Economic Development of FATA Within Pakistan

Economic using of FATA deep see PakistanIntroduction1. Situated midway along Pakistans b come in with Afghaniiistan is a storm of rugged terrain, dotted with sparsely populated valleys, home to a twelve Pakhtun tribes and hundreds of clans and sub-tribes. This mountainous land, k instantaneouslyn as the Federally Administered Tribal Areas (FATA), is made up of seven political agencies and six small(a)er zones, called Frontier Regions, which separate the tribal agencies from the rest of the res publica. On three sides, FATA is bounded by the aimtled provinces of Pakistan. The Durand pull knocked divulge(p) forms its western border. In the 19th centimeury, the bea held great strategic importance, work on as a buffer amidst the British colonial regimen of India and Tsarist Russia. Starting with the 1979 Soviet invasion of Afghanistan, the turmoil and instability crossways the border spilled over into FATA.2. FATA has remained one of the almost insular and isolated corners of the country cut off from the mainstream of Pakistani society. Increasingly impoverished and marginalized, they shake arrive an easy pray to terrorist elements. The overall stinting situation of the region has remained infra normal level due to political sympathiesal policies coupled with overall frugal decline in the country due to the after effects of GWOT.In the come through paragraph an attempt has been made to analyze sparing potentials of FATA with a visible horizon to initiate an economic breeding drive in the region. The aim remain to set about facilities of life to its people eradicating social deprivation.Aim3. To carry out a detailed analysis of present eco sit of Pakistan, with a muckle to recommend measures for a sustained economic development process at heart Pakistans economic capacity to spearhead an economic development process in FATA in specific and Pakistan in commonplace.4. Sequence. The research paper haws been divided into pursuance m ajor(ip)(ip)(ip) lineaments-Part IPakistan Economic ReviewProblems of Pakistani EconomyPart IIFATA EconomyAgency wise economic potentialRecommendations to rectify FATA Economyc. Part-IVbudgetary AllocationRecommendations for sector tonic and amalgamate Budgetary AllocationPart IIIEconomic Developments Models for Development of FATAReconstruction Opportunity Zones (ROZs)FATA Sustainable Development Program (SDP)GCC EU Friends of FATA origin (FFF)Recommended FrameworkPART I5. Pakistan Economic Overview. Pakistans economy has been fluctuating passim its 55 years history. The deplorable state of the economy was the result of many a(prenominal) years of economic mismanagement and imprudent economics policies of the successive organizations. The sad events of September 11 and their aftermath further exacerbated the already difficult rising situation on the global economic scene1.6. Problems of Pakistani Economy. some of the major ones bePolitical Instability. In Pakista n governance is characterized by ambiguous policies, ineffective implementation, limited accountability to clients, regulatory overhangs, and failure of the legal dust to provide timely recourse.Lack of Long Term Planning. Despite the validation of planning commission in 1953, there has non been any meaty planning. Futuristic needs/trends use up not been catered for by so called planners. nationalization versus Privatisation. In the past 60 years the country has oscillated amidst the twain options and even now the privatisation drive is marred by personal interests and escape of transp bency.Bad Governance. Usually competent/ dutyal people harbour not governed the state-controlled industries. This had pronounced effect on overall poor output signal of these units.Poor Banking System. Our banking ashes has not supported the growth of economy. Money of barren people deposited with these banks has been loaned to influential people that now stand defaulted.Large clientele Deficit. In 2009, 80% of our imports were financed by our exportation earnings. This ratio has come d avow to only 50%, it may go up to 60% nevertheless a gap of 40% of financing needs in order to keep with the import level still exists2.Fiscal Deficit. Pakistans government takes outdoor(a) 20% of national income as its own. 80% is left in the hush-hush sphere and 20% in the hands of the government is spent on defence, debt servicing, development on education, health, general administration etc3.Declining Foreign handle. In 1990, Pakistans mete out was 0.2% of the world consider. After 20 years it has come down to 0.12% in a very buoyant world economy4.Pakistan is stuck with only a few commodities textiles, leather, rice, sports, goods and the surgical goods.Poor Economic Indicators. Pakistans indicators in literacy, infant mortality, in access to weewee supply, master(a) enrolment ratios ar more than like to Africa rather than to the countries of similar per capita inco me.Energy Crisis. Our persistence is at a impairment that they get the orders from foreign countries but they cannot execute the orders because there be electricity outages and in addition of cost of toil becomes higher than international competitors. rightfulness and Order Situation. In 2007, Pakistan was one of the most favourite countries among the international investor conjunction5.However, in ii years time we have missed that gravy holder due to alarming law and order situation in the country. imperfect Taxation System. Indirect taxes account for about(predicate) 80 % of tax revenues, with virtually half of this coming