#1SOCIO-ECONOMIC UPDATE OF KHYBER PAKHTUNKHWA: REVIEW FROM THE EOT PERSPECTIVES Dr. yasir Kamal & Dr. Rafiq Institute of Management Sciences, Peshawar.#2Outline of the presentation . Economic Indicators Education Social Indicators Priority Sectors/Potential Sectors Institutional Reforms (Governance) Policy Documents & Research Future Research Area#3. Economic Indicators Agriculture • Farm Area 10.53 % (5570 K hector). Major Corps (Maize=18.87%, Barley=18.03%, Tobacco=70%). . Live Stock Cattle drop from 20% to 14.2 %. Goat 17.8% to 11.9%. * All figures are given as Percentage of total production of Pakistan#4Growth Rate 10.00% GDP Growth Rate of Khyber Pakhtunkhwa 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 抽 0.00% 2014-15 2005-06 ■Growth Rate 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 8.07% 9.15% 3.35% 3.70% (R) 1.24% 5.98% 4.01% 5.44% 4.57%#5Sectoral Share in Gross Domestic Product (GDP) S.# GDP Sectors/Sub-sectors 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15(R) I Commodity Producing Sector 51% 51% 51% 50% 47% 48% 48% 47% 46% 46% (A+B) A Agriculture Sector 28% 26% 25% 24% 24% 24% 23% 23% 22% 22% i Crops 6% 6% 6% 5% 5% 4% 4% 4% 4% 5% a Major Crops 4% 4% 3% 3% 3% 3% 3% 3% 3% 3% b Minor Crops 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% ii Livestock & Poultry 19% 18% 17% 17% 17% 18% 17% 17% 17% 16% 111 Fisheries 0.2% 0.3% 0.2% 0.2% 0.1% 1.0% 1.3% 0.4% 0.9% 1% 1V Forestry 2% 2% 2% 2% 2% 2% 1% 1% 1% 1% B Industrial Sector 23% 24% 26% 26% 23% 24% 25% 24% 24% 23% Mining and Quarrying 3% 5% 4% 4% 5% 6% 6% 7% 7% 6% 11 Manufacturing 11% 12% 11% 11% 11% 11% 12% 11% 11% 10% a Large Scale Manufacturing 9% 9% 9% 9% 8% 8% 9% 8% 8% 8% b Small Scale Manufacturing 1% 1% 1% 1% 2% 2% 2% 2% 2% 2% C | Slaughtering Industry 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 111 Construction Industry 5% 6% 6% 5% 5% 5% 5% 5% 5% 5% iv Electricity Generation and 4% 3% 5% 6% 3% 2% 2% 2% 2% 2% Distribution and Gas Distribution a Electricity Generation and 4% 2% 5% 6% 2% 2% 2% 2% 2% 2% Distribution b Gas Distribution 0.48% 0.38% 0.42% 0.34% 0.35% 0.22% 0.33% 0.23% 0.21% 0.22% C Services Sector 49% 49% 49% 50% 53% 52% 52% 53% 54% 54% i Wholesale & Retail trade 14% 15% 17% 16% 18% 18% 19% 20% 21% 22% Transport, Storage & 13% 13% 13% 14% 15% 13% 12% 11% 11% 10% Communication 111 Finance & Insurance 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% iv Housing Services (OD) 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% V General Government Services 6% 6% 5% 5% 5% 6% 6% 7% 7% 7% vi Other Private Services 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% Regional GDP of KP (Basic 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Prices)#6Major industrial and Mineral Productions Cement 29.49* Cigarettes 36.15* Vegetable Ghee 20.85* Mineral Chromite 30.95* Gypsum 25.72* Lime stone 31.53* Marble 57.51* Silica Sand 20.15* * All figures are given as Percentage of total production of Pakistan#7NY 2500 2000 1500 NE 1000 500 2011-12 2012-13 2013-14 Total Running Closed#8S. No. Groups Units 20012-13 Production %age Changes 2013-14 2013-14 over 2012-13 1 Beverage Industries (000)Ltr 109,400 151,469 +38% i Fruit Juices (000)Ltr 64,686 30,368 -53% 11 Syrups and Squashes (000)Ltr 34,349 32,666 -4.89% 2 Cement (000)M.T 9,328 9,237 -1% 3 Ceramics i Sanitary Ware (000)No's 81.5 87.6 +7.5% ii Wall Tiles (000)Sq.Mtr 4 Cigarettes (000)No's. 2,155 22,976,000 2,140 -0.7% 23,312,000 +1.5% 5 Textile i Cotton Cloth (000) Mtr 13,372 2,613 -80% 11 Cotton Yarn (000) M.T 110.84 121.47 +10% 6 Electric Bulb i Electric Bulb (000) No's 44,204 40643 -8% ii Electric