One of the major challenges Pakistan faces today is the enormous disparity between rural areas and urban concentrations. There are a variety of factors to build on this situation. Investment in infrastructure, industry and services sector has been centralised in urban areas. On the other hand, there has been growing deterioration of living conditions and environments in rural areas and declining job opportunities.
This has caused population migration to the cities, and the trend is almost beyond control given the conditions of high population growth. Demographic projections would have further serious implications for the future if the problem was not addressed now, on priority and effectively. There is thus an urgent need to have access to necessary technical and financial solutions and policy tools to enhance agriculture sector in terms of productivity and competitiveness, and, in parallel, promoting rural development.
Determined efforts are being made to revive national economy through agriculture-led growth. Federal government alone would spend Rs 14 billion annually for development of agriculture sector, whereas foreign donor countries, like Japan, would support the programmes to be initiated aiming at bringing long-term food security. Responding to these plans we need to prepare and implement village agriculture and industrial programmes for the people who live and work in rural areas.
Though Pakistan has been experimenting with various approaches of rural development in the past, not much has been achieved and sustained. There has been significant growth of the SME sector in recent years, but without having a planned and integrated focus on rural areas. Again, the borrowed idea of "One Village One Product" launched as "Aik Hunar Aik Nagar" in 2006 could not take off, primarily due to lack of political will. The only notable work has been done by Khushhali Bank through various micro-credit schemes extended to poor producer groups both in farm and non-farm sectors.
The significance of developing rural areas has assumed greater importance as cities were reaching saturation level without availability of enough jobs.
In order boths improving rural living conditions and making optimal use of natural resources, more technological measures should be complimented in the areas of infrastructure, processing of agriculture produce, marketing, credit facilities and training, rural non-farm activities, and public services. Entrepreneurship is the key to self-sustained development in rural areas.
These businesses, characterised as social enterprises, are catalyst for job creation and income opportunities for educated, unemployed rural youth, in particular. Ensuring equitable access to economic opportunity, the government needs to build rural economies through promotion of entrepreneurship at national level. The prospective entrepreneurs are to be encouraged and motivated through existing supporting institutions and by allowing initial grants to launch businesses.
Other fiscal and financial incentives too are required to be given. Institutional arrangements for acquisition and transfer of technology and training are to be made catering to specific rural needs. This will accelerate the pace of overall economic activity.
There are a number of business possibilities open for entrepreneurship. Agricultural livestock, forestry and fisheries are still little explored resources, whereas spectrum of possible technical improvements is broad.
Wheat milling, rice milling, vegetables and fruits processing & packing, processing of milk, animal dairy farm, seed processing, flowers packing, leather products and wood and furniture are conventional businesses but remain un-contested. Non-farm activities include construction, commerce, services, transport and manufacturing. The businesses, with technical improvements, are to be adapted to local ecological, social and economic conditions.
Existing SMEs could be modernised and expanded in a planned manner. A new business for rural areas (where water stream or lake is available even with as low as two meter water-head) is installation of small, privately-owned hydroelectric power plants. Such power plants, of capacity in the range of 18 kW-80 kW (producing 145,000-650,000 kWh annually) have been developed locally.
(The writer is Vice President of the Institution of Engineers, Pakistan.)
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