Economic Potentails Essay

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Economic Potentails

Starting with the 1979 Soviet invasion of Afghanistan, the turmoil and instability across the border spilled over Into FAT. FAT has remained one of the most Insular and Isolated corners of the country cut off from the mainstream of Pakistani society. Increasingly Impoverished and marginalia, they have become an easy pray to terrorist elements. The overall economic situation of the region has remained below normal level due to governmental policies coupled with overall economic decline in the country due to the after effects of Global War on Terror (GOT) . N the succeeding paragraph an attempt has been made to analyze economic potentials of FAT with a view to Initiate an economic development drive In the region. 2. Aim. The alma of this paper Is to give an Insight of economic potentials of FAT, bringing into sharp focus untapped vast mineral / natural resources with a view to suggest measures to overcome impediments for its economic prosperity. 3. Scope. The scope of the paper is as follows:- a. Brief Economic History of FAT. B. Economic Potentials of FAT. C. Main Issues / Impediments d. Recommendations.

Brief History of Economy of FAT 4. FAT is one of the most impoverished regions of Pakistan where majority of the population lives in rural areas. The economy of the FAT is chiefly pastoral, with agriculture practiced in the region’s few fertile valleys. Historically it used to be a major centre for opium production. Although that has been significantly suppressed by the Pakistani government, opium smuggling from Afghanistan continues to be a problem. The population growth rate Is 3. 9 per cent as compared to nationally cited figures of 1. 9 per cent.

The literacy rate is 17 per cent against the national average of 40 per cent while female literacy is less than one percent. Nearly 66 per cent of households live below the poverty line. Landholdings are small; cultivation of cereal crops is there with poor irrigation and infrastructure. Besides, the limited resources are degraded by past and post 9/11 inflow of refugees from Afghanistan. 5. FAT is blessed with forested mountains, which have been one of the major economic resources In the area. Besides the forested mountains FAT Is rich In mineral resources. Very little has been exploited and much is to be explored and exploited.

Trade, labor and other professions have also been supporting the economy in some way or the other. The mineral produce of the province has been Salt, marble, gems etc. Opium and hemp drug have also remained an important aspect in the financial history of KIP and FAT. Economic Potentials of FAT population, land, geography, and vicinity of the Afghan border which are as under:- a. Agricultural. Agriculture is the lifeline of the people of FAT and a pillar of the tribal economy. Of the total reported area of 2. 7 million hectares, barely 200,000 hectares (a little over 7 per cent) is cultivated.

Just half of all potentially cultivable land is used for agriculture, since the possibility of reclaiming wasteland has been largely unexplored. A little over 40 per cent of the cultivated area in FAT is irrigated, while the remaining farmland relies exclusively on rainfall. Most farmland produces a single crop each year and barely 16 per cent of cultivated land is put to use during two seasons. Household income is supplemented by the cultivation of high-value produce such as apple, apricot, date, fog, grape, peach, persimmon, plum, pomegranate and walnut.

Significant scope exists to increase off-season vegetable cultivation. Yields per hectare for rice and maize are slightly lower than KIP and national figures but the per-hectare yield for wheat in FAT is Just 38. 7 per cent of the national average. Wheat production falls far short of needs, and the deficit is imported from other parts of the country or abroad. Poppy is still cultivated in some parts of FAT and remains a major source of income for farmers in remote areas. B. Forestry. According to the forest directorate, forests are spread over approximately 21 5,345 hectares (532,129 acres) or 7. 8 per cent of the total area. Natural forest covers approximately 126,424 hectares (312,401 acres), while forestation has been carried out over 88,424 hectares (218,500 acres). With the exception of the Baja and Karma agencies, FAT falls within the dry temperate zone, experiencing predominantly arid and semi-arid climatic conditions. Forests consist mainly of conifers and broadleaved species. Among conifers childhood, kali, dear, small patches of chirp and associated shrubs are found in the area. Oak is the dominant broadleaved species, with associated species such as beer, enemy, mammals and walnut.

Overall, however, forest cover is declining as a result of uncontrolled grazing, pressure from fuel wood and fodder collection, and unsustainable levels of timber extraction (legally, for local use and sale, and illegally for export to areas outside FAT). To date, no forest legislation has been extended to the tribal areas. In general, more influential tribes exercise greater control over natural resources. C. Livestock and Poultry. For most farm households, keeping livestock serves as a buffer in times of hardship. If crops fail, animals can be consumed or sold in the market.

