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Essays by CSPs | Pakistan Rich in Natural Resources But Poor in their Management

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By Irshad Ali Sodhar (FSP)
Outline
1- Introduction
2- Natural Resources and their management
3- Richness / abundance of natural resources in Pakistan
4- Pakistan’s natural resources and their mismanagement
a) Energy resources
i- Nonrenewable energy resources
a. Oil and Gas reserves
b. Coal reserves
ii- Renewable energy resources
a. Wind and solar power
b. Hydropower
b) Agricultural resources
i- Irrigation Network
ii- Fertile Land
iii- Variety of Crops
iv- Animal Husbandry
v- Fishing
c) Mineral Ore Resources
i. Copper and gold resources.
ii. Salt mines and other minerals
d) Human resources
i. Sixth Largest Population in the World
ii. Youth comprising major chuck
5- Factors leading to poor management / Governance
a) Political instability/ rivalry,
b) Lack of vision and planning,
c) Flawed policies,
d) Bureaucratic bottlenecks and corruption,
e) Worsened Law and order situation,
6- Implications of mismanagement of natural resources
7- Way forward
8- Conclusion
Pakistan is one of the richest countries in the world in terms of natural resources but also
one of the poorest among them in their management. The country is abundant in the vital
A R Khan Chachar CSS_2016
resources including that of energy, agriculture, minerals, population, and geography, but
unlike the developed countries, these have not been properly exploited due to poor
management. This dismayed situation is caused due to several, both chronic and acute,
flaws which have led to poor governance of country since its inception except some brief
spells of economic prosperity. Prevalent political rivalry and instability, worsening law and
order and rampant corruption have catalyzed the situation to resource development
impasse. Contrary to economic potential of its natural resources, Pakistan is a depending on
foreign aid and debt, it is facing deficit in trade, acute energy crisis to run industry, and
water stress for agriculture, to name a few challenges.
However, the daunting challenges and the mounting public pressure caused due to
awareness of civil society are increasingly influencing the political decision making.
Eventually, there is sign of hope for devising effective strategy to exploit the natural
resource wealth of the country for its self sufficiency and viable economic development. It is
suffice to say that the proper exploitation of this wealth would lead to the prosperity of this
nation.
Before discussing what natural resources Pakistan possesses, it is important to understand
what constitutes natural resources. These occur naturally within environments characterised
by amounts of biodiversity and geodiversity existent in various ecosystems. Some resources
like water and agriculture are essential for survival of inhabitants while others like energy
and minerals are secondary in nature but essential for economic development. However,
efficient management of these resources is vital to achieve prosperity of nation. Natural
resource management is a discipline with a particular focus on how management affects the
quality of life for both present and future generations. It is interrelated with the concept of
sustainable development. Pakistan is blessed with huge quantity of resources but lags in
management.
Being situated at one of the best geographic and geostrategic locations on the map of world,
Pakistan is affluent in the natural resources. It has enormous energy surplus resource
potential of both renewable and nonrenewable, which is greater than that of oil rich
countries of Gulf. Among the world’s 200 plus countries it has the second largest salt mines,
second largest coal reserves, fifth largest copper and gold reserves, seventh largest wheat
and rice production capacity. It is the sixth most populous country in the world having large
share of young population. Had these resources been properly managed, this country would
have been one of the richest economies of world. The detailed account of the natural wealth
of Pakistan shows how such great potential has been untapped due to mismanagement.
There are plenty of nonrenewable energy resources like oil, gas and coal in Pakistan. It has
more than 436.2 million barrels of oil, according to CIA World Fact Book, and 31.3 trillion
cubic feet of proven gas reserves. The current oil production is 65,997 barrels per day while
gas production is 4 billion cubic feet per day. Though it is not enough to meet the needs, it
can save considerable outflow of currency. Moreover, there is resource potential of 27 billion
Barrels of Oil and 282 TCF of gas reserves in the country which has not been explored due
to lack of vision and flawed policies.
