PAGE Blog Business Weekly Magazine
The absence of infrastructure is the single most important reason that discourages investment in the industrial sector development in Balochistan. It is the most backward province, which is also far behind from other provinces in road sector development. The province has a road network comprising about 25,099 kilometers, which is less than that of the other provinces. The existing road network in Balochistan is in a dire need of maintenance and repair. A coordinated network of roads does not interlink 32 districts in the province and hence there are missing links between economic centers in Balochistan. The limited road access and lack of road network affect the people of rural areas reducing their access to markets. This is a potent cause of prevailing poverty in the province.
It is worth mentioning that about 35 percent of entire network of national Highways of the country pass through Balochistan. The international, national and inter-provincial highways passing through Balochistan include Pak-Afghan Highway, Pak-Iran Highway, Balochistan-NWFP Highway, Balochistan-Sindh Highway and Balochistan-Punjab Highway.
Balochistan is a strategically located province. The ongoing mega development projects like Gwadar deep-sea port would make the province a hub for regional transport more effectively for land locked Afghanistan and Central Asian states. This would accentuate the existing road network in Balochistan. Therefore Balochistan urgently needs a mega road sector development project to cope with the new circumstances after the completion of mega projects in the province and expected surge in economic activities in the province.
Balochistan’s geo-strategic location makes it the most attractive for transit traffic to the land locked Central Asian Republics (CARs). It provides greater opportunities for trade and commerce to all countries of the region by virtue of its strategic location. The Asian Development Bank has already approved construction of Gwadar-Saindak Highway taking the international highway to the borders with Afghanistan.
Gwadar Port is of immense importance not only for trade with CARs but also for the development of Pakistan. Of course, Gwadar has the potential to become a hub of major economic and commercial activities in the region. There is a high need for establishing roads and warehousing facilities at Taftan, Chaman and Torkham borders in order to make full use of Gwadar Port. The future scenario necessitates the establishment of a strong, well-coordinated and metalloid highway and road and rail network spreading across the province and interlinking the major commercial centers in Balochistan. China-Pakistan Economic Corridor (CPEC) project is perhaps the answer.
CPEC and industrial development
Gwadar Port is the essential part of the $46 billion CPEC project. The CPEC involves construction of highways, railways and energy pipelines connecting western China with Pakistan and the Persian Gulf. The two countries signed 51 deals worth billions of dollars mostly relating to the CPEC project. Located at the crown of the Arabian Sea, Gwadar Port in Balochistan will open up an energy corridor from Central Asia and the Gulf across Pakistan to western China.
There are no two opinions that the CPEC is going to be a game changer for investment-starved Balochistan. No doubt, a huge investment in infrastructure sector promises a brilliant economic future for the development of industry in the province and it will bring about a revolution in its communication sector. The project would initiate a mega development process with huge investments, which could make the province a new economic frontier of the country.
The CPEC and Gwadar port are expected to usher in a new era of industrial development in Balochistan. Balochistan possesses enormous industrial potential in key sectors — agriculture, livestock, fisheries and minerals. There are greater investment opportunities in all sectors of provincial economy for exploiting the industrial potential of the province. A large number of agro-based, livestock-based, fisheries-based and mineral-based industries can be set up in the province.
A fully operational Gwadar Port will boost industrialization process in the province. With the functioning of industrial zone, Gwadar would become a hub of industrial and trade activities. The government has also reserved 3000 acres of land for the development of Gwadar Industrial Estate (GIE) to meet the demand of industrial plots. The government plans to establish a zone for the promotion of small and medium industries under the auspices of SMEDA in Gwadar. It also plans to open branches of banks and DFIs for making available loan financing to the intending entrepreneurs.
Gwadar free port project promises massive investment, greater generation of employment opportunities and more development projects in different sectors of provincial economy. Commerce, industry, trade and economic activities would receive a boost after the development of two-phased seaport in the province. Naturally the local people will benefit from the economic activities underway in their areas. The living standard of the local people would improve owing to the development projects in different economic sectors related to the Gwadar Port.
Establishment of Free Trade Zone, and Export Processing Zone (EPZ) will open the doors for investment and development of small, medium and large scale industries generating revenue for the government and providing profitable avenues for both the skilled and non-skilled workforce in Balochistan.
Though Balochistan has no sound industrial base, yet it goes to the credit of this province that it brought about an industrial revolution in the country through its energy resources.
| GLOBAL BALANCES | |||||
| 2016 | 2017 | 2018 | 2019 | 2020 | |
| GDP Growth Assumption (% per year) | 3.67 | 3.68 | 3.71 | 3.75 | 3.77 |
| Global Demand | 94.47 | 95.68 | 96.86 | 98.00 | 99.05 |
| Non-OPEC Supply | 57.78 | 58.26 | 58.96 | 59.52 | 60.00 |
| OPEC NGLs, etc. | 6.82 | 6.88 | 6.89 | 6.91 | 6.93 |
| Global Supply excluding OPEC Crude | 64.60 | 65.14 | 65.85 | 66.43 | 66.93 |
| OPEC Crude Capacity | 35.12 | 35.41 | 35.65 | 35.91 | 36.24 |
| Call on OPEC Crude + Stock Ch. | 29.87 | 30.54 | 31.02 | 31.58 | 32.12 |
| Implied OPEC Spare Capacity | 5.25 | 4.87 | 4.63 | 4.33 | 4.13 |
| Source: PAGE-Research Department | |||||
The industries are mainly concentrated in Hub, Winder, Gadani and Quetta in Balochistan. The Lasbella Industrial Development Authority (LIDA) was established in 1984 to provide facilities to the industrial zones in Hub, Winder, Gadani and Uthal areas. A total of 34 industrial units are functioning in the provincial capital Quetta and 45 more industrial units have also been planned to set up in the city. Six industrial units have already been established in Nasirabad district and investors have shown their interest to invest and construct factories. Provincial government plans to set up two more Industrial Estates one each in Loralai and Bostan aimed at attracting investors to construct factories in the areas, besides providing employment to youths. Loralai Industrial Estate will be established on 50 acre of land while Bostan Industrial Estate on 200 acre of land. The government also intends to set up industrial estates in Khuzdar, Turbat and Pasni aimed at providing job opportunities to local people.
