CPEC and Balochistan

Problems of Balochistan

Abstract

In the age of economic integrity and changing geopolitical environment,
Pakistan is keen to strengthen itself domestically and bring much needed
change in Balochistan. The Government of Pakistan has made a number of
efforts to reach out to the people of Balochistan. Especially, after the launch
of the China Pakistan Economic Corridor (CPEC) in 2015, socio-political
stability of Balochistan has become crucial for political leadership and
policy makers. The historically neglected province of Balochistan, lacks
socio-economic development, communication infrastructure and
employment, which have impeded social, political and economic progress of
the province. In order to overcome its challenges, economic development,
social and political stability is necessary. The paper, by focusing on the
challenges being faced by Balochistan, will attempt to analyse that how the
CPEC would be a ‘game changer’ for the province. It explains that how the
implementation of the CPEC projects in the province will help to address
the challenges being faced by the local population and how they would be
able to overcome future challenges by ensuring stability.

Keywords: Balochistan, CPEC, Political Instability, Human

Development, Natural Resources, Employment.
Introduction
China has emerged as a reliable strategic partner of Pakistan in the
international arena. It can be argued that China’s stated foreign policy
principle of peaceful coexistence has worked in favour of a mutual
beneficial relation between Pakistan and China. China not only achieved
extraordinary economic growth but it has emerged as one of the most
influential players in the global affairs. It is determined to sustain its rise and
wanted to share the socio-economic benefits by connecting with the rest of the world. In 2013, to fulfil this dream, the Chinese President, Xi Jinping,
came up with a visionary plan “One Belt One Road (OBOR)” initiative.
Through OBOR, China is seeking to reinvent the ancient Silk Road while
emphasising “mutual trust, equality, inclusiveness, mutual learning and win-
win cooperation.”1
The CPEC falls within President Xi’s grand scheme and
is seen as a crucial link between the “Silk Road Economic Belt” and “21st
Century Maritime Silk Road,” which collectively form the OBOR. Beijing
believes that forming close ties with its neighbouring countries and ensuring
stability in the region are essential for the economic progress. China has
always recognised Pakistan’s significance in its rise and realises that
stability in Pakistan serves China’s own interests.
Pakistan is confronted with various internal challenges and it
considers the CPEC as a game-changer in a bid to revive its fortune. The
CPEC, which is considered as a “national project” is going to be a fate
changer for all provinces, especially Balochistan as it is going to connect
Pakistan with the rest of the world through Gwadar port. Therefore, it is
necessary to ensure socio-economic development and peace and stability
in the province to reap the benefit of the CPEC for the entire country.
The government has realised the need to address the concerns of the
people of Balochistan. It can be argued that the future economic
opportunities and the political attention, the CPEC has brought towards
Balochistan, can potentially bring prosperity in the province.
This paper will discuss the political disputes and social grievances
prevalent in Balochistan. It will also analyse the efforts by the government
and the hurdles the Pakistani authorities have been encountering to ease the
tensions in the province. Development challenges such as unemployment
and water scarcity will also be discussed in detail. The primary focus will be
on the potential impact of the CPEC in bringing about socio-economic
development, peace and stability in the process. The impact of the CPEC
will be projected with the help of relevant reports and case studies.