Tubes (000) Mtr 1,093 7 Fertilizers (000) M.T 57.822 75.624 +30% 8 Matches (000) No's. 4,757000 4,580000 -3.7% 9 Paper & Board i Paper (000) M.T 7.154 6.817 -4.17% ii Paper Board (000) M.T 6.359 8.062 +27% 10 Sugar (000) M.T 342.20 341.34 -0.25% 11 Vegetable Ghee i Cooking Oil (000) M.T 47.059 60.959 +30% ii Vegetable Ghee (000) M.T 261.817 246.177 -6% 12 Woolen i Blanket (000)No's. 62.5 57.9 -7.3% ii Fiber (000)Mtr 1,574 1,711 +8.7%#9Education . Primary Schools 14.29% Middle Schools 6.00% . High Schools 6.47% . Degree Colleges 17.21% * All figures are given as Percentage of total production of Pakistan#10Table: 7: Number of Mainstream Govt. Institutes, Enrolment and Teachers by Level (Number) Year 2011-12 All Primary* 2,838,721 Enrolment 2012-13 2,842,776 Institutes Teachers 2013-14 2011-12 2012-13 2013-14 2011-12 2012-13 2013-14 3,012,593 22,760 23,073 22,892 76,285 77,452 78,199 Middle 230,645 229,955 237,518 2,557 2,577 2,612 17,717 17,501 21,492 High/Secondary 591,292 625,209 663,232 1,836 1,980 2,027 2,6712 2,8315 30,085 (9 to 10) Higher Sec 210,796 232,079 249,122 303 345 361 9,233 10,482 10,763 Degree Colleges 141,018 148,641 151,166 145 158 160 87,713 91,791 97,373 Post Graduate 4,254 4,777 4,112 20 Colleges(xv+xvi) 20 20 21 1,124 1,381 1,412 Colleges of Management 13,870 13,038 18,017 25 27 28 606 606 671 Sciences Technical & Vocational 4,809 4,809 4371 47 52 49 449 449 373 Institutes Technology & Polytechnic 6,112 6,112 17,100 25 25 Institute 22 22 508 508 460 Universities 77,501 19 3,984 Total 3,900,499 3,958,755 8,644,633 27,573 28,099 28,031 132,634 136,694 151,423#11Social Indicators • • • Health (Hospitals 16.6%, Dispensaries 8.11%, MCH Centre's 8.2%) Poverty 44.3% Population 13.40% to 14%. Literacy Ratio 53%#12Table:. Health Facilities in Khyber Pakhtunkhwa both Govt. & Private. INDICATORS/YEARS 2009 2010 2011 2012 2013 2014 2015 Total 163 172 177 183 183 190 Govt. 129 138 143 147 147 157 Hospitals Private 34 34 34 36 36 33 No. 89 86 86 91 91 92 RHCS Beds 1,331 1,435 1,421 1,538 1,548 1514 No. 781 783 781 776 785 771 BHUS Total 411 421 425 442 434 446 Govt. 393 402 406 406 425 Dispensaries Private 18 19 19 19 9 No. 25 26 26 26 26 30 T.B Clinics Beds 134 72 72 82 82 62 No. 55 55 67 68 57 55 Mother Child Health Care Centers Total 13,814 15,340 16,020 16,887 16,887 17602 Govt. Beds in Hospital 12,568 13,912 14,951 15,764 15,764 16619 Private 1,246 1,428 1,069 1,103 1,103 983 Total 87 91 91 96 79 26 Govt. 62 66 66 71 71 Beds in Dispensaries Private 25 25 25 25 8#13Table: Employment Shares by Sectors (%),KP Major Sectors 2010-11 2012-13 2013-14 Table: Labor Unemployed, KP (million) Employment force, Employed and Total Male Femal Total Male Femal Total Male Femal e e e Total 100 100 100 100 100 100 100 100 100 Agriculture/Forestry/Fis hing 37.95 % 30.41 % 72.67 % 36.79 % 28.1% 76.79 % 37.2% 28.27 77.88 % % Mining and Quarrying 0.48% 0.58% 0% 0.1% 0.11% 0.06% 0.17% 0.21% 0% Manufacturing Years 2010-11 2012 2013- Construction -13 14 10.24 % 9.66% 12.91 9.01% 9.27% 7.79% 10.18 % % 12.41 9.01% % 12.96 % 15.73 % 0.17% 12.42 % 15.01 0.45% 11.83 % 14.35 0.39% % Electricity, Gas and 0.49% 0.6% 0% 0.97% 1.16% 0.11% 0.82% 1% 0% Water Supply Wholesale & Retail 14.41 % 18.03 1.01% % 15.31 % 18.46 0.78% % 14.88 18.12 0.11% % % Labor Force 6.58 6.72 6.45 Transport, Storage & Communication 7.34% 8.91% 0.17% 9.49% 11.44 0.5% % 9.26% 11.23 0.22% % Employed 6.05 6.14 5.91 Public Administration & Defense 3.51% 4.17% 0.45% 3.6% 4.33% 0.17% 2.76% 3.32% 0.22% Unemployed 0.53 0.58 0.54 Finance, Real Estate Insurance, and 1.07% 1.3% 0% 1.68% 1.96% 0.39% 1.48% 1.8% 0.05% Business