Balochistan is a strategically significant province with a 750km coastline and the vital Gwadar Port. The province shares a 2,640km border with Afghanistan and Iran, offering a competitive trade advantage via the Arabian Sea and the Strait of Hormuz — one of the world’s busiest oil trade routes.

More importantly, it is rich in minerals, with an estimated reserve of copper and gold worth $270 billion (5bn tonnes) in Rekodiq Copper and Gold Deposits and a 412 million tonnes reserve of copper and gold in Saindak, Chagai.

The province also has 450m tonnes of iron ore and abundant deposits of marble, coal, and chromite. Balochistan plays a key role in the economy of Pakistan through fisheries, tourism, agriculture, and livestock, providing for 48 per cent of the total sheep, 22pc of goats, and 41pc of camels, with organic meat as a speciality.

Despite its potential, Balochistan remains underdeveloped, with severe infrastructure deficits. Only 19pc of the population have access to safe drinking water, while malnutrition rates are among the worst in the country — 40pc of children are underweight, 52pc suffer from stunting, and maternal and infant mortality rates stand at 298 per 100,000 and 66 per 1,000, respectively.

There is a need to move away from a population-centric weightage system that augments inequality between provinces in terms of resources

Education levels are also low, with a literacy rate of just 42pc as per the 2023 census compared to the national average of 61pc. Moreover, only 25pc of the population has electricity access, and poverty remains high at 71pc, according to the Multidimensional Poverty Report, 2016.

The purpose of highlighting the extreme poverty and underdevelopment of the province is to advocate for an increased share in the upcoming ninth National Financial Commission (NFC) award for Balochistan, as the eighth NFC award remained inconclusive.

Before the seventh NFC award, the only indicator for the distribution of shares was population. That left Balochistan with a meagre share of 5.08pc while Punjab received 57.5pc. Since then, the seventh NFC award, signed in 2010, revised the formula, incorporating factors like poverty, underdevelopment, revenue generation, and inverse population density, increasing the share of Balochistan to 9.09pc. However, Punjab still receives the highest allocation: 51.74pc under a formula that gives 82pc weight to population.

Article 160 of the Constitution of Pakistan governs the distribution of financial resources between the federal government and the provinces through the NFC award. It ensures that the share of any province in the award cannot be reduced below that of a previous award. However, the provinces have called for a revision to make the distribution more equitable.

A useful comparison can be drawn with India, where the distribution formula for the divisible pool is guided by its Finance Commission’s recommendations, with indicators such as income distance (45pc), population (15pc), area (15pc), forest and ecology (10pc), demographic performance (12.5pc), and tax effort (2.5pc).

Similarly, in other federal states, resource distribution follows different models. In Canada, equalisation payments are made to less wealthy provinces to ensure comparable levels of public services across the country, while in Germany, a complex system of revenue sharing balances financial capacity among federal states to promote equity and unity.

The Government of Balochistan is now advocating for a revision in the ninth NFC award, proposing a reduction in the population-based weightage. The province seeks to balance the distribution criteria by increasing the weightage for other key indicators, such as revenue generation, inverse population density and geographical area, or vastness.

Another key indicator that should be added is ‘demographic performance’ to acknowledge and reward states that have effectively managed population growth. If implemented, these proposed adjustments could significantly increase the share of Balochistan in national resources — from the current 9.09pc up to between 15-20pc.

A central argument underpinning this proposal, in addition to the social and economic factors, is the need to move away from a population-centric formula, which contradicts both national and international commitments to population control.

With Pakistan’s average population growth rate at 2pc and Balochistan’s at a higher 3.2pc, maintaining a system that rewards high population with greater resource allocation undermines long-term development, population control programmes and sustainability goals.

Such an initiative must be taken by the government of Pakistan in order to incentivise all the provinces to adopt sound population control measures for sustainable development. Therefore, delinking resource distribution from population metrics would not only promote equity but also provide a critical incentive for population stabilisation efforts, aligning fiscal policy with broader socioeconomic objectives.

The case of Balochistan is strong, given its persistent challenges. Terrorism in the province resulted in 27pc of national casualties in 2022. Moreover, prolonged droughts from 1998 to 2022 have caused damage, and the devastating floods of 2022 caused over 300 deaths, destroyed 426,897 homes, and killed 0.5m livestock.

The border fencing with Afghanistan and Iran has disrupted trade, which has worsened due to the existing energy crisis. All these crises have further deepened socioeconomic distress, worsened law and order and pushed the youth towards anti-state elements.

Given these hardships and the widespread insurgency, the federal government and other provinces should support the demands of Balochistan to increase resources by revising the formula. Ensuring equitable and inclusive development through a fair NFC award is essential for national stability, economic uplift, and long-term internal harmony.

The writer is a public policy analyst based in Quetta. (Views expressed in this article are the writer’s own and do not reflect any organisation).

Published in Dawn, The Business and Finance Weekly, May 5th, 2025