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February 23, 2015

Our resource curse


February 23, 2015


Resources are normally a boon for a country. They can be critical inputs to the process of economic growth, plus they give the country option in terms of either saving foreign exchange on an import (if scarce) or earning foreign exchange (by exporting it).
In countries like ours, which appear to be resource scarce, the discovery of a resource is usually a moment of great fanfare. Glad tidings are bestowed upon the people, and the rulers harp on the highly unrealistic bandwagon of ‘self-sufficiency’. This oft-repeated story was at display again at Chiniot, where the PM was seen repeating the trite old stuff again.
Asna Ali, in her brief but excellent article on these pages, already elucidated certain aspects of this discovery. My column is basically an extension of the main points discussed in Ms Ali’s article, with a few additions.
When the beaming PM was announcing the discovery, my mind wandered back to the history of these kinds of discoveries in Pakistan and their sad plight. It also brought to my mind the ‘resource curse’ theory, whereby the discovery of a resource becomes a curse for a country. The sad plight of many resource rich African countries is a prime example. People who have seen Leonardo DiCaprio’s movie ‘Blood Diamond’ should have a fair idea of what I am talking about.
The discovery of natural resources in Pakistan has similarly turned out to be problematic for Pakistan too. And it’s not just Balochistan where we see the fallout of this resource curse, but true of all provinces.
When huge reserves of gas were discovered in Sui (Balochistan), glad tidings of achieving self-sufficiency and growth were postulated. Same is the case with the Reko Diq reserves that contain copper and gold. But what became of these? For years, natural gas from Sui flew to the majority of Pakistan for domestic and industrial use. Yet the residents of Sui, Quetta and other areas of Balochistan remained deprived of it.

ridiculous excuse of sardars not allowing this to happen is one of those fairytales that has been stuffed down our throats in the form of official propaganda. Who wouldn’t want to enjoy a comfort? The end result is that both Sui and Reko Diq have become a rallying point for Baloch separatists, and a curse for the whole of Pakistan. It would be unfair not to mention Gwadar too in this regard.
Sindh is blessed with vast resources of coal in the form of Thar coal. We have known that for at least two decades now. What has become of it? Instead of being a blessing, it is more of a source of contention between the province and Islamabad. The city of Karachi itself represents a huge resource, one that has been plundered and looted to the extent that God knows whether it will ever regain its former prominence.
Khyber Pakhtunkhwa has an abundant resource in the form of water, and naturally formed geographical locations that can easily be used to build dams (small and large) for hydropower. Such is the potential that if properly utilised, the production of electricity could easily surpass our demand. Yet this very resource is a bone of contention between the province and the central government. For years, KP has been demanding the profit from production of hydel electricity (hydel royalty), yet it usually comes up against a reticent centre which refuses to do that. This has not only soured relations between the province and the centre and served as a roadblock to other intended hydel projects, but also provided Pakhtun nationalists enough verbal ammunition to stay alive as a political force.
In Punjab, the areas of Kalarkahar and surroundings of Taxila represent a natural resource in the form of tourist destinations. But no more. The beauty of Kalarkahar is being ravaged by the bevy of cement factories operating in the area, driving away tourists and polluting the atmosphere. The hills around Taxila, once a beautiful sight that contained historic attractions like the Nicholson monument and the Wah gardens, now represent a revolting sight in the form half blown up mountains and an air full of dust and diesel fumes.
All this owes to the stone-crushing mafia, which is active in the area despite the Supreme Court’s order to dislodge them. Thus a naturally endowed resource in these areas has become a curse for the residents with the descending of cement and stone-crushing groups. They now suffer from various ailments, thanks in large part to the polluted air and water that they have to breathe and drink.
Seeing our gleeful PM at Chiniot gave me another reason to worry. I could not believe my eyes when I saw him accompanied by a nuclear scientist (retired), one who was put in charge of the Thar coal project. He had promised heaven and earth when he was put in charge of the project there. A decade has passed and billions of rupees have been spent, but his lofty promises have turned out to be zilch. What was he doing in Chiniot with the PM?
Our policy-makers should have realised by now that the real resource is not beneath the ground, but above it. It’s human intellect – the brain. Technology owes its development to human intellect, and without technology mankind would not have been to extract any resource from the depths of earth. To further illustrate my point, compare Pakistan and Apple (a technology firm).
Pakistan’s ever increasing population is now touching 200 million, and into the 68th year of its existence, the economy is estimated to be around $300 billion. Apple gained real prominence only in the late 90s, when the world was in the throngs of an IT revolution. Today, Apple has a workforce of 92,000, and it’s estimated worth is around $700 billion. It has about $180 billion just in cash. Contrast this to our rulers, who can’t hide their glee at reserves reaching $15 billion (mostly debt, to be returned one day with accrued interest).
So what does Apple do that we don’t? In short, it picks the best talent, retains it and creates products that are high in value. The moral of the story is that it’s about human capital, a resource that we are exceptionally poor at.
Last, but not the least, when the PM of a country personally announces the reduction in oil prices and mineral discoveries, it’s only a sad reflection of the existing gap in terms of intellectual development in the developing and the developed world. I have seen leaders of US and Europe announcing discoveries related to breakthrough in genetic decoding or landing of space orbiter on Mars. These were truly groundbreaking events. Rarely (if ever) will you see them announcing reduction in petrol prices or discoveries of minerals. To them, it’s not worth their time or their stature as heads of a state.
The writer is a researcher. Email: [email protected]




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