Balochistan budget 2017-18 envisages total revenue of 276.4 billion with federal transfers accounting for 230 billion rupees, 83.3 percent, while reliance on its own resources was budgeted at 12.4 billion rupees, around 5 percent. The small reliance on its own resources places Balochistan once again at the bottom compared to the other three provinces in terms of reliance on own resources. However, when seen in the context of the ongoing insurgency in that hapless province as well as the sustained failure of successive federal and Balochistan governments to find a lasting political solution, the province’s inability to reach its potential in terms of generating productive activities or exploiting its vast natural wealth, with the possible exception of natural gas, is understandable.
Reko Diq, with gold and copper reserves estimated to be the fifth largest in the world amounting to over 50 billion dollars, remains un-mined more than a quarter of a century after these deposits were first discovered. This failure is attributed to the challenge by a subsequent Baloch government of a signed contractual agreement with a foreign company. In this context it is relevant to note that the Reko Diq project had a projected cost of 3.3 billion dollars – money that the Balochistan government clearly does not have access to given that its entire budget for the forthcoming year is less than that amount. However the federal government has access to this kind of resources and Ishaq Dar issued Eurobonds and sukuk of more than the sum that is required to launch the project indigenously. Pakistan may not have the mining experts but had the federal and Baloch government sent Pakistani students to acquire the requisite degrees from foreign universities this task too would have been completed by now. One would hope that those studying mining in our universities would be selected and given scholarships to study abroad to acquire the necessary expertise.
Balochistan has been often defined as the neglected province and accounts for the poorest level of social and physical infrastructure with high infant and mother mortality rates, lowest literacy rates and poor health facilities. Be that as it may, there are some mega development projects completed and under way in Balochistan including the deep sea port at Gwadar (under construction), construction of Mirani dam (completed) as well an oil refinery owned by Byco International with a capacity to refine 120,000 barrels a day with a power station next to it, cement and marble factories as well as a ship breaking yard.
The budget allocation of 45.8 billion on education, which many regard as a positive outcome of the Balochistan government’s decision to prioritise education expenditure. However, a whopping 143.6 billion rupees is earmarked for salaries and pensions – 44 percent of the entire budget. While the federal government announces a raise in salaries and pensions which are followed by the provinces yet this statistic is simply unsustainable and the proof of that is in the deficit budget of 52.1 billion rupees.
How does the government of Balochistan intend to meet this deficit is not clarified; however, it would be safe to assume that borrowing would be the way forward. The intent to set up Balochistan bank was noted in the budget speech; however, one would hope that the Balochistan government has learnt some valuable lessons from the operations of banks set up by the other three provinces and takes appropriate mitigating measures.