Development gap of Balochistan

The province of Balochistan is the largest province of Pakistan in terms of area. It has an area of 347,190 sq.kms, equivalent to 43.6% of the total geographical area of Pakistan.

However, according to the Population and Housing Census of 2023, it has a population of 14.9 million, which is only 6.2% of the total population of Pakistan.

The consequence of the extremely low population density in the province is that the costs of provision of basic services are relatively high. An elaborate network of roads is required. Also, given the spread of rural settlements, more schools and medical facilities are needed.

Recent estimates of the size of the provincial economy, in terms of the Gross Regional Product, are that, as of 2023-24, it is equivalent to 4.5% of the national GDP. This implies that currently the per capita income in the province is 72.6% of the national average. This is the first indicator of the ‘development gap’ of Balochistan.

The province has a comparative advantage in some sectors. These include minor crops, mostly fruits and vegetables, mining and quarrying and electricity and gas. In these sectors, the province’s share in national value-added ranges from 6% in electricity and gas, to 21% in mining and quarrying and to 23% in minor crops.

The relatively underdeveloped sectors are manufacturing, wholesale and retail trade, banking and insurance and private services. The share of Balochistan in these sectors is generally below 3%.

The primary measure of the level of development is the UNDP Human Development Index. This includes the three components of income, education and health.

The UNDP National Human Development Report of 2020 has estimated the Human Development Index (HDI) of the four provinces for 2018-19. The overall value of the HDI of Pakistan is 0.570. The corresponding magnitude of Balochistan is 0.473. This places the province at a low level of human development.

The difference is the largest in the education component of the HDI. It is 0.500 for Pakistan and only 0.332 in the case of Balochistan. The gap is relatively less in the health component.

The Population and Housing Census of 2023 has confirmed the earlier estimates of 2018-19. First, the gap in the literacy rate is very large. It is 60.7% in Pakistan and only 42% in Balochistan. Second, the gross primary enrollment rate is 85.5% in Pakistan and 58.1% in Balochistan.

Third, the percentage of out-of-school children in Pakistan is 35.5% and as high as 58% in Balochistan. Fourth, the difference in living standards is amply demonstrated by the difference in percentage of pucca housing. It is 67.4% in Pakistan and only 19.6% in Balochistan.

There are other key indicators also of the development gap. A particularly sensitive indicator is the incidence of ‘idle youth’. This is substantially higher in Balochistan.

The population of youth in the province was 2.8 million in 2023. The labour force of youth, aged 15 to 24 years, was 2.2 million. This implied a labour force participation rate of over 78%. However, the Census reports an extraordinarily high rate of unemployment among the youth in Balochistan. It is estimated at over 37%. As such over 0.6 million youth are unemployed.

The share of youth who are neither in the labour force nor in the education system has also been derived. Overall, the number of ‘idle youth’ in Balochistan, who are in the labour force but unemployed and those who are not in the labor force and not undergoing education, is 1.5 million. This is an extremely high share of 53.6% of the total youth population in the provinces. The corresponding percentage for the country as a whole is 35.2%.

Turing to perhaps the most worrying indicator about the economic conditions in Balochistan is the impact of a relatively low per capita income and, overall, 34%, unemployment rate, on the incidence of poverty in the province. According to a recent study by the Pakistan Institute of Development Economics (PIDE), the incidence of poverty was as high as 70.5% in Balochistan in 2019-20 as compared to the national estimate of 39.5%.

Given the extreme ‘development gap’ of Balochistan, there is need to quantify the financial envelope of resources with the provincial government. Bulk of the financing is by Federal transfers under the 7th NFC Award. These transfers constitute 91% of total provincial revenues.

The 7th NFC Award had included two criteria for sharing by the provinces of special benefit to Balochistan. The poverty or backwardness indicator was given a weight of 10.3% and inverse population density a weight of 2.7%.

Consequently, the share of Balochistan in the NFC transfers is 9.09%, which is significantly higher than the population share of close to 6%. However, the shares need to be updated. The extremely high incidence of poverty will increase the Balochistan’s share significantly.

The extreme backwardness of Balochistan requires also that the federal PSDP should give priority to infrastructure projects in the province, especially to highways and irrigation.

A well-defined ten-year tax holiday needs to be given for private investment in Balochistan. This should contribute to more effective exploitation, in particular, of the substantial mineral resources in the Province.

The Benazir Income Support Programme should expand the coverage of quarterly support to families in Balochistan, given the very high incidence of poverty. Also, there is need to promote productive absorption of youth by the offering of an employment guarantee scheme.

Finally, Balochistan has effectively not yet been given the due priority for reducing the development gap. Two decades ago, the province used to have a per capita income higher than that of Khyber-Pakhtunkhwa. Now it has fallen significantly behind.

Given its coastal front, the port at Gwadar and substantial mineral resources, there is no reason why it cannot stage a strong comeback. Closing the development gap of the province will also contribute significantly to improving the security situation and integrate it more closely with the rest of the country.

Copyright Business Recorder, 2025