OFFICIALS were quick to confine pilgrims and other Pakistanis coming from Iran as news of cases of Covid-19 in the religious city of Qom broke through. A great chunk of the province’s budget was channelled to Taftan, the town bordering Iran, through the Provincial Disaster Management Authority (PDMA) and the health department.

However, the entire country is suffering because of the mismanagement there. While a huge amount of the budget has been released from the provincial government’s exchequer, the ground realities tell another story.

As is widely known, Balochistan is the least developed province in the country receiving scant attention from the federal government. The few economic activities that sustained it have come to a halt due to the pandemic.

Background interviews with officials in Quetta suggest the federal government has not given a special package to the provincial government because of resource constraints. Therefore, Balochistan had to meet the challenge with the meagre resources at hand.

Members of the Balochistan Assembly have released Rs65bn but a lot of government officials are refusing to divert funds away from their development projects to help fight Covid-19

Given that some of the most powerful economies of the world have been brought to their knees by the virus, what is the poorest province of Pakistan doing to cope with the situation?

Balochistan has Rs293 billion for its non-development budget and Rs100bn for its development budget. But Covid-19 has drastically increased the province’s financing needs, especially for the health sector and the PDMA. A lot has already been written on the appalling state of health care in the province and its inadequate resources during normal times.

It seems highly unlikely that the federal and provincial governments can provide the finances required to meet the coronavirus challenge. As yet, the finance department has released Rs500 million for expenses including the establishment of quarantine centres in Quetta, Taftan and Chaman.

While government officials intend to turn colleges, schools and governmental structures across the provinces into quarantine centres, this requires financing at a large scale; till June at least Rs12 billion is required to accomplish this.

Since salaries and pensions are drawn from the non-development budget, the provincial government can spend only from the development budget. Sources from Balochistan’s bureaucracy claim to have floated a proposal to immediately stop spending on all development projects and revert these funds to combat the Covid-19 emergency. However, the ruling and opposition benches have yet to decide this.

Sources reveal that members of Balochistan Assembly have released Rs65bn but the remaining members from the ruling party as well as the opposition are on the same page about not contributing towards the Covid-19 efforts from the amount allocated for the projects at hand.

These ministers are adamant about not transferring funds from the schemes in their constituencies towards the health crisis therefore the question is: can the provincial government stop development financing at this critical juncture?

Despite these hurdles, the provincial government has allocated about Rs1.5bn to expenditures related to Covid-19 through the health department and PDMA.

About 90 per cent of Balochistan’s revenue stems from federal transfer which has two components: straight transfer and the National Finance Commission (NFC) award. The straight transfer has further four elements: gas development surcharge, excise duty on national gas, royalty on national gas and royalty on crude oil. The petroleum ministry collects these and, based on production, sends the provinces their due shares.

After the 7th NFC award, resources were diverted to the province but it is still the centre’s responsibility to help out as under lockdown there is no economic activity in the province. It is not only a question about scant resources but also about the way funds are used to fight against the Covid-19 challenges. With or without federal support, is the Balochistan government up for the task?

Published in Dawn, The Business and Finance Weekly, April 6th, 2020