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Sluggish economy

By: Editorial Team
Published: January 16, 2017
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Being the representative of the whole country, the PML-N government should have shown magnanimity and announced a special economic package for KP’s business community, even if it is at daggers drawn with the provincial government

The general trend of KP’s economy has remained sluggish even after the recent improvement in the law and order situation and a decline in the activities of non-state actors.

However, growth can be seen in the retail and services sectors only. This slight improvement can be directly attributed to the complete stagnation of such activities under the previous two governments. Nonetheless, there has been no substantial investment in the manufacturing sector due to the dismal performance of the current provincial government, which failed to develop energy projects and industrial infrastructure.

On one hand, the provincial government and its leadership criticises the Federal and Punjab governments for their obsession with mass transit projects, but on the other, they are trying to initiate similar ones for Peshawar. The provincial government formed the Khyber Pakhtunkhwa Economic Zones Development and Management Company, in place of the Sarhad Development Authority (SDA) to rejuvenate the struggling industrial sector, but it failed to deliver even after the government spent huge amounts on the newly hired staff. Furthermore, most of the selections in the Management Board were made on personal likes and dislikes rather than on merit.

The Sarhad Hydel Power Development Organisation (SHYDO) was transformed into the much hyped Pakhtunkhwa Energy Development Organisation (PEDO) with the induction of highly paid staff, but unfortunately it also failed to deliver.

The confrontational stance and direct involvement of the KP government in ‘dharnas’ (protest sit-ins), against the ruling Pakistan Muslim League (N), intensified tensions with the federal government. There is almost complete mistrust and zero cooperation between them.

The federal government initiated a mass transit program – the green line – for Karachi, even though Sindh is being governed by its political opponent. Being the representative of the whole country, the PML-N government should have shown magnanimity and announced a special economic package for KP’s business community, even if it is at daggers drawn with the provincial government.

Zero efforts, by both the provincial and federal governments, in controlling the menace of illegal trade and smuggling have compounded the woes of legitimate businesses. Smuggled goods are being freely sold in the infamous Karkhano Bazaar in Peshawar.

The trend of the business community fleeing the province due to the poor law and order situation has diminished and people who shifted to other parts of the country have now started coming back, because they faced hardships in settling down.

However, no significant interest is being seen in the manufacturing sector due to a variety of issues, including a strained relationship with Afghanistan, lack of interest of the provincial government in the industrial sector, uncertainty created by the Federal government’s very favourable stance for Chinese businesses in the backdrop of the CPEC, a reluctance of banks to finance projects (they still consider most parts of KP as Red Zones), the inability of the provincial government to secure new industrial gas connections and the poor power supply.

Our province has been suffering right from the day of the invasion of Afghanistan by the former Soviet Union in 1979. An enabling environment for sustained economic growth has not been available since then. Poor law and order has hampered the development of industries, which would have created job opportunities for the youth, many of whom are eventually recruited by non-state actors.

However, KP has huge hydel power generation potential, hydrocarbons, minerals, marble and indigenous products such as a variety of fruits and honey. It is the biggest contributor of manpower all over the world, especially the Middle East. Many workers are willing to come back provided jobs are available. We have a variety of tourist destinations ready to be developed. It has a natural geographical advantage of being at the gateway of Afghanistan leading to the Central Asian States. If the leadership of our province recognises these strengths and focuses on converting these assets into jobs, there is no doubt that this province can become economically stronger than any other part of the country.

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Editorial Team
The Editorial team of Bol Narratives