services Community, Social and 8.14% 7.54% Personal Services 10.89 8.43% % 7.67% 11.88 8.93% % 8.51% 10.84 % Others Services 2.46% 2.65% 1.57% 2.2% 2.46% 0.95% 2.5% 2.76% 1.33% Activities#14OVERVIEW OF PRIORITY SECTORS#15Energy Hydroelectricity generation capacity for Khyber Pakhtunkhwa is estimated to be 25,000 MW. Existing Hydel stations in Tarbela, Warsak, Dargai and Malakand located in the province are connected to the national grid line. KP has received the long overdue Hydel profit arrears amounting to Rs. 110 billion. The entire amount has been remitted to the province over a period of four years starting from FY 2010/11 into equal annual installments of Rs. 25 billion. Further, the province will receive Rs. 12 billion for the year 2015-16 in terms of Hydel profits (Planning&Development, 2015).#16Minerals . ⚫ Mineral Resource categories available in the province are as under: Dimension stones i.e. marble, granites and other decorative stones • . 1 billion tones reserves of different types of marble (P&D, 2015). ⚫ Light colored granites in northern parts with estimated resources of 100 million tons. ⚫ The share of the province in Gross Value of Production and Gross Value Added in all minerals in Pakistan stood at 3.82 and 3.6 percent respectively (Planning & Development, 2015). However, KP contributes about 78 percent of the marble Production in Pakistan. Gemstones i.e. emeralds, topaz, corundum, tourmaline, aquamarine, peridote, etc Industrial rocks & minerals i.e. phosphate, soapstone, feldspar, gypsum, rock salt, limestone, silica sand, etc Fuel Minerals i.e. Coal. • Metallic minerals i.e. including gold, silver and base metals (copper, lead, zinc, antimony, etc.)#17Agriculture . • • Cultivated area is 29.53 percent and irrigated area is 50 percent of the cultivated area (Planning & Development, 2015). Land use intensity is 61.71 percent and cropping intensity is 106.02 percent (SMEDA, 2010). The major agricultural crops of the province include Wheat, Maize, Tobacco, Gram, Jowar, Bajra, Barley, Rice, Sugarcane, Sugar Beet, Fruits and Vegetables. A total of 2.56 million workforce is involved in trade, commerce, industry and agriculture sector which constitute 15 percent of the total population of the province (SMEDA, 2010). • Amongst these sectors, the agriculture sector takes the major share of the work force i.e. 40 percent of the total labour force and contributing more than 20 percent to provincial GDP (SMEDA, 2010). • The Province has a comparative advantage in term of fruits and vegetable production over Punjab, though the area under Horticulture is 6 percent as compared to 9 percent in Punjab (IGC, 2014). Similarly, other agricultural advantages include the tobacco farming and processing in the area.#18Tobacco • ° • • • In Khyber Pakhtunkhwa, various types of tobacco, such as Flue Cured Virginia, White Patta and Burley are grown. In the overall production of tobacco in the country, nearly 75-80 per cent of tobacco is produced in Khyber Pakhtunkhwa (Khan, 2013). The Flue Cured Virginia commonly known as cigarette tobacco is the main cash crop of growers of districts Swabi, Mardan, Charsada, Bunner and Mansehra, producing 60-70 million KGs of the World standard tobacco (Khan, 2013). The Federal government is the main beneficiary of the crop because it annually gets Rs. 46-47 billion as Central Excise Duty which constitutes 70 percent of the price of cigarette while Pakistan Tobacco Board gets Rs. 60-65 million in shape of Tobacco Cess and the provincial government of Khyber Pakhtunkhwa gets more than Rs. 100 million in shape of provincial