from trade-related taxes6. This narrowness of the tax base can be traced to weak tax administration.Smuggling / Black Economy. Independent economic analysts opine an annual direct revenue loss of 25 jillion rupees (US$540 Million) to the government because of smuggle7.Export / Import Imbalances. This is usually over US$ 3-4 billion per annum. The rea son is large(p) product cost and our inability to convert cutting materials into finished goods8.Heavy External Debt. With over US$ 32 billion, as external debt, even our future economic development is at hazard9.Population Growth. This over hanging liability is a constant mischief to our overall economic growth. The effects of our economic growth be eaten outdoor(a) by the rapid growth of population10.Unrealistic Economic Policies. The absence of competent economist in planning departments of the government has adversely established the economic growth.Human Resources Management. Pakistan expenditure on social development sector has remained poor. The talent is going to foreign countries due to mismanagement11.Exports. The Rapidly evolution competition in international markets coupled with improved quality standards has resulted in substantial decrease of share in foreign trade.Poor Literacy Rate. Pakistans primary and secondary school enrollment rates are considerably lo w. The come adult literacy rate is less than 50%.12.PART IIFATA thrift7. The sylvan economy is chiefly pastoral, with agriculture practiced in a few productive valleys. The local economy operates on an informal rigation garment and is undocumented, since few laws providing for the regulation of economic activity have been extended just about households are engaged in primary-level subsistence agriculture and livestock rearing. Some are involved in business and trading, or unwrap employment in the small-scale commercial and industrial sectors. Those unable to earn a life-time at home migrate to other move of the country or travel ab itinerary in search of work. Women take active part in agri cultural activities, collect fuel wood and fetch weewee, in addition to attending to household work and family duties.8. floriculture13Small landholders crystallize up the majority of farmers and engage in agriculture mainly at the subsistence level, characterized by the underutili zation of land, poor productiveness and risk- adverse behavior.Only 7 per cent of the total geographic subject area of FATA is cultivated, with another 1 per cent put down as fallow, accounting for roughly half of all potentially cultivable land.Overall production and per-hectare yields in FATA compare poorly to figures for the country as a intact. The yield per hectare for wheat in FATA is just 38 per cent of the national.9. Poultry and reststock14Livestock and poultry are an essential division of the rural economy, providing income support for most farm households.The size of the herd depends on the households capacity to purchase animal feed in the winter and organise months, when essential fodder is thin on the ground.Some 4.9 zillion ruminants and 6.7 million birds are world reared across FATA.Fish do work is practised mainly at the household level on wasteland and marginal lands.10. Commerce and Trade15Commerce and trade form a major source of reenforcement in the tribal areas, second only to agriculture.Historically, and particularly during the 1980s, the region was a major centre for opium production and trafficking. Today, the journey trade with Afghanistan provides employment for the local population.11. Industry16Industrial activity is restricted primarily to small, owner-financed units, operating without government oversightSome mineral extraction is taking place in various agencies, using outdated technology and antiquated methods.Many taste employment as short-term unskilled labourers or enlist in the local security system and paramilitary forces. Those who are able to travel demote work in cities across Pakistan as well as in the Middle East.There is considerable local expertise in the fabricate of weapons but production is not regulated and export to the settled areas is illegal.12. Forests17Forests are an integral part of the rural economy, playing a significant usage in local livelihoods particularly in the mountainous regi ons.The forest dispense is declining rapidly as a result of timber extraction, prolonged periods of drought, screwball grazing, and pressure from fuel wood and fodder collection.Over-exploitation has as well affected the pictorial regenerative capacity of forests. With forest resources rapidly disappearing, the environmental services provided by natural ecosystems have also diminished.Rangeland and pasture areas are in a crushed state, partly from overgrazing but also because of extended periods of drought.13. Economic Potential Available. A variety of economic potential exists in the tribal areas depending upon the population, land, geography, and vicinity of the Afghan border. These provide be covered as per the existing administrative set up of the areas.The sanction wise economic potential is covered in succeeding pqrqraphs18-15. Dir, Swat, Bajur and Chitral Agency. As per the old records the major source of economy has been Agriculture. Where so ever agriculture is possi ble majority of the population depends upon agriculture, but the stimulate is not sufficient to sustain the complete population consequently scrap and certain other items have to be imported from other parts of the country. The second major source of economy has been cattle farming. It is