Problems of Balochistan

Non-inclusive policies, extractive institutions, fragmented political structure
and negligence of national and local leaders towards the concerns of the
locals have kept the province under-developed According to a 2016 United
Nations Development Programme (UNDP) report, around 71 per cent
people in Balochistan live in multidimensional poverty, while this figure is
much lower in other provinces. The Multidimensional Poverty Index (MPI)
is a broad measure of understanding and measuring poverty that considers
deprivations in education, health and standard of living along with income
and wealth.2 Given the lack of state infrastructure in the province, the
findings of this report came as no surprise. According to Rotberg, lack of
state infrastructure is the inability of the government to impose its authority
and deliver stability.3
Strong state infrastructure is required to establish the
institutions, which serve the interests of the state. These institutions
contribute to building a unifying identity among the people of the region. In
their absence, the social and political landscape of Balochistan has been
deteriorating for decades.
Over the past few decades, Balochistan’s share in the Gross Domestic
Product (GDP) has also been declining, in comparison with other provinces.
As per the findings of a report in 2005, the overall literacy rate in Pakistan
was 47 per cent whereas, in Balochistan, the overall literacy rate was only
26.6 per cent. The province also lags behind in other social development
indicators such as primary education enrolment rate, access to sanitation and
safe drinking water.4
Pakistan’s largest province is also the least urbanised
as compared to the rest of the country. Most of the population of
Balochistan lives in rural areas but only 25 per cent of the villages have
electricity. In contrast, 75 per These figures clearly suggest that Balochistan is the least developed
province of the country. However, the lack of progress is not due to the
dearth of resources. The province is rich in natural resources. It
contributes more than 40 per cent to the country’s energy requirement in
the form of electricity, natural gas and coal. Natural gas is the country’s
primary energy source and accounts for 50 per cent of the overall energy
consumption. Most of it is produced in Balochistan and its overall share
of country’s natural gas reserves is 68 per cent. Despite possessing such
a large share of natural gas, only four districts in Balochistan receive gas.
Sui gas was discovered in 1953 and it was supplied to Rawalpindi in
1964. Balochistan’s capital, Quetta, received it 33 years after the
discovery.6
Furthermore, the well-paying jobs in Balochistan’s gas
industry have also been taken by people from other provinces.
The resentment against the state has grown over these issues. Many
locals have warned against further exploration or development in their
province unless they are taken into confidence and given rightful share.7
Along with social and political differences, exploitation of Balochistan’s
natural resources and lack of economic incentives for the locals are also
a major factor behind the belligerent voices coming out of the province.
Dealing with such concerns has been problematic for successive
governments. As population growth and industrial expansion carries on
rapidly in other provinces, they face an increasing demand of energy. To
facilitate the growth in those provinces, the government has limited
options to generate energy from resources that are available in
Balochistan. Therefore, the energy crisis that has gripped the country can
potentially fuel further tensions between the central government and
Balochistan.
Lack of human development opportunities have also contributed to the
rising unemployment in Balochistan. As a result of this rising unemployment,
there is likelihood that uneducated youth could fall prey to extremist and
terrorist organisations.8
It is estimated that out of nearly 25,000 students
who graduate in Balochistan every year, only 2,000 are able to secure jobs for themselves.9
Poverty and unemployment are identified as the main
factors behind their discontentment. If one compares Balochistan with
Sierra Leone it could be argued that creation of employment has positive
impacts on stability in fragile territories. It has been argued in literature that
the civil war in Sierra Leone was a direct impact of unemployment amongst
its youth population. The importance of youth employment can be
understood from the statement of Sierra Leone’s president in 2006, he stated
that “the level of unemployment and the idleness of our youth have a
propensity for social disenchantment. For us, employment is synonymous to
peace.”10
The country’s weak economic performance and poor governance has
led to unrest, which was followed by a devastating civil war that lasted
for almost a decade. In the early 1990s when the war broke out, the
standard of living in Sierra Leone was the second lowest in the world.
The conditions made it possible for the rebels to recruit youngsters, in
large numbers, to revolt against the state.11 Much of the post-conflict
recovery and resurgence of Sierra Leone’s economy has been attributed
to the prioritisation of job creation. Both the International Labour
Organisation (ILO) and World Bank have reported that creation of
employment plays a positive role in promoting stability.12 It is asserted
that employment decreases the incentives to indulge in conflicts.
Furthermore, once the legitimacy of the state is established, the
institutions can work more effectively. This generates further economic
activity and reduces social and political instability.
Sierra Leone is considered as one of the least developed countries in
the world. However, its total unemployment and youth unemployment
rates are lower as compared to Pakistan. In Pakistan, the total
unemployment rate is five per cent, while the youth unemployment rate. is 7.7 per cent.13 Pakistan faces an urgent need to address this challenge
as the number of entrants in the labour force continues to rise every year.
Balochistan, being the most volatile province and having a large
proportion of unemployed youth, is in much need of development and
economic opportunities. The government needs to take serious measures
in order to ensure that resentment amongst Baloch youth does not reach a
boiling point.
Potential Benefits of CPEC
In recent years, to the credit of Government of Pakistan’s initiatives, the
security and political environment has improved significantly in
Balochistan. According to the Provincial Home Department’s report in
2015, there was 50 per cent reduction in terrorist attacks and target
killings in Balochistan in the last two years.14 The state has successfully
encountered external and internal threats and has managed to strengthen
its control over the affairs of the province. The projects under the CPEC
will be instrumental in consolidating these efforts.
If the initial phase of development goes smoothly then the environment
will be more supportive to develop political institutions, which the province
direly needs. According to Francis Fukuyama, economic growth cannot be
attained until and unless the right institutions are in place to organise a
society. Despite being rich in natural resources, countries in Africa are much
poorer than those in Europe. The reason for this is the difference in quality
of governance and the nature of economic and political institutions.15 The
CPEC can be decisive in shaping a political structure that can facilitate
economic growth and social order in Balochistan.
It is important to point out that the CPEC is not confined to economic
collaboration between China and Pakistan. Both the states have mutual
political and strategic interests in the region. China wants to bring
stability in Pakistan as it can augment China’s efforts of becoming a is 7.7 per cent.13 Pakistan faces an urgent need to address this challenge
as the number of entrants in the labour force continues to rise every year.
Balochistan, being the most volatile province and having a large
proportion of unemployed youth, is in much need of development and
economic opportunities. The government needs to take serious measures
in order to ensure that resentment amongst Baloch youth does not reach a
boiling point.

