Origins of poverty in south Punjab

Bahawalpur district has often been mentioned as a breeding ground of extremism in south Punjab. And the recent term “Punjabi Taliban”, rightly disputed by many analysts, raises the question as to what economic circumstances might have contributed to this phenomenon.
This article offers a closer look at industrial and commercial profile of Bahawalpur to explore the origins of rampant poverty in a leading district of south Punjab. Poverty in south Punjab has continued unabated over many decades and is still rampant despite the political rhetoric about allocating “enormous resources” for its development.
Amartya Sen, a Nobel Laureate in economics, opened his speech on “Poverty, evil and crime,” in October 2007 at a UNDP conference with some unusual remarks which bear a startling relevance to poverty stricken Bahawalpur “Exactly 100 years ago, George Bernard Shaw argued that “The greatest of evils and the worst of crimes is poverty.” Shaw wrote this in the preface to his brilliant play, Major Barbara, published in 1907.... But Bernard Shaw was not talking about the hardship of poverty, or the misfortune that goes with it. He was commenting about the causation and consequences of poverty - that it is bred through evil and ends up being a crime.”
Bahawalpur is a painful tale of missed opportunities and misfortunes. The district is characterised by high poverty levels. The urban areas are ranked as 25th and rural areas 31st most deprived district out of Punjab's 34 districts. A comparison between the poor and non-poor population in Bahawalpur indicates that unemployment rate is double for the poor; while there is a considerable literacy rate gap of 15 per cent between the two groups.
A similar pattern emerges at individual level, albeit worsened, whereby the employed poor actually have a negative yearly income growth in real terms after inflation adjustment. Literacy figures reveal the current vicious cycle for the poor where urban literacy rate stand at 57 per cent viz-a-viz a dismal literacy rate of 26 per cent for the rural population.
Bahawalpur's industrial and commercial profile demonstrates poor economic opportunities in line with its social parameters. The district economy is largely agriculture based. Cotton, wheat, many other major and minor crops and horticulture are backbone sub-sectors.
Recent price improvement in cotton and wheat has benefited the farmers. Livestock is another potential sub-sector which almost contributed half of agriculture output. Supply chain links are very weak as there is no significant food processing, meat and dairy processing facilities for value addition, investment and job creation.
Water scarcity is increasingly taking its toll on agriculture production. On farm job creation has its own limitations which force the labour to move to urban areas which have so far demonstrated equally limited capacity of non-farm job creation.
Bahawalpur has only one small industrial estate developed in 1970 by Punjab Small Industrial Estate Corporation. The industrial activities were jolted because of devastated flooding in 1988. Currently, only 49 small industrial and commercial establishments are located there.
It is one of the unique industrial estates where many plots have been illegally sold and registered for residential purpose. Then the meagre industrial activities of the estate were further hampered due to Wapda's decision to downgrade the feeder of industrial estate from “industrial” to “residential”. Excessive load shedding and status of non-industrial electricity connection explains government's weak focus on industrial development.
Another industrial estate of 375 acres under Punjab Industrial Estate was announced some two years back. But this announcement is still going through the usual bureaucratic stress test for PC-1 approval. Since then, Bahawalpur Chamber of Commerce and Industry is perusing without much success to get approval of earmarked land from the provincial administration.
Bulk of the industrial base of the district comprises125 ginning factories (which operate on seasonal basis), 35 flour mills, two ghee mills, one poultry feed mill, two solvent extraction plants and three rice units. Nearly all industrial units fall in the central bank's definition of SME. Large industrial units include three spinning mills and one sugar mill.
Bahawapur has very slow pace of new enterprise development. The District Office of Enterprise and Investment Promotion has an accumulated registration of 453 religious schools and 1,120 firms. Trade associations of the area expressed reservations on the validity of these figures, saying that almost of half of the registered firms might be inactive as closure of businesses, a natural process of business life cycle, has never been accounted for. No survey has ever been conducted to update the data of active firms.
Industrial and commercial activities of the district are dominated by small and medium size enterprises. SME's face numerous constraints. Leading constraints include, access and cost of finances, regulatory constraints related to taxation and labour laws, weak market linkages, lack of need based trained human resource, weak management skills, insufficient and obsolete infrastructure, frequent power shortages, high cost of doing business including high land prices, lack of cluster facilities both for SME's and artisans, entrepreneurship deficit etc.
Economic analysis of factor production in south Punjab explains the unholy nexus of illiteracy and poverty. The political elite has done great harm to economic well being of the area by offering only lip service to eradicate poverty and has ignored its economic uplift. Status quo rather than a progressive economic development agenda has prevailed. It is common in south Punjab to observe poor parents leave their children with traditional Madaaris, hoping they will be assured of food.
Extremism and militancy has eroded the overall economic stability. It is vital to initiate targeted investments to create enough employment and improve the social index to discourage people from leaning towards extremism. It is a long haul, but worthwhile to undertake, to liberate the masses of south Punjab from the deadly trap of poverty which is now taking its toll on national security.
Curtsey:DAWN.COM,  August 02,2010