still plebeian in all the highland country and people involved in this profession spend a nomadic life shifting their manse in search of pastures and with the severity of weather. Mineral to include Iron and atomic number 29 are also found in the Khashkar valley of Bajour Agency, these are being mined in certain areas and few villages are totally occupied in this profession. Inferior Cotton Carpets and Shawls are also made in these areas through which a number of families are sustaining their livelyhood. Forests have been another major source of income and have contributed in the overall revenue generation from the area. deodar cedar forests of upper Dir valley are a famous source of income to thousands of people. Although these are protected by Forest department yet certain rights have been secured by the local population to sustain their livelihood.16. Mohmand Agency. The Mohmand country comprises barren hills and a little of fertile alluvial plains between the doab of the rivers. Major produce is Grass, dwarf Palm, Firewood and charcoal. But this produce is meager enough to sustain the population therefore reliance of majority of the population is on trade through Khyber pall from Afghanistan. It has been replaced by smuggling of medicines, weapons and other electronic item of Afghan transit trade which passes through Khyber pass.17. Khyber Agency. The Khyber Pass is the great northern route from Afghanistan into Pakistan and India, date Kurram and Gomal Passes form intermediate communications. Agriculture has been the major source of sustenance overly trade. A limited cottage industry of gun manufacturing also exists in Bara area of Khyber Agency. Now a days s muggling through Afghan transit trade is the main stay of the economy along with drug trafficking and gun running. Cattle farming as a tradition have always been supporting the tribes in Khyber Agency. The Mullagori marble deposits are one of the largest marble deposits of the world. Other mineral deposits in Khyber Agency include soaprock, limestone, dolomite, ciliate, silica sand, barite, mica, and graphite. stain deposits are found in Mullagori, Sultan Khel, Ghundai Sarand and Loe Shalman. Soapstone is the second most important mineral of Khyber Agency. The major deposit lies 7 kilometres from Jamrud Bazaar. The mineral production figures for the year 2003-2004 include 7260 tons marble, 1,82,160 tons of lime stone, 1200 tons of soapstone and 110 tons of barite. Khyber Agency has a very low industrial base having only three industrial units of significance including the Bara Ghee Mills and two cigarette factories namely One More queen Factory and Tatara Cigarette factory with a total employment estimated at 525 persons. There are other small silk processing units at Alam Gudar Bara, which is basically a cottage industry.18. Orakzai Agency. Named on a pathan tribe inhabiting the Northern slopes of the Samana range and the adjoining valleys of Tirah. The major source of income is as per Khyber agency agriculture however a small industry of gun manufacturing also exists in the area. Poppy cultivation, drug smuggling has gained urge in these areas over the last two decades.19. Kurram Agency. The Agency has an area of about 1,278 square miles. Agriculture is the major profession in the area. Wherever water is operational the soil is highly productive. Major crops are maize, wheat, rice, barley and clover. Apples, pears, grapes, cherries, pomegranates, peaches, and a fruit peculiar to the Kurrram and Tirah, known as the Shalil also grow in abundance and are one of the huge income earning sources. It is said that famine is foreigner in Kurram. The agency is a ccessible from Kohat by the Khushalgarh Kohat Thal branch of the Railway and road link also exists. Forests of Blue Pine and Chinar contribute to the economy of the agency a great deal.20. North Waziristan. The agency comprises of four large and fertile valleys. These valleys are irrigated by the Kurram, Tochi and Gomal rivers respectively. The lands of the valley are extremely rich, and grow heavy crops of maize, rice, sugar cane, wheat. Agriculture is the major backbone of the economy however smuggling also brings a lot of cash in the agency. Forests of Mulberry, chinar, willow, gurgura and wild olive are also abundant on the slopes of the mountain which can be exploited to bring huge finances in the area. Fruit orchards of apple, smasher and peaches also contribute to the economy of the agency. Cattle forming is also a major source of livelyhood in Pashtoon tribes of the agency.21. South Waziristan. The lands which lie close to the numerous streams are well cultivated their ex tent is insufficient to produce grain for the whole population. Wheat, barley, rice, maize and millet are the chief crops these are often cut when blue jet for fodder, springing up again before the harvest. Fruit orchards of apple and peaches are also contributing in the economy of the area. The chief mineral product is iron, which is found and smelted in many places, especially in the hills above Makin. Forests include wild olive, gurgura and dwarf palm trees. Mats and ropes are made of the dwarf palm by the men and the women weave rough cloth from wool and blankets from goats hair. Cattle farming is also very common in many a tribes in the area specially the Ghilzai Powindas. Trade has also been a famous profession in the area due to the link through Gomal Pass. It still continues with an amalgamation of smuggling. In certain areas of the agency poppy cultivation has also been reported, which