Potential Benefits of CPEC

In recent years, to the credit of Government of Pakistan’s initiatives, the
security and political environment has improved significantly in
Balochistan. According to the Provincial Home Department’s report in
2015, there was 50 per cent reduction in terrorist attacks and target
killings in Balochistan in the last two years.14 The state has successfully
encountered external and internal threats and has managed to strengthen
its control over the affairs of the province. The projects under the CPEC
will be instrumental in consolidating these efforts.
If the initial phase of development goes smoothly then the environment
will be more supportive to develop political institutions, which the province
direly needs. According to Francis Fukuyama, economic growth cannot be
attained until and unless the right institutions are in place to organise a
society. Despite being rich in natural resources, countries in Africa are much
poorer than those in Europe. The reason for this is the difference in quality
of governance and the nature of economic and political institutions.15 The
CPEC can be decisive in shaping a political structure that can facilitate
economic growth and social order in Balochistan.
It is important to point out that the CPEC is not confined to economic
collaboration between China and Pakistan. Both the states have mutual
political and strategic interests in the region. China wants to bring
stability in Pakistan as it can augment China’s efforts of becoming global power. Security concerns have halted development and deprived
Pakistan from foreign investments in the past. The willingness of the
Chinese businesses to invest in Pakistan has provided relief to the
country and also an opportunity to address domestic challenges.
Dealing with the wide-ranging problems of Balochistan has been a
daunting task for successive governments. The political situation in
Balochistan has always been volatile and an impediment to economic
growth of the country. The people of Balochistan complain that they have
been marginalised and deprived from their fair share by the government. To
effectively resolve their issues, it is necessary that the two sides develop
greater understanding. Better connectivity, provision of economic
opportunities and development of state infrastructure will lead to an increase
in engagements between the locals and the government. Thus, the CPEC is
a vital soft power tool for consensus building in the province.
International Governmental Organisations (IGOs) and Non-governmental
Organisations (NGOs) have played effective roles in bridging the gaps
between the state and society across the world. IGOs interact with states
and take measures to align state policies with the international norms.
They also provide technical support in formulating effective policy
measures. On the other hand, NGOs act as pressure groups and push
states to take socially responsible initiatives. They are involved in
monitoring human rights norms, advocate policies and offer alternative
platforms for political participation. Unfortunately, their involvement in
Balochistan has been very limited due to lack of security and access. As
Balochistan is expected to be at the heart of the CPEC, there is likelihood
that such organisations will expand their operations in the province. The
economic corridor, therefore, will open up possibilities for social
integration and inclusive politics.
Around US$35 billion have been allocated to energy projects under
the CPEC. By 2020, over 10,000 megawatts of electricity is planned to
be generated through its ‘early-harvest’ projects.16 This addition in the
country’s power generation capacity will be vital in meeting future
energy needs as the current shortfall has crossed 6,000 megawatts.17 Along with the non-CPEC projects, like Balloki Power Plant, Neelum-
Jehlum hydropower plant and extension of Tarbela Dam, the future
energy demand is expected to be well matched. Both the CPEC and non-
CPEC projects are spread throughout the country, which means that
provinces, other than Balochistan, will have greater energy generation
capacity. This would not only reduce burden on the resources of
Balochistan and prevent them from being exploited but also increase the
allocation of energy for the province.
The CPEC’s energy projects will turn out to be beneficial in many ways.
Firstly, they will reduce the political tensions, which are based on the
perception that the Baloch soil is exploited to serve the interest of others.
Secondly, greater provision of electricity would support economic activity
in the province and also improve the standards of living in its rural areas.
And thirdly, the coal power projects that are being developed in Hub and
Gwadar will create employment opportunities for the local population of
Balochistan.
Gwadar is regarded as the cornerstone of CPEC. The construction of
the Gwadar port began in 2002, which triggered the development of the
projects such as Makran Coastal Highway (N10) and M8 section of
motorway that now links the port city with Sindh. Since becoming
operational, the port has handled more than 6 million tonnes of import
cargo.18 Since 2002, developments in Gwadar have already spurred
economic activity in the province and with the CPEC, the city can
become a regional hub. Other developments in Balochistan under the
CPEC includes the expansion of Gwadar port, construction of inter-city
highways and Special Economic Zones (SEZ). Balochistan is the least
connected province of the country. With the materialisation of these
projects, Balochistan has the potential of becoming a domestic and
international trading hub. The long-term plan of the CPEC runs till 2030,
and there are further projects in the pipeline that will complement the
current ones. This will ensure consistent growth in the province and the
benefits will be extended to greater parts of Balochistan. The land of Balochistan is also rich in other natural and mineral
resources like copper, uranium, iron ore, marble and gold. However,
Balochistan lags behind other provinces because much of its resources
and markets are untapped. Greater connectivity brought about by the
CPEC will support in the development of new industries and markets.
The most persistent and enduring grievance of the local population
against the central government is that they have never been adequately
compensated.19 The devastating effects of extractive political and economic
institutions as discussed by Daron Acemoglu in his book Why Nations
Fail are clearly recognisable in Balochistan.20 The CPEC has the
potential of delivering economic prosperity to Pakistan’s poorest and the
neglected province. It will not only address the grievances of the local
population but also give them the incentives to integrate socially and
politically in order to overturn their economic woes.

