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June 24, 2017

The political economy of Balochistan


June 24, 2017

Why do budgets fail to give hope to the common citizen? Any analysis of Balochistan’s provincial budget leaves us with the same discontent. The current coalition government in the province had more space for budget planning and execution. After a higher allocation in the NFC Award in 2009-10, there were expectations that things would change in the province.

The composition of Balochistan’s economy is very different from that of the national economy. The province has a backward, largely traditional economy. Before the NFC, the provincial budgetary outlay in 2009-10 was Rs71 billion. After eight years, the development budget alone is more than Rs86 billion. Back then the PSDP used to be only Rs16 billion for the entire province. When the current coalition government came to power, the total budgetary outlay was less than Rs200 billion, but now budget figures have almost doubled.

So the question is: has the increase in resource availability changed the socio-economic conditions of the people, development deficit and infrastructure development?  The simple answer is: no.

Resource-rich Balochistan is Pakistan’s most under-developed province. For decades, natural gas from this province has fuelled Pakistan’s industries, helped saving billions in the import bill. But the gas produced in the province does not reach many parts within the province itself. And so, Balochistan’s discontent remains unaddressed.

The ambitious coalition government started a practice of allocating funds to unapproved projects. That is one of the key reasons the development budget is under-utilised. Balochistan’s development profile is not a mystery. The World Bank did a comprehensive study on the province’s resources, needs and opportunities. The reported estimated that the size of the provincial economy was $8 billion – less than eight percent of Pakistan’s total GDP.

Until some time back, the State Bank of Pakistan and the Economic Survey of Pakistan used to list the most and least developed districts in country, a practice that both institutions have now given up. Balochistan always ranked well below the rest of the country.

In the mainstream narrative, we often hear that Baloch sardars have kept the province backward by not allowing development work. There is not much evidence to prove this view. From 1999 to 2007, Gen Musharraf enjoyed unquestionable power. Who stopped him from developing the province, or providing colleges to Gwadar or a 100-bed hospital with solar energy to Gwadar?

Balochistan is the only province that has middle-class politicians elected to parliament. While it is socially conservative and economically backward, the province is politically progressive, unlike Punjab where the situation is reverse. Even parties led by sardars – like the BNP – promote middle-class leadership, with roots in student activism. Despite a largely traditional society and structure, the Baloch political movement has been progressive and secular in its essence.

The lack of economic development in Balochistan is rooted in politics. Had there been political will and resource availability, developing Balochistan would not have been a big problem. The province does not have a large population, but there has been an influx of immigrants and refugees from Afghanistan. There are close to two million Afghan refugees in the province, which is no doubt a burden on education and health infrastructure.

In terms of the development budget, in the past seven years the figure has gone up from Rs26 billion to Rs86 billion. But there is a serious problem of prioritisation. Instead of completing ongoing programmes, every year new schemes are added, thus eating away space for future planning. Last year alone 1,035 new projects were added, although there were already 1,258 unfinished projects.

Balochistan spends more on developing communication infrastructure than on education and health combined. Last year saw a 40 percent decline in the education development budget – from Rs10 billion in 2015 to Rs6 billion in 2016. The province spent less than 10 percent on education, the lowest when compared with the three other provinces. In the outgoing fiscal year, only Rs542 million was allocated for primary education. For 36 projects in middle education, only Rs231 million was allocated, while secondary education got Rs795 million. Rs2.2 billion was allocated for 95 college education projects, including a Rs300 million grant from the Oman government to establish a Sultan Qaboos Residential Model school in Gwadar. While the funding is welcome, the federal government could have established two such schools for boys and girls years ago. By now there could have been hundreds of local educated youth to benefit from Gwadar’s development. This could have, in a way, reduced their sense of deprivation to an extent. After all, who wants to see other people taking away their jobs?

Balochistan needs Rs19.6 billion to complete its ongoing new education projects; this can be done in one year. The current education development plans heavily focus on college, university and higher secondary education. Projects for primary and middle education make up only 22 percent. Every province’s focus is on higher education because those initiatives get attention. Not much attention is given to the 50 million illiterate people in the country, which in a way is a policy of educational apartheid. Balochistan needs to prioritise primary education, and in particular girls’ education, as the province is far behind in literacy numbers than the rest of the country.

The Balochistan government’s documents show that among children under the age of ten years only 28 percent are literate; the ratio for girls is even worse at only 16 percent. In rural areas, only 10 percent girls are educated; the dropout rate is 70 percent. Budgetary allocations show that the government is not making efforts to enhance female literacy.

Balochistan cannot fight poverty and backwardness without an educated population. With negligible industry and long spans of drought, the rural economy won’t generate enough surplus to enable families to afford education in urban centres. Education has to be managed in a way that it reaches their doorsteps.

Except for the city of Quetta, districts in the province do not have modern health facilities. Rs3.8 billion was allocated to health in 2015, which was reduced to Rs3.6 billion in 2016. It is hard to understand the logic of reducing the development budget for such key social sectors, especially when there is an increase in federal transfers every year.

Over a decade has passed since the Gwadar Port was inaugurated, but infrastructure development and the energy needs of the city have not changed. Now with CPEC coming up, locals remained sceptical about the fruits of the much-hyped projects.

China is not a donor agency that can be used to finance and fix gaps and deficits. That has to be done by the provincial leadership. The federal government needs to spend a considerable chunk of the budget on social development needs, not just on big road and railway infrastructure projects. People are right to ask what they have to gain from these projects; they have little capital formation to invest and or even consume. Have we thought about the psychological and emotional impact of these mega projects on the local population – when mighty trains and trucks cross their barren lands and deserted small towns?

One hopes we are not aiming to create another Dera Bugti, which lightened the rest of the country for decades but still remains in the dark, with its people displaced.


Email: [email protected]

Twitter: @MushRajpar


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