is being controlled now days.Recommendations13. The side by side(p) is recommended to f asten the rate of development work in FATA to ostentation its economy and bring it in line with the settled areas of Pakistan-Development Plan. The fundamental Government should allocate funds and provide loans to tribesmen organisations and individuals. The loans should be provided on nominal mark up rates and private and public sectors should be back up to assistant the tribal organisations to develop viable and resource generating economic ventures of their own19.Share in issue Finance Commission (NFC) Awards. NFC Award is establish on the population of each province. In view of governments drive to bring FATA into the national mainstream, it is imperative that it be included in the NFC Awards as a separate entity.Transparent Financial Management. A system of transparent monetary management should be evolved with participation of general public. The authority of auditor general should be extended to FATA and proper audit of accounts of all government departments should be carried out.Trade Sector. The international efforts for re-construction in Afghanistan and opening up of trade routes to CARs (Central Asia Republics) maintain great economic opportunities for Pakistan with an annual trade which may fetch up to one billion dollars. Creation of environments conducive to trade will greatly help in feeler of economic situation. quest measures will help in this move-Opening of Trade Routes. Formal trade routes between Pakistan and Afghanistan should be opened on priority e.g. Ghulam Khan Route between Miranshah and KhostCustom Regulations. Relaxed custom regulations to encourage legalization of informal (smuggling) trade.Tribal chamber of Commerce. The establishment of a Tribal Chamber of Commerce would enable the tribal traders to have better interaction with the national and international markets.Tribal National Bank. It should provide financial services, counselling and planning ability necessary to complimentary the tribesmen from the isolatio n of an economic island in which they had been living for centuries.Agriculture Sector20. Agriculture sector can provide a substantive base for economic development. Following measures are recommended in this regard Adopt the pocket area approach to focus on the production of specific crops in place production zones. repair water management practices by introducing efficient water use technologies, and constructing small dams, ponds and reservoirs.Reclaim cultivable wasteland through alter land agriculture. bring out the use of bio-pesticides.Irrigation network needs to be veritable by construction of small dams, check dams and channels.A land extermination system should be evolved on modern lines.Processing facilities should be provided to break proper packing and canning of fresh and dry fruit for international markets. engraft of wild olive trees with fruit bearing species. Fruit culture and off-season vegetables with unbosom fruit saplings and experts.Model fish farms hav e also been constructed to encourage locals to hold to the modern systems of enhancing their income.Forestry Sector21. Forestry sector needs to be explored for economic improvement in the area. Following steps are recommended to be undertaken-Launching of a conservation campaign for the forests.Encouraging plantation of new trees by provide of free saplings.Establishment of checks for smuggling of timber to Afghanistan.Modernization of timber industry in the area. supplying of attention to locals for olive grafting and plantation of oaks and chalghoza pines.Live Stock Sector22. Following steps are recommended in this regard Improve access to services, including animal health services.Increase the number of egg-producing(prenominal) livestock extension workers.Make feed and fodder widely available.Improve the condition and productivity of rangeland, in collaboration with research institutions and the forest department.Introduce new species of fodder, in collaboration with researc h institutions, farmers, tribes and herders.Enhance livestock production through traverse improvement.Set up trade facilities for farmers.Improve rural infrastructure and access to markets.Declare pocket areas for dairy production, with linkages to agro industry for marketing and service delivery.Ensure that savings and credit services are available to support micro enterprise and on-farm income generation activities.Enable farmers to improve marketing by providing information.Mobilise local communities, and establish linkages with public- and private-sector services for technical assistance and inputs. win and support the establishment of livestock- and poultry-based industry.Develop a database, carry out resource mapping and set up information system to assist in planning and monitoring.Conduct research into animal nutrition and breed improvement.Raise awareness about the importance of the sector in call of livelihood security, and lobby for adequate funding.Establishment of n ew veterinary hospitals and faux insemination centres.Setting up of government subsidized live stock markets.Provision of incentives in the form of easy loans.Establishment of food processing facilities for canning of meat.Minerals Sector23. FATA has great potential of mineral resources. In order to increase productivity in the digging sector and improve the quality of the product, following strategies will be adopted-Legal framework governing mining activities to cut through leasing, dispute resolution mechanisms and regulation.Increase the productivity of mines by adopting modern methods to encouragement quality and reduce wastage.Introduce new technologies through union ventures on the basis of public-private partnerships.Maintain a healthy workforce by up(p) safety develop emergency evacuation procedures.Improve the quality of world resources through intensive training.Following needs to be done to improve the situation in this sector-(a) To encourage tribesmen either in jo int ventures or lease agreements with public and private sectors.