The size of the herd depends mainly on the household’s capacity to purchase animal feed in the winter and spring months, when natural fodder is thin on the ground. Livestock productivity is constrained by feed shortages, inadequate veterinary cover, and inferior genetic potential and poorly developed marketing facilities. Conditions for poultry farming are particularly favorable in the upper reaches of all agencies, with Cyber and Karma currently home to the largest number of poultry farms. Women spend a major portion of their day attending to livestock and poultry. . Fisheries. Available surface water resources include 934 kilo meters of rivers and streams, 1 ,450 kilo meters of irrigation canals, seven small dams (five of them under construction) spread over an area of approximately 647. 0 hectares (1 ,600 acres), six harnessing ponds/reservoirs over an area of 9. 71 hectares (24 acres), 40. 47 hectares (100 acres) of water-logged areas and 50 springs. Except for rivers in which extensive and intensive fish culture. Fish farms have also been constructed for income substitution in areas where poppy cultivation is popular.

Two trout farms, spread over 0. 61 hectares (1. 5 acres), are also operating. These were established without external support. A trout fish hatchery at Manila in Karma Agency produces approximately 100,000 eggs and 50,000 fry. E. Mining. The mountains of the tribal areas yield a variety of minerals, ranging from marble and granite to copper and gold. Considering the reserves that have already been identified, the sector has the potential to become a major employer in the long term. Official estimates show significant mining activity in some areas.

Opportunities exist to expand this activity. Significant reserves of highly priced white marble exist at Carat in Mohammad Agency, grey marble in Baja and other attractive colors in all seven agencies. Currently, soapstone at Sandhog in Mohammad Agency is mined and exported to Europe where demand has shown consistent growth. In North Waistband, estimated copper reserves of 35 million tones have been identified, with confirmed reserves of 8 million tons bearing an average copper content of 0. 8 per cent.

Exploitation of these resources will employ labor in the thousands, in addition to providing export revenues. Significant deposits of high-quality coal have been identified at Durra Adam Keel in FRR Chat, as well as in Karma, North Waistband and Organza. Another area with potential for growth is gemstones. Geological studies indicate the presence of precious and semi-precious stones in the north, where emerald and tourmaline eve been found, while garnet and quartz occur in Baja and South Waistband. These reserves have not been properly identified or explored.

These areas are rich in commercially valuable stone and there is potential for further expansion. F. Afghan Transit Trade and Black Economy. The Pakistan government has provided a transit trade facility to Afghanistan, allowing goods intended for the Afghan market to land at Pakistani sea and dry ports, and travel across Pakistani routes. A large number of tribal, especially from Cyber Agency, are involved in this transit trade. Most customs learned of transit goods at sea and dry ports, and transportation to Afghanistan, is handled by tribal businessmen.

In many cases, goods entering Afghanistan flow back into the tribal areas through the porous border as De facto duty-free items. These products find their way into markets in FAT and eventually to the settled areas, where tribal traders have built large commercial centre on the outskirts of major cities. People from all over the country flock to these markets to purchase ‘imported’ items far cheaper than domestically manufactured products. Although this trade narrates employment for tribal, the bulk of the profits accrues to a few business owners.

A vibrant and effective black economy exists in FAT owing to tax evasion and illicit smuggling facilitated by the Afghan Transit Trade (ATT). The World Bank has estimated the overall value of this “stealth” economy in Pakistan to be over $ 30 billion, which is one of the highest in the world and protects local livelihoods from outside pressures. The agreement met with criticism due to increase volume of smuggling, with 80 % trade via ATT comprised of smuggled goods. Ongoing Development Projects / Initiatives by the Government 7.