Pakistan has world’s second largest coal deposits of 185 billion tons. These are estimated to
be equivalent to 618 billion barrels of crude oil. This is more than twice if we compare it
with oil reserves of Saudi Arabia. If it is converted into oil by gasification, it will generate
650 barrels of crude oil which at an average market rate of eighty dollars per barrel, would
generate 5.2 trillion dollars. But the policy making elite of the country has not only been
oblivious to the potential but also indifferent to the slow pace of efforts to harness this
source for energy production and exports. The energy deficit is badly affecting the industry
in country but no any serious initiative is taken for electricity production from coal. China
imports its 65 percent of coal requirements but despite being ‘all weather friend’, this giant
energy importing economy does not import coal from Pakistan.
Besides, the geography of Pakistan enriches it with the renewable energy resources. Wind
and Solar energy are other unused lifelines of Pakistan. 1046 km long coastal line gives
potential of 40000 MW of electricity. The vast lands of Balochistan can be utilized for solar
electricity generation. But unfortunately these resources have barely been used due to
technological backwardness and lack of innovative policies.
The hydropower potential of the country is also enough to satisfy the needs of energy. Only
33 percent of around 20,000 MW generation capacity is produced from this resource which
has the potential of producing 40,000 MW. No concrete steps have been taken to harness
this resource mainly because of political differences and distrust prevailing in the country.
The lack of vision and policy planning in utilisation of water resource is also severely
affecting agriculture. Despite having one of the largest irrigation systems of the world,
Pakistan is facing water scarcity for crops. Storage capacity of water reservoirs is quickly
depleting because of annual sediment inflow and a substantial quantum of available water is
lost in seepage as the canals have not been cemented. Out of 77 million acres cultivable
area, only 55.5 million acres have been ploughed. The country is blessed with four seasons
and variety of crops but due to lack of research the productivity remains low.
In addition, being an agricultural country it possesses tremendous scope of animal
husbandry. Pakistan’s breeds of cow like Sahiwal cow are the best breeds of world. Due care
to this area can lead to bulk of exports in dairy products. On other hand, fishing industry
has an important role to play in national economy of Pakistan. The coast line of 814 km
provides ample opportunity to enhance this industry, but poor performance and poor
presentation of our cause in WTO have put this industry at the verge of destruction.
The minerals are also vital natural resources available in great quantity. Pakistan has fifth
largest copper and gold reserves in the world. The Riko deq project, copper and gold
reservoir, have been estimated to be worth of 260 billion dollars, which is ten times the all
financial aid received from USA in last sixty year. But instead of exploiting own resources for
economic independence, country has been dependent on foreign aid. How rich Pakistan is,
and how poor Pakistanis are! There are other partially untapped resources of rock salts,
Gypsum, lime stone, iron, marble, and silica sand in large quantities. These resources have
not been exploited due to corruption and bottlenecks in political and bureaucratic culture.
The most important of the natural resources in this globalized world is human resource.
Pakistan is the sixth most populous country in the world having large share of ‘young
population’ i.e. 63 percent below age of 25 years, according to United Nations Development
Programme. But the failed policies have caused mounting unemployment of 15 percent. The
resource which could be used to enhance the economic activity is left to no use which is
adding to the increase in poverty. The lack of opportunities leading to the brain drain of
talented minds has further worsened the situation.
The above analysis reveals that Pakistan is not poor, but poorly managed country. The
factors which have caused the poor management of natural resources include political
instability, political indecision making / divergence, lack of vision and planning, flawed
policies, bureaucratic bottlenecks and corruption, lack of human resource development,
worsened law and order situation. These factors have led not only to the poor management
of natural resources but also to the poor governance of country.
The political instability has been the main cause of such mayhem. Since the independence,
no political group in Pakistan has been given enough time to be mature. The military
interference in politics and rivalry among political stakeholders are the key features of brief
history of this country. This inconsistency has kept the exploitation of natural wealth
unattended. The divergence of opinion on construction of water resources has deprived the
country of storing the surplus water for agriculture and electricity generation. However, this
could be overcome by vision and planning, which is a scarce commodity here. Instead of
controversial big dams several small reservoirs could be constructed, had a pragmatic
approach prevailed among the decision making machinery.
Coupled with this, the flawed policies of successive governments have caused tremendous
problems despite availability of adequate resources. The energy sector is a vivid example of
such poor management. The major chunk of the electricity is produced through thermal
generation for which almost 80 percent of oil is imported. Whereas the second largest
treasure of coal in the world is left unexplored as it contributes only 2 percent of electricity
generation. Countries like US, China and India generate electricity by almost 60 percent
from coal due to its lower cost. This shows how other countries take cost of electricity
generation into serious consideration.
