The Economy of the FATA merger

The Economy of the FATA merger


There seems to be general political consensus that the erstwhile federally administered tribal areas [FATA] and Khyber Pakhtunkhwa province should have been merged earlier. Advocates of this argument feel the merger and mainstreaming of FATA’s population will help in implementing Pakistan’s primary counter-terrorism blueprint, the National Action Plan.
In a bid to keep the local population on its side, the federal government has promised to increase spending on activities to promote local production, to create jobs and improve the education and health status in the tribal districts. To create fiscal space for such expenditures, and to keep these promises are of immense importance if the government wants to prevent rhetoric contrary to its decisions.
This month during a visit to Bajur, Prime Minister Imran Khan said that the government plans on spending PKR 100 billion annually for 10 years in the tribal districts, and has directed the federal government to initiate a three-week consultative process with the locals. The opportunity to formulate a real and lasting development plan for the war-torn region is imperative, with public investment directed toward three mains goals: raising public administration institutions, the provision of basic infrastructure and the development of social sector facilities such as education, health, clean drinking water and related services.

As the merger process moves forward into its logistical phase, a great deal of oversight from the highest political leadership is important to keep things on track.

Dr. Vaqar Ahmed

Secondly, both the federal and provincial governments of Khyber Pakhtunkhwa will need to help revive agriculture and manufacturing activities that ultimately help in creating jobs. For this purpose, detailed assessments are already available regarding agriculture and livestock activities that can be scaled up quickly. Non-farm activities and the setting up of basic industries can be promoted through fiscal incentives including long-term tax breaks. 
These industries should be set up not only for local supply but as new land-based trade routes with Afghanistan open up, they should be exported to meet a new and rising demand for fast-moving consumer goods there. 
Third, local youth will only find jobs in new manufacturing units if they have the skills required. For this purpose, there is a need for increased vocational training facilities with new equipment and a modern faculty that wants to teach by world standards.
Fourth, the PTI government has already aggressively promoted the tourism potential of Khyber Pakhtunkhwa province. With the return of law and order in erstwhile FATA regions, tourism will undoubtedly promote local startups. As an example, Pakistan’s largest diaspora across the world works in the Gulf states and belongs to the tribal areas. Several of them have children who have never visited Pakistan. Encouraging their families to visit and discover their roots will be targeted, innovative marketing.
– Dr. Vaqar Ahmed is joint executive director at the Sustainable Development Policy Institute (SDPI). He has served as an adviser to the UN Development Programme (UNDP) and has undertaken assignments with the Asian Development Bank, the World Bank, and the Finance, Planning and Commerce Ministries in Pakistan.
Twitter: @vaqarahmed

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