Nov 10, 2009

Balochistan: World Bank says Poverty Rising

Active ImageBalochistan has the weakest long-term growth performance of all provinces in the country, according to a World Bank study.



Below is an article published by Intellibriefs:


The ‘Balochistan Economic Report 2009’, which took into account statistics from 1972-73 to 2005-06, said the province’s economy expanded by 2.7 times in Balochistan, 3.6 times in the NWFP and Sindh and four times in Punjab.

Overall, the size of the ‘economic pie’ rose 110 per cent in the rest of the country, except Balochistan.

With Balochistan’s growth lagging behind the rest of Pakistan, its per capita income level has lagged behind other provinces, the World Bank said.
Balochistan ranked lowest on the ‘horizontal axis’ in 1981-82 as it was the poorest province. It also ranks lowest on the ‘vertical axis’ because of a weak growth performance.

While Balochistan experienced large variations in growth from one year to the next, its average rate of expansion matched the one in the rest of Pakistan reasonably close over growth periods in the past. Apart from the latest recovery, GDP growth was no more than one per cent different from the rest of the country.
Poverty in Balochistan has risen and become statistically indistinguishable from that in the NWFP, the province with traditionally the highest measured poverty.
Balochistan stands out as the province with the worst social indicators. It scores lowest in 10 key indicators for education, literacy, health, water and sanitation for 2006-07.

The province has not yet been able to exploit adequately its geological potential. Balochistan has more than half of the national prospective geology for minerals, yet it contributes just over one-fifth to national mining GDP and leads only in the production of coals.

In 1994-95, Balochistan produced 355 billion cubic feet (bcf) of gas and accounted for nearly 56 per cent of Pakistan’s total output. A decade later, the province produced 336bcf and contributed only 25 per cent to national output. As Balochistan’s gas supplies are exhausting, Pakistan is also running out of usable energy.

GWADAR POTENTIAL: If the country’s trade volumes continue to grow at a healthy rate over the next 10 to 15 years, the capacity constraints at Karachi and Qasim ports will generate substantial business for Gwadar.

Gwadar is located near the entrance of the Straits of Hormuz in the Persian Gulf, which holds close to three-fifth of the world’s crude oil reserves and almost half of the world’s proven gas reserves.

The development of Gwadar port, Makran coastline and mining and petroleum sectors and facilitation of cross-border trade in energy and other goods will provide a powerful impetus for stronger linkages of Balochistan’s economy with the rest of the country.

‘The government should focus on activities around Balochistan’s economic assets, such as minerals, gas, fisheries and coastal development, trade with Afghanistan and Iran, livestock and crops,’ the World Bank report says.

Water is the single most important constraint to developing rural Balochistan. While some 87 per cent of Pakistan’s total available water is found in the river system of the Indus basin, only five per cent of Balochistan’s landmass is connected to the Indus basin and the remaining 95 per cent rely on non-perennial sources. Since 97 per cent of province’s water use is by agriculture, any strategy to deal with the water shortage has to put this sector centre stage.

Insufficient exploration has resulted in few new discoveries. Less than one-third of the reserves are left in Sui, and no more than 45 per cent of the known gas reserves in the province overall. Uch is the only field with large remaining reserves, but the gas is of lower quality than in Sui. In calorific equivalent basis, the Uch reserves are just under half of what remains in Sui.

According to the report, the reserve depletion has already an impact on production. Volumes have declined since 2001 by about 3.5 per cent annually, and Balochistan’s share in national production dropped from 56 per cent in 1995 to 25 per cent only in 2005. At current rates of production, the province’s present reserves will be almost depleted within the next 15 years.