NationalVOLUME 18 ISSUE # 26

China and reconstruction opportunity zones in KP tribal regions

Since the present 13-party ruling alliance has come to power in April 2022, it has completely ignored the merged tribal districts (MTDs) of the former Federally Administered Tribal Areas (FATA). The biggest proof of it is that the issue of 3pc NFC of all provinces which they had agreed to provide to the tribal regions has not been settled. The provinces have reneged on their promises to provide 3pc of their share of National Finance Commission (NFC) funds to KP, which they had made at the time of the 25th Constitutional Amendment in 2018 through which the areas were merged into Khyber Pakhtunkhwa.

Almost five years have been completed since the merger but no meaningful development in the regions could take place. Rather the merger has affected the process and pace of development of the province, which has been singlehandedly bearing the burden of the merged districts despite them being federal areas before the merger.

Development is a process in which the economic aspect is of vital importance as other dimensions of development largely depend upon it. Any meaningful development in the former FATA could only be brought about if the region is developed economically. This economic development must come from within, not from without. However, the outside support is crucial for enabling the tribal areas of KP to make development from within. In this regard industrial development is quite important. The tribal regions of Pakistan on the Afghan border could not develop industries for a host of reasons. All efforts from the government over decades and some investors from the region failed to establish any worthwhile industries there. The previous government of the Pakistan Tehreek-e-Insaf (PTI) understood the importance of industries in the economic development of the tribal regions and had therefore requested the United States government to revive its former plan of establishing elaborate industrial infrastructure in the former FATA.

Acknowledging the grave mistake of the past governments, the PTI had requested the United States to revive the idea of establishing ROZs (Reconstruction Opportunity Zones) in Pakistan-Afghanistan bordering areas. In this regard, the then Adviser to former Prime Minister Imran Khan on Commerce, Textile, Industry and Production and Investment, Abdul Razak Dawood, tried to convince Washington to restore the idea of ROZs as it was critically important for the socioeconomic development of the tribal regions. The proposed RoZs were indeed a very important project offered by the US and had a huge potential for bringing about a sea socioeconomic change in the remote and impoverished region. However, due to complete mismanagement by Pakistani policymakers, whoever they were, and the bureaucracy, the project had to be abandoned by Washington. The ultimate losers have been the residents of the border regions and the country. The conflict and crisis prevailing in the border region of Pakistan along Afghanistan have continuous outpouring to the adjoining KP province and the rest of Pakistan.

The US had come up with the idea of building ROZs in the bordering areas to ensure jobs for locals in a bid to stop them from joining militant groups and indulging in terrorism. Alas, the idea was mishandled by the then economic managers of the country as they quite illogically had started asking US authorities to build ROZs in mainland Pakistan, including a peaceful Punjab province. Resultantly, the US ditched the project as establishing RoZs in mainland Pakistan could not serve the purpose of the idea but not before consistent bids to convince Pakistani authorities about establishing RoZs in the ex FATA.

The US had come up with the idea in the Musharraf regime while keeping the success stories of the model in the bordering areas of Egypt, Vietnam, Jordan and Israel, where such industrial establishments had already been commissioned and were bringing dividends to the people of the bordering areas.

One of the underlying reasons for every conceivable ill that has engulfed the Pakhtun tribal areas of Pakistan is the lack rather absence of economic opportunities, particularly employment. This in turn has been due to the absence of any economic infrastructure there. Due to largely rugged and mountainous topography, agriculture cannot be carried out extensively in the border regions. The only other viable economic options through which economic opportunities could have been created are minerals exploration and development and setting up manufacturing units.

The US, during General Musharraf’s rule, had floated the idea of establishing industries under ROZs for its own strategic interests in the region. Realizing that extremism and terrorism could be effectively countered by preventing legions of impoverished, malnourished and radically backward tribesmen of Pakistan from joining the ranks of local and global terrorist organizations and stopping the tribal areas from becoming hubs of extremist-terrorist outfits was to give economic space to the region’s residents. For this elaborate economic infrastructure like ROZs was a must.

The dilly-dallying by Pakistani authorities about the RoZs during the Musharraf regime was mainly due to the ‘indifferent’ and ‘strange’ logic on their part. For a long time the main bottlenecks in negotiations about ROZs had been the inappropriate demands from Pakistani negotiators to include the October 2005 earthquake affected areas of KP’s Hazara division and Azad Kashmir as well as textile-producing areas of Punjab in the idea and extension of concessions to these areas which the US was offering for the former FATA. The industrialists and businessmen of urban areas were hand in glove with officials to hijack the plan for their vested interest. Because the idea envisaged the provision of zero-tariff excess to products of industrial units thus established to US markets. This indeed would have been a big benefit for Pakhtun tribal regions industrial infrastructure to become self-sustainable but the effort on part of the greedy industrialist-business lobby to see profit in ROZs for themselves was unfortunate and the whole country has paid dearly for their chicanery. Nevertheless, the Americans, cognizant of their strategic and general interests and the compatible needs of the residents of the tribal regions, resisted the undue demands from certain Pakistani officials and businessmen and stuck to their original plan.

The proposal of ROZs or other similar plans have been so critical for the all-round uplift of the Pakhtun tribal regions, which even the Americans might not have envisioned while coming up with the idea, therefore, more seriousness and commitment was required from the US as well as the Pakistani side. The present ruling alliance has to request the US in earnest to revive the ROZs. More importantly, if Washington remains unmoved, Pakistan must ask China to implement the ROZs and then give the products zero-tariff access to Chinese markets as it is the only meaningful way to establish industries in the MTDs.