The details about ongoing developmental projects/initiatives by provincial and federal government are attached at Annex A. Main Issues / Impediments under:- a. Agriculture (1) Agricultural activity in FAT is unfocused. Extension services are inadequate, marked by inefficiency and a shortage of skilled staff, while research facilities such as laboratories and experimental farms are lacking. (2) Water is also a serious concern, not only in terms of scarcity in general but also because of inefficient use in areas where it is available. Inefficiencies lead to low production. 3) Credit is not available wrought mainstream financial institutions. (4) The lack of vegetative cover has led to severe soil erosion, while little or no progress has been made in reclaiming wasteland for agriculture. (5) Capacity constraints exist at the agency level but farmers also require training. B. Forestry (1) Major concerns to forestry stem from excessive pressure on forest resources and unregulated use at all levels. (2) With forest resources rapidly disappearing, the environmental services provided by natural echo systems have also diminished. 3) Although the rural population depends heavily on forest resources, rights to these sources are unclear and no benefit-sharing mechanism is in place. (4) In terms of governance, the security situation in some agencies makes forestry initiatives difficult to implement and monitor. B. Livestock and Poultry (1) Livestock and dairy production is low for a number of reasons. Most livestock rearing activities are carried out by individual households in isolation. (2) Unsustainable livestock and pasture management practices are widespread, and government initiatives do not seek the participation of local communities. 3) Support for those involved in livestock and poultry rearing is poor. 4) Research and development is another area that requires attention. (5) Institutional capacity in the sector is poor, largely as a result of financial constraints. C. Fisheries (1) An overall deterioration in the health of freshwater echo systems has been witnessed, caused in large part by insufficient conservation measures. (2) The process of awarding fish farms under various schemes is politically motivated. (3) The absence of reliable data on land and water resources hinders development planning. D.

Mining (1) The sharing of income from mineral extraction and leasing creates obstacles. 2) Outdated technology and antiquated methods currently in use are another issue. (3) The lack of reliable roads and infrastructure makes both exploration and transport difficult. (4) Obtaining a no-objection certificate is a long-drawn-out process which discourages potential speculators. (5) Investment is also hindered by current restrictions on obtaining credit from scheduled banks operating in the tribal areas. 9. Recommendations a. Agriculture. Agriculture sector can provide a substantive base for economic development.

Following measures are recommended in this regard:- (1) Adopt the socket area approach to focus on the production of specific crops in identified production zones. (2) Improve water management practices by introducing efficient water use technologies, and constructing small dams, ponds and reservoirs. (3) Reclaim cultivable wasteland through dry land agriculture. Introduce the use of bio- pesticides. (4) Irrigation network needs to be developed by construction of small ensure proper packing and canning of fresh and dry fruit for international markets. 6) There should be a shift from subsistence agriculture towards market-oriented production, especially for high-value crops. The possibility also exists to access markets in Afghanistan and Central Asia. B. Forestry. Following steps are recommended:- (1) Launching of a conservation campaign for the forests. (2) Encouraging plantation of new trees by provision of free saplings. Grafting of wild olive trees with fruit bearing species. Fruit culture and off-season vegetables with free fruit saplings and expert’s. (3) Establishment of checks for smuggling of timber into Afghanistan. 4) Modernization of timber industry in the area. (5) Forest cover should be increased by protecting natural regeneration, and rumoring forestation and reforestation including linear plantations along river beds. C. Livestock and Poultry. Following steps are recommended in this regard:- (1) Improve access to services, including animal health services. (2) Conduct research into animal nutrition and breed improvement. Improve the condition and productivity of rangeland, in collaboration with research institutions and the forest department. 3) Set up marketing facilities for farmers. Improve rural infrastructure and access to markets. (4) Declare ‘pocket areas’ for dairy production, with linkages to agro industry for marketing and service delivery. 5) Ensure that savings and credit services are available to support micro enterprise and on-farm income generation activities. (6) Establishment of food processing facilities for canning of meat. D. Fisheries. The recommended steps are:- (1) Identify poor communities and disadvantaged groups with the potential to earn a livelihood from fish farming. 2)Strengthen existing trout fish seed, rearing and fattening facilities. Develop new dam fisheries and pond/reservoir fisheries. (3) Increase access to improved fish seed varieties. Support and assist farmers in setting up demonstration integrated fish farms. 4) Develop linkages for access to credit facilities and marketing support. E. Mining. In order to increase productivity in the mining sector and improve the quality of the product, following strategies are recommended:- (1) Legal framework governing mining activities to encompass leasing, dispute resolution mechanisms and regulation. 2) Increase the productivity of mines by adopting modern methods to boost quality and reduce wastage. (3) Introduce new technologies through Joint ventures on the basis of public-private partnerships. (4) Maintain a healthy workforce by improving safety; training and develop emergency vacation procedures. (5) To encourage tribesmen either in Joint ventures or lease agreements with public and private sectors. (6) FAT needs to be brought under geological survey mapping. Special funds should for mineral exploration and development on modern lines.