CPEC and Water Security

Scarcity of water is emerging as one of the most pressing concerns for
Pakistan. According to the World Resource Institute, Pakistan ranks
amongst the top five countries which are confronted with severe water
stress and poor availability of sanitation and safe drinking water.21 This
will have implications for both, economic growth and regional stability,
as countries in Pakistan’s neighbourhood are also dealing with severe
water issues. A report prepared for the US Senate has warned that there
could be severe tensions in the region due to water shortage and the
resulting impacts.22 In order to curtail such an alarming situation and
secure the future of millions of residents, the water crisis has to be
brought on top of provincial and central governments’ agenda. Amongst Pakistan’s provinces, Balochistan faces the greatest risk
posed by water crises in the country. Growing population size and a
period of drought from late 1990s to mid-2000s has contributed
immensely to desertification in the province. Most areas of Balochistan
rely on ground water but that has depleted sharply due to added stress in
the absence of alternative sources and increased demand. According to a
statement made by the Chief of International Union for Conservation of
Nature (IUCN), Balochistan, during a seminar held at Quetta Press Club
in 2016 pointed out that earlier, water would be available a few feet deep
but now it has to be pumped out from more than 800 feet below the
surface.23 Thus, access to water has become limited and costly for a large
number of people in Balochistan.
Water scarcity persists in the neighbouring countries of Pakistan as well.
Iran and Afghanistan, which border Balochistan, have also witnessed their
economy suffering from water shortages. On the other hand, the Gulf
countries like United Arab Emirates (UAE) and Saudi Arabia have been
investing in desalination plants and are currently well capable to match their
requirements. Since the signing of the initial agreement of the CPEC in
April 2015, further investments under the umbrella of the CPEC have been
pumped in the country. It is reasonable to expect that the CPEC will also
bring investments that will seek to generate water supply for the city of
Gwadar. China ranks fifth in the world, when it comes to installed
desalination capacity and is pursuing further projects to cater for domestic
demand.24 The Chinese investors can look at Gwadar as a worthwhile
option for installing desalination plants. The high solar energy potential of
the area could allow for the development of solar powered desalination
plants like in the UAE, which will be less costly to operate and, therefore,
generate greater profits.
Pakistan is already water-stressed country and is also going to be
severely affected in the future by the changes in the climate. The recent
altercations with India over the Indus Water Treaty have also created
uncertainty regarding its main source of water. As suspected by the report prepared for the US Senate in 2011, water insecurity is well and truly
becoming a serious threat for regional stability. For China, regional stability
is one of the main foreign policy objectives while stability within its
regional ally is in its own national interest. Therefore, it is reasonable to
expect that the CPEC will be extended to resolve Pakistan’s water crisis.
Construction of the two dams under the CPEC has already started in
Gwadar whereas, the federal government has raised allocation of the Public
Sector Development Programme (PSDP)’s water development project funds
for development of multiple projects in Balochistan.25