Tobacco Development Cess (Khan, 2013). Approximately 6-8 percent of tobacco is annually exported (Khan, 2013). Oil & Gas Khyber Pakhtunkhwa has Oil & Gas reserves of one billion barrel oil and four trillion cubic feet gas. Oil & Gas Development Company (OGDCL) holds the largest stake in exploration activity of oil and gas. Oil & Gas sector has a great potential of attracting foreign direct investment. In Khyber Pakhtunkhwa, huge deposits of oil and gas have been discovered in the southern belt of the province, including districts Kohat and Karak. Khyber Pakhtunkhwa has generated Rs.17.5 billion revenue during the financial year 2014-2015 from oil and gas royalties. According to the budget documents of the same year, 5 percent of the amount has already been transferred to districts where major Oil and Gas exploration occurred like Kohat and Karak (Daudzai, 2015). This is expected to serve as an engine of economic change in the area.#19• Tourism . . • • Currently, Private sector owns 90 percent of the Tourism and Hospitality industry but investment is restricted only to Hotel and Transport facilities (Planning & Development, 2015). Main tourism hubs of the province include Narran, Kaghan, Galiyat region, Chitral, District Swat, Madain, Abbottabad, etc. In year 2009, Khyber Pakhtunkhwa earned revenue of Rs.974 million because of foreign tourism. According to IGC (2014), the total number of domestic tourists visiting KP in a year 2014 was about 8.8 million, which is 19 percent of total national domestic traffic. The government of Khyber Pakhtunkhwa had allocated Rs.1.21 billion for 53 projects relating to tourism and sports. The province is also offering health and educational tourism facilities to mainly Afghan nationals. Comprehensive Development Strategy 2010-17 Integrated Development Strategy, 2104-18 www.khyberpakhtunkhwa.gov.pk#20SWOT Analysis of KP Economy#21Strengths . Strategic location . ⚫ - Abundant synergies exist between Pakistan & Afghanistan. -Exports to Afghanistan has increased from 0.6 billion in year 2010 to 2.5 billion in year 2014. Additional Resources • ⚫ - More autonomy to the provincial government to manage its affairs after18th amendment. • -Allocation of greater financial resources in 7th NFC award. Increased urbanization • • -The population density for Peshawar is 2,716 person/sq.km. -For Mardan, Charsadda & Swabi it is 1,000 persons/sq.km. -Led to greater public & private investment in urban amenities.#22Strengths Growing consumer market • • Population of KP 28 million (approx.). KP population growth rate 2.93 percent. Remittances • • KP share is 25 percent out of a total workforce abroad. In Pakistan remittance accounts for 60 percent of exports earning i.e. US$ 13 billion. Geographical advantage • Gwadar is the shortest port for Afghanistan, China & CARS' for trade. India for trade with Afghanistan & CARs' can use KP as a transit route.#23Strengths • • • • Rich mineral resources and quality raw materials Mineral sector is one of the cash cow sector of KP. KP has an estimated reserve of 1 billion tons of marble reserves, found in 30 different varieties. Rich resources of energy (hydel power) KP has a potential of producing 25,000MW of electricity. Governance Current KP government's Charter of Good Governance. Current KP government's resolve to eradicate corruption. Legislation (RTI, RTS, Police Act, University Act, Ehtesab Commission, Complaint cell, E- Services, PPP Act, Conflict of interest Act). New Institutions • • Establishment of TEVTA & Technical University. KPBOIT, KPOGCL, PEDO, KPEZDMC etc.