Recommended Strategy for Central Government 10. Apart from above mentioned recommendations, the Central Government is also suggested to ensure following:- a. Development Plan. The Central Government should allocate funds and loans on minimal mark up rates and private and public sectors should be encouraged to assist the tribal organizations to develop viable and Commission (MFC) Awards. In view of government’s drive to bring FAT into the national mainstream, it is imperative that it be included in the MFC Awards as a separate entity. C. Trade Sector.

The international efforts for re-construction in Afghanistan and opening up of trade routes to CARS (Central Asia Republics) offer great economic opportunities for. Following measures will help in this regard:- (1) Opening of Trade Routes. Formal trade routes between Pakistan and Afghanistan should be opened on priority e. G. Gullah Khan Route between Maharanis and Ghost. (2) Tribal Chamber of Commerce. The establishment of a Tribal Chamber of Commerce would enable the tribal traders to have better interaction with the national and international markets. 3) Tribal National Bank. It should provide financial services, counseling and planning ability necessary to free the tribesmen from the isolation of an economic island in which they had been living for centuries. D. Infrastructure Development. Following measures are recommended in this regard:- (1) Rehabilitate roads for better connectivity to strategic locations. (2) Construct new roads in remote or underdeveloped areas to generate economic opportunities and improve security. 3) Build new bridges and rehabilitate damaged bridges. E. Good Governance.

Good governance is a key prerequisite for achieving the goals set out in the economic development of FAT. Governance system is participatory, supported by a robust legal framework with active public consultations. F. Law and Order. This is of course a critical issue for the people but security is equally important to service providers and government officials who travel to and work in the area. In this regard following is recommended:- (1) Reinforcement of the Frontier Corps with more manpower, modern equipment, mobility, intelligence, higher allergies and training in counterinsurgency after ongoing military operation. 2) Properly trained, better equipped and reformed FAT police and Shadier Force. 10. Conclusion. FAT offers numerous investment opportunities and its potential can hardly be exaggerated. There are number of investment opportunities indicated in the report. These vacant opportunities range from core industrial activities to allied businesses at peripheries of various sectors. Modernization, global business outlook, research and enabling business environment will certainly ensure high returns in NY sector identified in this report.

Adoption of practical economic policies with their correct implementation would be a step forward in right direction of bringing the area into main stream. BIBLIOGRAPHY 1. Safari Mac, Economic Perspective of FAT, Individual Research Paper. 2. FAT Sustainable Development Plan 2007-2015, Gobo of Cyber Buckwheat. 3. FAT Sustainable Development Plan 2007-2015, Gobo of Cyber Buckwheat. 4. FAT Sustainable Development Plan 2007-2015, Gobo of Cyber Buckwheat. 5. FAT Sustainable Development Plan 2007-2015, Gobo of Cyber Buckwheat. 6. FAT Directorate of Agriculture (Extension).

PC-I on Establishment of Two Research paper on Economic Initiatives, 2006-07 to 2010-11 and 2011-12 to 2015- 16. FAT Forestry Sector. 8. Livestock Census. Islamabad: Federal Bureau of Statistics. 9. FAT Directorate of Agricultural Research. Agricultural Research in FAT?Five Year Plan. Tartan, Appeaser: Agricultural Research Institute, Directorate of Agricultural Research. 10. FAT Development Statistics. Appeaser: Bureau of Statistics, Planning and Development Department. 11. Annex A ONGOING DEVELOPMENT PROJECTS / INITIATIVES BY THE GOVERNMENT 1 . Agriculture.

Over the years, a number of projects have been launched through the ADAPT. These have covered a range of activities including the reclamation and development of cultivable wasteland, off-season vegetable cultivation, fruit nursery farms, grafting wild olives, tea cultivation, the introduction of cherry and pistachio, block plantation of improved varieties of dates and Jujube, support services for apple orchards, farm services centre, strengthening agriculture extension, the introduction of beneficial micro-organisms technology, improved seed crops, seed production and demonstration farms.

The development initiatives include:- a. Scholarships for Bachelors and Masters study in the sciences, and two-year field assistant pre-service courses. B. The Baja Area Development Project, Cyber Area Development Project and Mohammad Area Development Project, initiated with support from the Narcotics Affairs Section of the US Embassy, focusing on the eradication of poppy cultivation through crop substitution. C. The Southern FAT Development Project (SPED) operates in Karma, North Waistband and South Waistband, while the Asian Development Bank (ADS) launched the Brain Area Development Project in Organza

Agency to promote agro-based activities and adaptive research. D. Similarly, the Sustainable Plains Development Programmer (SPED) is working in the Cyber, Karma, Mohammad and Organza agencies to control land fragmentation, reclaim wasteland through collective farming, develop a system for the collective use of physical infrastructure, and promote collective marketing. E. Dry land orchards have been established over an area of 8,093. 71 hectares (20,000 acres).

