Khyber Pakhtunkhwa's Industrial growth slows down

For a decade industrial growth in war-torn Khyber Pakhtunkhwa has steadily slowed down. The economic and industrial activities had remained at standstill amid the growing disparity of natural resources, which was not only caused acute shortage of electricity and gas for manufacturing and exporting units in the province, but also generated huge unemployment over past a decade. The energy sector is lifeline for accelerating industrial development with taming unemployment. Nevertheless, the indigenous potential resources neither support commercial nor industrial consumers in the KP as the current imbalanced share under present policy framework, mere benefiting to other provinces instead of this province. For the last three decades in war situation, the KP industrial stagnation had not only dwindling its' economy, but has also lowering the ratio of internal and external investment comparatively with other provinces. Almost 70 to 80 percent of KP industries either shifted to other provinces or abroad, while most of units turned to standstill in prevailing energy crisis and militancy situation, resulting downgrading the economy of the province. In the unfavourable environment, local investors in generally and foreign in particularly were reluctant to invest in the current circumstances. These facts and finding have been revealed in a report prepared by Sarhad Chamber of Commerce and Industry (SCCI) on Economic Stagnation of Khyber Pakhtunkhwa: Specifically with primarily focusing of "Energy and Banking Perspective Part-I". The report formally launched by the SCCI president Afan Aziz in a ceremony held here at the chamber. On the occasion, the chamber vice president, Ziaul Haq Sarhadi, former presidents, Riaz Arshad, Usman Ahmad Bilour, member of executive committee, industrialists, and businessmen were present. The report said that the highly centralised regulatory and institutional framework at federal regarding control its direct and indirect natural resources of the provinces has not offered any leeway to take fully exploiting from their potential ambit by the industrial and commercial consumers. Differentiating statistics on natural gas consumption with other provinces, the document said the KP has net consumption of gas domestic, commercial, general industries transports CNG, remains 60, seven, 35 and 49 MMCFD respectively during 2011-12. Of the total gas consumption of 3,400, the Punjab consumes 1,807 MMCFD, Sindh 1,200 MMCFD, Balochistan 242 MMCFD, and KPK mere 151 MMCFD during the period. As per statistics data of gas consumption and production from July-2011 to March-2012, the Khyber Pakhtunkhwa province has consumed less against its actual production ratio as compared to other provinces. The data showed that the Sindh province produces 2,849 MMCFD with 67.3 percent share, followed by KPK 369 MMCFD with 8.7 percent share, Punjab 205 MMCFD with 4.8 percent share, and Balochistan 813 MMCFD with 19.2 percent share of the total production of the country in the period. A whopping volume of 924MMCFD of natural gas was consumed for power generation during 2010-11, whereas an accumulated total of 1, 432,014 MCFT consumed for power generation during 2004-12, the document said. The figures further revealed that the industrial power, gas and electricity consumption has increased from 1,508 to 2,527 MMCFD during last a decade. The document also disclosed that the policy is being pursued to import Liquefied Nature Gas (LNG), which can be revised pricing and provincial distribution of the company. The plan would ultimate increase prices of gas, which could be equal enforce in the country, and business community would strongly resist any such plan, the document said. Despite the additional production of gas against the demand, the document said that the ban has been imposed to use additional industrial gas and new connections, and to tame the increasing industrial unemployment in the province. A 22,000 long pipeline has installed in past couple years with recent addition of 18,000 completing soon in Punjab province, which can lead immense shortage of gas in the province, the document disclosed, added that there was needed to establish a gas distribution company in the current circumstances. Comparing the energy consumption with rest of the country, the document said that a total electricity consumption of KPK has remained at 2,184 with mere 33 percent growth rate, whereas Punjab province has significantly increased growth at 20,605 consumption, followed by Balochistan 2,226 with share of 122 percent growth, Sindh 5,672 with growth ratio of 56 percent, and Azad Jammu Kashmir (AJK) with marginal growth of 825 during the 2010-11. According to province wise data, a total of capita electricity consumption stands at 435 per kilo watt, out of which Punjab province with 439KWh, Balochistan 446KWh, Sindh 376 KWh, KPK 367 KWh, and Fata 196 KWh. The document suggested that a nature resource management should be framed to extend full benefits of the natural potential resources to all provinces. The traditional approaches should also be avoided for provision of all those benefits to business community and other relevant stakeholders, he document added. The post 18th constitutional amendments, the document proposed that natural resources management structure by Khyber Pakhtunkhwa for fast track development of its potential resources. "A new paradigm needs to develop natural endowment of KP and to makes sure pass on the economic benefits to industrial community to strengthen their competitiveness and reduce their cost of businesses", the document added. The new paradigm should focus for maximum extension of benefits of indigenous natural resources to local business community, then contribute their due share to the national supply pool after their need fulfilment, the document suggested.