Agriculture Sector

Agriculture is the largest sector of Balochistan’s economy and a leading
employment generator in the province. The average share of agriculture in
Balochistan’s GDP, in the last 10 years, has been 34 per cent.26 However,
the depletion of water resources and shortage of water storages and
irrigation facilities have hampered the growth of this vital component of the
local GDP. Unsustainable techniques and a rapidly rising population are
aggravating the problem. As the CPEC related investment pour in the
province, more people are expected to arrive in Balochistan, which will
place further stress on the water situation. There is an urgent need to build-
up Balochistan’s capacity to meet its present and future needs.
The CPEC needs to be complemented with government initiatives to
restore the progress in the agriculture sector. Failure to do so will also
have adverse effect on the CPEC’s contribution in the province. A large
number of local labour force being trained to work in agricultural
activities. Many do not possess the skills for the jobs currently being
created under the CPEC. If farmers are not supported adequately, they
will lose their livelihood and that would bring about social and political
repercussions. The Government of Balochistan has taken notice of the
looming crisis but so far its efforts are falling short. Nevertheless, the CPEC can itself play a major role in boosting the
agriculture sector of Balochistan as it produces a variety of fruits and also
boasts a huge potential in fisheries. Better access and connectivity through
the CPEC will attract investment in this sector as well. The completion of
the corridor will open up new domestic and foreign trading opportunities for
farmers and fishermen. Export of Balochistan’s agricultural products will
not only improve the earnings of the locals but also provide much needed
relief to the government through foreign earnings. Therefore, it will be
highly encouraged to facilitate development of agriculture sector in
Balochistan.
The city of Gwadar has its own water-related issues. After a nearby dam
went dry a few years ago, the small population currently, residing there has
faced many difficulties. Its demands are being inefficiently met by tankers
carrying water from other parts of the country.27 A city that has been
dubbed as the future trading hub of the region must have a sufficient and
viable supply of this basic human need.
Ensuring the Success of CPEC
The success of the CPEC will heavily rest upon its ability to provide jobs
and enhance economic opportunities. At present, unemployment and
poor economic prospects for the young generation pose a serious threat
to the province’s progress. Poorer access to the quality education and
stalled employment opportunities for the youth of Balochistan, makes
their predicament worse. It is very difficult for them to get into better
universities and find suitable jobs in other parts of the country.
Furthermore, the government has traditionally been the chief employer in
the province but recent policies have slowed creation of jobs in the
public sector. In order to accommodate local labourers in the CPEC
related projects, it is vital that the government directs attention towards
developing their skills. If adequate efforts are not made in human
resource development, then only a fraction of local labour force will
benefit from the CPEC. Consequently, there will not be any substantial
progress in addressing the instabilities in the province. The framework for Pakistan’s economic growth, prepared by the
Planning Commission of Pakistan, highlighted that human incompetence is
a greater challenge to Pakistan’s economy than availability of infrastructure.
It is expected that the CPEC will create jobs for the local population in the
initial phase but measures have to be taken in order to consolidate the gains.
A lack of direction and coherence has caused past projects to be ineffective
in promoting economic growth and human development. The Deputy
Chairman of Planning Commission of Pakistan, Dr Nadeem-ul-Haque,
pointed out that development projects in Pakistan require strategic direction to
deliver sustainable benefits.28 Therefore, to expand employment opportunities,
the quantity of investment has to be complemented by felicitous planning and
human development initiatives.
One effective model of promoting stability in a region is the one that
incorporates the nature and forms of employment along with relevant policy
measures. The model is endorsed by the United Nations Policy for Post-
Conflict Employment Creation, Income Generation and Reintegration (UN
PCEIR) and is in line with the tracks of its peace building process.29 In the
initial track, short-term employment projects are implemented to meet the
immediate needs of the most vulnerable. The foundation for development is
laid at this point. In the next track, economic activities are supported to
make the local communities self-reliant. As a result, trading activities
increase in the region and the government adjusts its macroeconomic
policies to cater for new realities. In the final track, an enabling national
environment is created to strengthen state’s capacity. By applying such an
approach in Balochistan, gains from early harvest projects can be
consolidated to ensure long term stability.
The CPEC should not be treated as an entirely independent endeavour,
rather a part of Pakistan’s economic development plan. Other measures are
also necessary to complement the CPEC’s contribution in uplifting of
Balochistan’s economy. Building the capacity of Balochistan’s cities to
absorb local workforce is likely to take time. In the meanwhile, investment in education and training programmes for the Baloch youth will not only
prepare them for future employment opportunities, arising in their province,
but will also help them in attaining jobs that are already available outside of
Balochistan.
According to a study by the International Monetary Fund (IMF),
countries that improve their governance, after a period of instability, tend to
have greater economic growth in the medium-term than those counties
whose governance does not improve.30 It further concluded that adequate
policy measures and structural reforms also drive improvement in the labour
market. The Pakistani authorities need to take serious measures to match
international standards of governance. Developing state institutions and
ensuring accountability and transparency are necessary for the CPEC to live
up to its potential. Moreover, inter-provincial disputes must be addressed
timely so that progress on development projects goes on smoothly. In short,
the CPEC has to be supported by strong political will and its practical
implementation.

