Rain and cyclone havoc underscores the needto invest more money in Balochistan

The province is Pakistan’s most neglected and backward region, but it could become the country’s new economic frontier within the next decade or so if the govt pumps more money into developing its infrastructure

By Kaleem Omar


http://jang.com.pk/thenews/jul2007-weekly/busrev-09-07-2007/index.html#1


The government has somewhat belatedly appealed to the international donor community for aid to deal with the havoc caused by the recent cyclone and heavy rains in Balochistan. Many sections of the Mekran Coastal Highway, linking Gwadar and Karachi, have been washed away by flash floods. The RCD Highway, linking Karachi to Quetta, was re-opened to traffic only a few days ago, after having been closed for a week due to flooding. Several other roads in the province have also been badly damaged by flooding, leaving many towns cut off from the rest of the country.
Many power pylons are down, leaving large swathes of the province without electricity. Thousands of acres of land have been submerged by rainwater and by rain-fed streams bursting their banks, leaving more than a hundred thousand people marooned. For a while it even looked as if the recently completed Mirani Dam on the Dasht River in western Balochistan might be breached by the rapidly rising water level in the reservoir. Had that happened, the affect on downstream villages and towns would have been calamitous and many lives might have been lost.
All this underscores the need for the government to invest more money in upgrading the province’s existing infrastructure and in accelerating the pace of work on new infrastructure projects. A few projects have been completed in recent years, including Phase I of the new deepwater commercial port at Gwadar, but many others are still in the planning stage and exist only on paper. Work on these planned projects must not be allowed to get bogged down due to lack of funding.
Balochistan is the most neglected and most backward province in the country. But it could become Pakistan’s new economic frontier within the next decade or so if all the multifarious development schemes that are planned to be built over the next five to ten years in Balochistan and other parts of the country, as well as in the region around it, start gelling together and become a reality.
It is, therefore, vital that progress on this programme not be allowed to slow down for lack of money. One important source of funding could be the money the government expects to receive from foreign entrepreneurs interested in buying up state-owned enterprises under the privatisation process. Instead of using the money to reduce the country’s foreign debt or to meet non-development expenditure, the government would be well advised to invest the money in infrastructure projects in Balochistan.
A key element in opening up Balochistan to the outside world and making it an engine of growth for Pakistan’s economy has to do, in more ways than one, with what is happening in western China. This is the Chinese region that borders Pakistan.
Beijing says it intends to spend $ 250 billion dollars in infrastructure projects alone in western China over the next five years and another $ 250 billion in bank loans to industry and commercial enterprises to boost economic growth in the region and bring it at par with China’s other regions.
Pakistanis who have been visiting western China in recent months speak of seeing vast new infrastructure projects, including modern highways to rival the best highways in the world, water supply schemes, power generation and distribution networks, hotels, educational institutions and a host of other development schemes.
China’s eastern seaboard is 3,500 kms from Kashgar, western China’s main city, whereas the distance from Kashgar to the Pakistani coastal town of Gwadar on Balochistan’s Makran coast is only about 1,500 kms. So there is an obvious huge cost advantage to China in using Gwadar as the gateway port for the western China region instead of its far-off eastern-seaboard ports.
Oil supplies from the Gulf states have to travel even greater distances to get to western China, because they have to be shipped more than 15,000 kms all the way around India, through the Malacca Straits into the South China Sea and on to China’s eastern seabord ports, and then have to be sent 3,500 kms overland from these ports to destinations in western China.
With its economy growing at a scorching 10.5 per cent a year, China has now become as big an importer of oil as the United States, with imports averaging 10 million barrels a day.
This explains China’s interest in helping Pakistan develop Gwadar into a full-fledged commercial port, capable of handling big oil tankers and other large cargo ships. Beijing gave Pakistan $ 200 million in aid to build the port’s first phase, and has now also agreed in principle to give $ 500 million in aid for the second phase. The second phase will add 20 berths to the three berths built by a Chinese contractor in the first phase. Work on the second phase is expected to begin in the next few months.
Islamabad and Beijing are also discussing the possibility of Chinese financing for a highway linking Gwadar to the central Balochistan town of Khuzdar, on the RCD Highway connecting Karachi and Quetta. They are also discussing Chinese financing for upgrading the existing road-link connecting Quetta to the Indus Highway via Loralai and Dera Ghazi Khan.
From Dera Ghazi Khan the Indus Highway heads north through Punjab to Islamabad, to link up with the Karakoram Highway (KKH) at Havelian, near Abbottabad. From Havelian the KKH heads north for 500 km to the Khunjrab Pass on the Pakistan-China border and then another 250 km to Kashgar.
The KKH was built jointly by Pakistan and China in the 1970s and opened for traffic in 1979. China has now offered to help Pakistan to widen and upgrade the KKH on the Pakistani side to make it an all-weather highway capable of handing heavy truck traffic. An upgraded KKH will facilitate the flow of Chinese imports into western China and exports from there to foreign markets.
Beijing and Islamabad have also signed a memorandum of understanding under which China will build a 90-kilometre highway connecting the Chinese side of the KKH to the Russian-built highway network that already connects all the five Central Asian Republics of the former Soviet Union.
Once all the missing elements of the highway network are in place, there will be a direct overland route trade linking Pakistan and China. This route will connect the new commercial port of Gwadar on the Balochistan coast to western China and the landlocked Central Asian Republics, thus making it unnecessary for Pakistan to build a highway link to Central Asia through war-torn Afghanistan, where the American invasion and occupation of the country has done nothing to stop the fighting between fractious warlords and other groups, including an increasingly resurgent Taliban.
Pakistan could reap enormous economic benefits from this alternate overland trade route from Gwadar to the five Central Asian Republics and western China. All the export and import trade of these six countries could then flow through Gwadar, earning Pakistan hundreds of millions of dollars a year in port charges, bunkering charges, stevedoring fees, cargo-handling charges and other imposts.
Pakistan’s road transport industry would earn millions of dollars a year in freight revenues for carrying import cargoes from Gwadar to western China and the Central Asian Republics and export goods from those countries to Gwadar for shipment to international markets.
Also, Pakistan’s own export trade with these countries could receive a significant boost once the new highway links are in place. Some agricultural exports from western Punjab and southern NWFP destined for Gulf countries as well as some imports from those countries destined for Pakistan could also be routed through Gwadar, rather than only through the more distant port of Karachi. This alternate route would help Pakistan to achieve significant foreign currency savings in sea-freight costs.
Overland trade between neighbouring Iran and Pakistan would also be boosted by the coastal highway linking southwestern Balochistan to Karachi and the proposed highway connecting Gwadar to Khuzdar and points farther north in Balochistan and other parts of Pakistan. In short, there would then be a whole network of link-highways carrying a huge range of commodities and goods through the Pakistan-Iran-Central Asian-western China region.
The local population of the Balochistan coastal region and other parts of the province would benefit significantly from all the economic activity involved in creating this infrastructure. These benefits would flow not only from thousands of jobs for locals with companies and government agencies engaged in the construction programme but also from the numerous indigenous vendor industries, firms and individual enterprises that would then emerge to supply local goods and services to these companies and agencies.