks should finance production or purchase of modes of better transportation between farm and market. And the Small and Medium Enterprises Development Authority (SMEDA) should also have to come up with specific solution for a variety of issues and problems facing small and medium -sized industries.

In this context, Balochistan presents a typical case where under-utilization of the development budget, lack of institutional framework, bureaucratic snags and scarce bank credits are key issues related to the economic development.

The under-utilization of the development budget is a reflection of poor fiscal planning and management due to lack of institutional and human capacity. Out of the Rs9.3 billion earmarked for development schemes in the FY 03-04, only a small portion is stated to have been effectively utilized. Fiscal and physical targets do not match.

For FY 2005-06, a sum of Rs11.76 billion have been allocated for Annual Development Plan (ADP) out of which Rs5.4 billion (which is about 47 per cent of the total ADP outlay) have been earmarked for road construction. The provincial government would give Rs4.41 billion and Rs999 million would come from foreign assistance. It’s real outcome in terms of physical achievements would be hazardous to guess.

The development planners in the province have been unable to lay foundations of their plans on sound footings. Non-existing or lack of infrastructure such as, roads, means of communication, water supply prove that there has been no proper planning for the socio-economic development in Balochistan in the past five decades or more.

A major snag is the bureaucratic web. The provision and release of funds for development has been very slow, more so, if it empowers people at the expense of the authority. Complaints abound saying DCOs pay no attention to Nazim’s recommendations, queries and suggestions vis-à-vis development schemes.

Bureaucracy is the dominant player in the game. It sets its own rules for safeguarding its interests. It executes plans, implements schemes and enforces laws as it deems fit. It is the permanent government. The rulers come and go, but it remains entrenched in power enjoying all the privileges.

At present, the province has no say in bureaucratic circles in Islamabad and hence it is neglected and discriminated. The government must ensure the due representation of the province by increasing the job quota from 3.5 to 5.3 per cent in central superior services of Pakistan. Bureaucratic snags need to be removed to let the process of economic development in the province continue in a sustainable pattern.

The province needs more bank loans to set up industrial units or launch other projects. So far, shopkeepers, traders and smugglers have largely benefited from the bank loans.

The province faces a shortage of entrepreneurs. If there are some, they are shy to take the risks. But if the banks encourage them, some of the dynamic entrepreneurs may come forward.