(b) The whole of FATA needs to be brought under geological survey mapping.(c) Special funds should for mineral geographic expedition and development on modern lines.i. Industrial Sector24. However, there is a great potential available for development of certain industries in the area which should be exploited by public and private sector. These include following-Construction material including cement.Decorative material including wood and marble products. self-renunciation related industries including manufacture of small arms and ammunition.Public and private sectors should be encouraged to set up small scale industries.The option of establishing clusters or pockets in industrial parks will be explored.To set up training centres within functioning industrial units, for marble processing, mining, light engineering or footwear manufacture.Organise local craftsmen into trade guilds for promoting best practice, calibrat ion and quality control.Set up a regulatory authority for formulating investment-friendly policies through dialogue with stakeholders.Strengthen infrastructure in the region, including roads, electricity and water supply. wield a regular dialogue with local tribes to promote investment.Short-term mining courses can be arranged by the mining department at the Peshawar University of Engineering and Technology.j. Tourism Sector25. Recommendations in this regard are as followsDevelop tourist facilities and services at selected locations.Facilitate private-sector involvement in the sector.Promote areas that already witness some degree of tourist activity.Encourage and facilitate inter-agency exchange visits and tours.Carry out research on the cultural and natural heritage of the area, and make this information widely available.k. Infrastructure Development. Following measures are recommended in this regard-Rehabilitate roads for better connectivity to strategic locations.Construct new ro ads in remote or underdeveloped areas to generate economic opportunities and improve security.Build new bridges and rehabilitate damaged bridges.l. Good Governance. Good governance is a key prerequisite for achieving the goals set out in the economic development of FATA. Governance system is participatory, supported by a robust legal framework with active public consultations.m. Law and Order. Another basic requirement for socio-economic development is human beings security. This is of course a critical issue for the people but security is equally important to service providers and government officials who travel to and work in the area. In this regard following is recommended26Reinforcement of the Frontier Corps with more manpower, modern equipment, mobility, intelligence, higher salaries and training in counterinsurgency.Properly trained, better provide and reformed FATA police and Khasadar Force.Fencing of Pak-Afghan border with monitoring sensors Afghanistan and selected cro ssing places. bod wise handing over of areas to FC and local Law Enforcement Agencies.n. Conflict Resolution. The people of FATA have long been accustomed to use of violent means for settling of divergence between the members of different tribes and clans. Although an indigenous mechanism for conflict resolution already exists in the form of the jirga, there is perhaps a need to find ways to prevent conflict from occurring in the first place. In this connection, it is worth exploring the possibility of a set of rules and regulations, arrived at by mutual consensus, to serve as a basic charter or code of deliver for peaceful coexistence.o. Private Sector Participation. The private sector has to play a crucial role in achieving the targets of economic development in FATA. The government must improve the framework conditions for the development of the private sector, and encourage public-private partnerships.Budgetary Allocation14. Each year, the federal government sets aside a con tain allocation, known as the Annual Development Programme (ADP), intended only if for development expenditure. This allocation, disbursed according to province, region, sector or project, is part of the federally funded pubic Sector Development Programme (PSDP).FATA receives an annual share of ADP funding. In addition to the ADP, the PSDP provides separate funds for programmes and projects in various agencies and FRs, and contributes to donor-assisted initiatives15. Sector-specific allocations from the ADP are made at the Civil Secretariat FATA, based on priorities and needs. Although the development budget is not intended to finance salaries or recurrent liabilities, in practice this is often the case. Insufficient allocations for repairs and maintenance, meanwhile, mean that some of these costs are also met through the development budget27.Sector Wise and Consolidated Budgetary Allocation.16. Details are attached as Annexure A.ECONOMIC emergence MODELS FOR FATA17. ROZ (Reconstr uction Opportunity Zones) Model28. ROZs would be a specific type of export processing zone, and thus part of a world-wide network of free trade zones