EDITORIAL: The Balochistan government has presented a budget with total receipts of Rs1028 billion and expenditures of Rs991 billion, which have been revised downward slightly to achieve a higher cash surplus of Rs51.5 billion.
The smallest province by population and the largest by area has utilised its entire development budget of Rs 219 billion for FY25 — a first in the province’s history. The development budget for FY26 is proposed at Rs350 billion.
The fiscal austerity being pursued by the federal government includes extracting a “pound of flesh” from the provinces in the form of surpluses — a burden that is taking a heavy toll on Balochistan, the least developed province in the country. Budgetary allocations are primarily based on population size, with only minor adjustments for inverse population density. With a sparse population, Balochistan’s budget allocation is perennially low.
It’s a chicken-and-egg problem. The province needs infrastructure development and investment in social sectors. Due to low population density, the per capita requirement is high. Without adequate spending, growth in the province remains stunted.
And with low growth, compounded by a weak law and order situation, there has been little to no immigration from other provinces — in fact, settlers have been leaving Balochistan for years, primarily due to security concerns. To reverse this trend, better economic opportunities for local residents are essential — and for that, higher development spending is required. Balochistan is rich in minerals. Pakistan’s political and military leadership sees the country’s future success in the extraction of minerals and rare earth metals — most of which are located in Balochistan.
Reko Diq is believed to be a game changer for Pakistan. And indeed, the project is finally progressing in the right direction. However, it cannot serve as a harbinger of growth if it develops in isolation, like a fortress in the middle of nowhere. True development lies in building vibrant cities around such projects. That’s what’s missing — and without it, many other projects will face similar hurdles.
In the past, Balochistan also relied on royalties from oil and gas fields, which are now declining due to falling production. New explorations and productions are limited, owing to a range of factors — all of which are tied to the broader issue of development and investment in the province. Historically, gas from Balochistan has largely been used to fuel the rest of the country, with only a small share allocated to the province itself.
Other provinces in Pakistan are densely populated and need some degree of population redistribution. Ideally, this would involve incentivising the movement of people to Balochistan — which in turn requires a skilled workforce and private capital investment. And, above all, there is need for a suitable constitutional arrangement with a sunset clause to ensure that the Baloch do not become a minority as regards their share in the provincial or national legislatures. But that cannot happen without an environment that is characterised by good infrastructure, improved security and the needed political sagacity to address their reservations as regards massive influx of people from other provinces.
The private sector is unlikely to take the lead. This is the responsibility of the government. And for that, better budgetary allocation is essential. While the federal government is fiscally constrained and seeking additional resources, provinces are expected to generate their own revenues. Better-developed provinces — like Punjab and Sindh — may be positioned to do so. But applying the same expectations to Balochistan creates an uneven playing field.
The ongoing Iran-Israel conflict has further heightened Balochistan’s strategic importance. This is the right moment for the authorities to seek greater funding — both domestically and from international partners — to enable the development of Balochistan and address the longstanding grievances of its people. Without bringing Balochistan up to pace, sustained economic growth in Pakistan will remain a distant dream.
Copyright Business Recorder, 2025
Comments
Comments are closed.