FOR the preparation of Balochistan Economic Report (BER), the Asian Development Bank (ADB) has approved technical grant of $300,000 to the government of Pakistan. BER is mainly aimed at formulating an strategy to target sustainable, widespread and cross-sectoral growth and integrated economic development in the province.
The programme spread over 18 months (from January 2006 to June 2007), will primarily support technical studies, facilitate policy dialogue and assist the provincial government in organizing the annual Balochistan Development Forum (BDF) in April 2006 and March 2007.
The intermediate output will be the BDF in April 2006, where a policy vision paper stating Balochistan’s immediate and medium-term economic development goals will be presented.
The paper will be based on an analysis of economic and human development trends and a preliminary estimate of provincial accounts. The final report will be the BER, to be presented at the BDF in March 2007.
The provincial government has already formulated the Balochistan Poverty Reduction Strategy Paper (BPRSP) to expedite human development and reduce income-linked poverty. The key pillars of BPRSP are engendering growth, managing scarce water resources, reforming governance, improving human development, and addressing vulnerability to shocks. However, the province has limited resources and flexibility to support its development needs.
The BER will review the key barriers to private sector development in the various sectors and identify initiatives to stimulate private investment and capital accumulation. Certain sectors, such as the SME, mining, agribusiness, and fisheries, could generate incomes and employment.
The World Bank will provide technical expertise in (i) agriculture, livestock, water, and irrigation; (ii) mining and the oil and gas sector; and (iii) public service delivery and poverty reduction.
Preparation of BER is a challenge, as the interplay of geographic, cultural, ethnic, historical, political, and other factors in Balochistan poses governance and institutional difficulties with major implications for the quality of social service delivery. Human development indicators in Balochistan are the weakest among the four provinces and improvements will need concerted efforts over the long-term.
Governance reforms in the province need to be implemented and the institutions in the social sector require to be strengthened to improve the effectiveness of public and private social service delivery. For instance, there is need to localize the planning and management of social services.
The centralized planning and management of social services has made public social services less effective and inefficient and, and more inaccessible to the poor living in remote areas. This centralization has created undisciplined, unionized, and absentee government providers; a lack of focus on clients’ needs; central bureaucracies overwhelmed by transfers and service litigation; and communities indifferent to social service delivery.
The key objectives of the BER strategy include generation of income and employment by developing small-and medium-sized enterprise (SMEs) and private enterprise, improving fiscal and financial management, Gwadar port development, economic geography and transport networks, and development of urban sector in the province.
With regard to the development of SMEs and private sector, the ADB technical expertise will help to (i) identify the financial, regulatory, and institutional constraints on SMEs; (ii) conduct a structural analysis of the SME sector, supported by a quantitative survey of small-scale industries, and stratify the sector by scale and industry; (iii) highlight sub-sectors with high potential for growth and private sector investment; and (iv) propose an integrated strategy to promote SME development and employment generation.
The ADB will assess the potential of urban growth centres in the province. It will look at the nexus between regional development (for instance, agribusiness in northern Balochistan, mining in Chaghi district, cross-border trade through Chaman and the Gwadar port development along the coast) and investment in infrastructure and roads.
A comprehensive urban strategy will be formulated after (i) analyzing major cities and townships and assessing their potential to function as urban growth modes; (ii) designing a strategy to integrate regional economic development with urbanization; (iii) assessing the socio-economic impact of urban growth and migration on the provincial economy; and (iv) designing an urbanization policy to support urban development and facilitate the growth of service infrastructure for regional industries.