Conclusion

The CPEC is manifestation of a all-weather friendship between China
and Pakistan. It will enhance economic growth in both the countries and
also further their mutual strategic interests in the region. It is a national
project and no province is neglected in the proposed plans. Balochistan’s
geographical location has made it strategically important for both the
countries. The province has a long history of economic backwardness
and political unrest. However, the CPEC has the potential to finally turn
things around over there. Development of infrastructure and creation of
employment opportunities will play a pivotal role in bringing stability in
the province.
Furthermore, China is emerging as a dominant player in the region. The
regional powers, other than India, like UAE, Saudi Arabia and Iran, have
shown confidence in China, taking up the role of maintaining order in the
region. With an ever growing influence, China can more effectively pursue
its foreign policy objectives of peaceful coexistence and mutual benefit in the region. Geographically, Balochistan lies at the forefront of China’s
strategic initiatives in the region. China’s economic interests in Balochistan
will curb foreign interventions in the province while opening up partnership
opportunities for neighbouring countries along the CPEC.
To set things in order in Balochistan, it is essential that the CPEC is
supported by adequate policy measures. Infrastructure development
alone cannot support long term progress in the province. Improvement in
institutions and state infrastructure along with social development
initiatives are necessary requirements for stability. The CPEC should not
be considered as a standalone remedy but as an opportunity to augment
state and nation building efforts.
Pakistanis have generally been sceptical about foreign funded projects
in their country. The CPEC, however, has not only been well received but is
also being cherished by the locals. This is due to the fact that Pakistanis
consider China as Pakistan’s friendliest country. Most importantly, their
opinion is reflected by all the political parties voicing their support for the
CPEC. Moreover, the supportive role played by the security institutions of
the country has also been very encouraging. The impact of these positive
developments will surely be revealed in Balochistan in the coming years.

Education for all