#24Weaknesses Bureaucratic lethargy and red tapism Lack of continuity and ownership of the public sector institutions. Macro level instability. Low, slow and unstable economic growth . KP grew by 4.2 percent in year 2011-12. Below national average of 4.6 percent. KP's 83 percent of the population living in rural areas. Poverty • KP's45 percent population lives below poverty line.#25Weaknesses • • . Unemployment and low level of labor force participation KP's unemployment rate is estimated to be 9 percent as compared to National level unemployment rate stands at 6 percent. KP's labor force participation is 37 percent as compared to National level average is 46 percent. General law and order situation Due to law & order situation the current level of private investment is only 8.7 percent of total GDP of KP. Ease of doing business ranking • Peshawar is ranked 8th in Pakistan by World Bank's ease of doing business rankings. Faisalabad & Lahore, ranked 1st & 3rd respectively.#26Weaknesses • Legal and financial institutional framework Poor infrastructure • Destroyed infrastructure due to ongoing armed conflicts and natural disasters. Positive relationship between improved transport infrastructure and poverty alleviation. ⚫ Low human resource base and skill levels . • In KP large proportion of the youth have poor educational attainment & skill development. High insecurity • Fallout of the US led war in Afghanistan. Rise of militancy. After 2005, KP became the second most violent part of Pakistan.#27Weaknesses Inconsistent and unreliable supply of utilities • Poor performance of KP's manufacturing sector due to energy shortages i.e. electricity, communications and water. Weak public-private collaboration Weak investment promotion agencies Higher costs of doing business • In 2016, World Bank has ranked Pakistan as 138th in terms of ease of doing business. • Negative travel advisories from US, EU etc.#28Opportunities • Link up with CPEC The 2,400-kilometer corridor would include SEZs', railway system, a model city, an airport as well as a free port at Gwadar. ⚫ Economic and trade gateway to Afghanistan . • • Special Economic Zones (SEZ's) Demand for products in the regional and international markets Certain agro-based products, fruits, carpets, marble and granite, gems/jewelry, handicrafts etc. have a huge potential. War-effected economy with huge potential for revival and trade/commerce activities, especially in war-affected districts#29Opportunities • Potential for investment in key industries/sectors • • • • Construction Agriculture & Horticulture Hydel & Hydrocarbons Tourism Mining Carpet Industry Furniture Pharmaceuticals Petrochemicals mineral based industries . Openness to Foreign Investment#30. • Threats Flight of capital as Punjab and Karachi are more investor friendly. Flight of workforce to Punjab and Karachi Energy Crisis Worsening energy shortages & significant increase in its prices is badly impacting KP as potential investment hub. Unsustainable government spending Crumbling infrastructure and alarming demographics Other socio-economic threats Rising street crimes &extortion Rising cases of Polio, hepatitis, HIV and respiratory diseases#31Policy documents Develop in Recent Past • Policy Documents & Research . • • Industrial Policy Investment Policy (Draft) Mining Policy Public Private Partnership Act EPA Act 2014 IGC Report:Claiming Prosperity of KPK Integrated Growth Policy Public Account Committee Future Research Area Sectorial Analysis CPEC#32• • • Institutional Reforms in Recent PAST RTI RTS Police Reforms Ehtesab Commission KPBOIT KPEZDMC KPOGRA PEDO Complaint Cell Dispute Resolution Council