However, it would be unfair to put all the burden of poor resource management on the
political factors. The bureaucratic bottlenecks and corruption have been equally responsible
for this undesirable scenario. Several hydro power projects, Thar coal project, and oil
exploration projects are in doldrums due to bureaucratic bottlenecks. There is no headway
in solar and wind energy projects planned by Alternative Energy Development Board.
Similarly, corruption has also been extremely detrimental. The standstill in the Riko deq
project is an example of this case. Pakistan is ranked at 34 in Corruption Perception Index
2010 by Transparency International, which is a discouraging factor for foreign direct
investment.
In addition, the worsened law and order situation has caused severe blow to the economy in
general and natural resource management in particular. The volatile situation in Balochistan
is harmful to the exploitation of resources. The Gawadar port, despite being located at
crucial location, has not been made fully functional. Other projects of mineral exploration
are also affected. The terrorism in the northern areas has been harmful for the potential
tourism industry.
These factors of poor management have placed Pakistan in an undesirable situation
domestically and internationally. The socio-economic situation remains gloomy as the GDP
growth rate is one of the lowest in South Asia at 2.2 percent, trade deficit is estimated
about $16 billion, inflation rate continues to be in double digits at 15 percent, population
below poverty line is alarmingly around 35 percent, and unemployment is at 15 percent.
Also, it does not enjoy a favorable position among the comity of nations. It is ranked 123rd
out of 139 countries in Global Competitive Index; it is at 134th among 192 in Human
development Index by UNDP; and it occupies the critical position of 12th in Failed States
Index 2011 issued by Foreign Policy Magazine.
The country has been economically dependent on foreign aid and debt, which has adversely
affected her standing in international community. However, despite Pakistan’s crucial role in
west’s geostrategic framework and war on terror, the allies end up donating small amounts
of grants which make fractions of what could be obtained from exploiting own natural
resources. The external debts and liabilities have nearly doubled from $ 37 billion in year
2000, to $ 59.5 billion in year 2011.
Nevertheless, the worst impact so far is the energy crises in Pakistan. There is serious
shortfall of electricity, gas and oil. Electricity demand exceeds supply and “load shedding” is
a common phenomenon. The shortfall of electricity reaches at 4000-5000 MW which badly
affected industry, eventually leading to decreased exports and diminished economic activity.
These adverse implications, of the extremely poor management of resources, on the
economy and society in the country, warrant a serious approach and comprehensive
strategy to reverse the trend. The pragmatic approach and policy direction can help the
country to be able to rely on its own resources instead of dependency.
Pakistani leadership must focus on exploration of natural resources and their scientific
management. Properly managed natural resources can become instrumental in national
income and its growth. Extensive geological survey is required to discover the resource
potential, planning and vision is needed to explore the proved but untapped resources and
effective strategy is essential to fully exploit the resources under use.
In order to take maximum benefits from natural resources there is the need of technical
education of people involved in resource exploitation and management. The technical
education ensures that there is minimum wastage of the resources. Hence, such education
should be made compulsory for the people in concerned areas of activity.
On the other hand, the politicians, policy makers and all the stake holders must adopt a
rational approach not to politicize natural resources. It should be prioritized as the vital
national interest and dealt with as such. The controversies on the management of water and
mineral resources must be resolved pragmatically for best interest of the nation.
Last but not the least, worsened law and order situation in Pakistan, which has led to the
lack of investment, must be checked. The private firms engaged in resource exploration
must be protected by the state. Ensuring the security, would attract investment in the
respective areas which would subsequently guarantee the inflow of capital in the national
economy and the resource potential could be fully exploited.
It needs not to be emphasised that Pakistan is not poor but poor management of its natural
resources has made it so. The enormous natural resources of all kinds like energy, minerals,
agriculture, and human could have made this country a wealthy economy. Instead, there
been bleak picture of economy and undesirable image outside due to the chronic flaws in
vision and policies. Thus, the daunting challenge of poor management of natural resources
direly needs to be addressed not only to overcome the perils caused due to it but also to
achieve economic self sufficiency and prosperity of the nation. By surpassing this challenge,
Pakistan is destined to have eminence place in the world as a stable, growing and
prosperous nation.

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