Land, labor, accommodation and stores are provided by the community, while the SPED develops the land. E. Ongoing initiatives under the SPED include river raining through vegetative engineering and the ‘Green Valley Karma’ project which carries out agricultural development activities, including the establishment of dry land appropriate technology. F. Between 1990 and 1995, adaptive research on fruit was carried out in Karma, North Waistband, Organza and South Waistband.

This effort was expanded under the SPED to include cereals (wheat and maize), off-season provides assistance in the identification, selection and transfer of agricultural technologies through training and field demonstrations, with the participation of farmer groups. It has three components: integrated resource management; immunity infrastructure development; and project planning, management and support. H. The second phase of the DEAR project is being implemented in various agencies. Funded by the ADS, WEB and federal government, DEAR focuses on restoring and improving the productive capacity of drought-affected communities. . Other projects in the pipelines cover agro business development and diversification, strengthening crop reporting services, agriculture sector linkages, land leveling and reclamation, and the conversion of unproductive land. 2. Forestry a. Activities of the directorate have focused on nursery raising and plantation. While reliable data is not available on forestation, it is thought that the survival rate is low as a result of drought and overexploitation. Interventions to promote sericulture have been restricted to the introduction of mulberry plants and the training of farmers. 5 b.

The Inter cooperation Pakistan-implemented Farm Forestry Project and the Karma Rural Support Organization have assisted local communities in establishing household-level nurseries and carrying out tree plantation on the boundaries of agriculture fields to help meet domestic fuel wood and fodder needs. 3. Livestock ND Poultry a. Public-sector initiatives include the establishment of veterinary facilities and a semen production unit. B. SAID is actively involved in the livestock sector, providing animal health services to Afghan refugees. It also constructed a civil veterinary hospital at Alienation in Cyber Agency. . Currently, the Karma Rural Support Organization is working with community-based organizations in a number of sectors, including livestock. D. Keened Koru, a Appeaser-based non-governmental organization focusing on women’s issues, also covers livestock keeping and backyard poultry farming. It operates in the Cyber, North Waistband and South Waistband agencies. E. The SPED has to date set up 403 male community organizations with a combined membership of more than 10,000, along with 97 women’s organizations with more than 1,500 members in total. These groups have been awarded 261 schemes. F. The SPED has trained both men and women to act as community livestock extension workers. It has also carried out work in breed improvement. G. The DAB funded Brain Area Development Project conducts similar activities in Organza Agency. It employs women to work as stock production officers and assistants. H. Pasture and fodder development is a major component of the Inter cooperation Pakistan-funded Farm Forestry Support Project which is active in Karma Agency, where it promotes silos-pastoral systems through the use of water harvesting techniques.

The project supports the plantation of fodder tree species and shrubs on farmland. Silos-pastoral sites consist of seeding fodder shrubs and grasses. I. The DEAR project also includes livestock and dairy development in its portfolio. The Fords activities include the establishment of 1,440 fodder production demonstration lots and the sustainable management of pasture through controlled grazing in communal land. J. The European Union-funded Strengthening of Livestock Support Project, which operates in Baja, Cyber, Karma and Mohammad, is involved in services. 4. Fisheries a.

Fisheries development was introduced to the tribal areas in 1987 through the Development of Fisheries in FAT project, which was implemented in the Karma and Organza agencies. B. A trout hatchery was set up at Manila in Karma, while in Organza a carp hatchery was established. Seed production was primarily intended for the replenishment and enrichment of water bodies. . Until recently, fish farming was not widely practiced. Its popularity has increased with the implementation of a number of projects aimed at promoting farm fishery, covering six agencies and three FRR, with a combined financial outlay of 10 million rupees. . A trout rearing facility, with a demonstration centre, has been completed at Chablis in Karma Agency. These initiatives are funded from the ADAPT. 5. Mining a. The directorate has allocated a total of 100 million rupees for the construction of 45 kilometers of roads in various areas where mineral reserves have been identified.