Empowerment of Business Community

Issues surrounding the Economy of Azad Kashmir: A Businessman’s Perspective

19th October 2020 | Chaudhary Ghulam Murtaza
Azad Jammu and Kashmir (AJ&K) can be divided into two geographical clusters; the Northern part comprises of the capital Muzaffarabad and Poonch while Mirpur and Kotli are located in the Southern part. Economic dynamics of the northern part are dependent on public sector services in Muzaffarabad & private sector services in Poonch division, with common partial reliance on tourism and agriculture. Whereas the southern part is more dependent on the foreign remittances and agriculture.

The historical economic dependence of both the regions has been on the agriculture, cottage industry and services. From ancient times, this region has been the gateway to the great Silk route connecting China to the rest of the world on one hand and on the other hand, it was the only trade route connecting the Kashmir Valley (IOK) to the rest of the world.

In my view, modern-day education, agriculture, export, industry, and tourism are some of the prime prospective sectors of importance for the region in terms of economy. However, lack of internal road connectivity, poor internet and telecommunication services, lack of international standard education system, absence of proper irrigation system, meager tax incentives for industry, insignificant investment on the hydel power resources, unaddressed environmental hazards related to the water reservoirs and rerouting of rivers, non-existence of research and development projects in priority sectors, and poor governance with low development budgets are some of the important barriers to economic growth in the region.

The following shall cover some of the high value economic opportunities and challenges missed or ignored in recent times.

4 M-Mansehra-Muzaffarabad-Mirpur and Mangla Road
The northern & southern geographical divisions of the small state of AJK are not properly connected through a decent highway. Unfortunately, despite the dire need of internal road connectivity as the bloodline of the economy since independence, this high-value economic pillar has constantly been ignored by the political elite of the state and federation.

This internal road connectivity, if established, shall generate enough economic activity in AJK to steadily support the economic backbone of the State.

All the tourists from Punjab, Sindh and Baluchistan; travelling to the northern areas of Pakistan, shall be using this very route for at least one side of their trip. This activity alone shall be enough to pay back the cost of the project in a couple of years.

The high altitude Agri produces shall reach the lower altitude markets in a short time to boost the traditional agriculture sector throughout the State.

The cost of transporting sale products between different parts of the State shall be minimal and the facilitation in the delivery services and industrial sectors shall enhance the value addition.

Apart from the tremendous economic benefits, this road project holds key to socio-political integration of the State of AJK.

The current differences between AJK and Gilgit-Baltistan can be surely traced back to the lack of socio-political integration of people due to the poor road connectivity between the two parts of the State of J&K.

Very recently, this road connection was considered under the CPEC project and many milestones of feasibility testing and approvals were passed. Unfortunately, this high-value project of Economic & Socio-Political importance has been criminally ignored not only by the PML-N government but also by the opposition parties of AJK.

Very recently, this road connection was considered under the CPEC project and many milestones of feasibility testing and approvals were passed. Unfortunately, this high-value project of Economic & Socio-Political importance has been criminally ignored not only by the PML-N government but also by the opposition parties of AJK.

In 2017, while the PML-N government was in power in AJK and the federation, this project was one of the priority projects in CPEC but unfortunately, it has been suspiciously ignored by the new CPEC administration for unknown reasons.

In 2017, while the PML-N government was in power in AJK and the federation, this project was one of the priority projects in CPEC but unfortunately, it has been suspiciously ignored by the new CPEC administration for unknown reasons.

High-Speed Internet Connectivity
The service sector, IT export, small size exports, modern education and socio-political impact on the Kashmir issue are highly dependent on this service but unfortunately, it has unwisely been ignored by the recent governments.

Under the very recent CPEC project, Gilgit-Baltistan was able to secure a high-speed fiber optic project for the region but the political government of AJK was unable to table any project of this scale. This was the most recent opportunity missed by the current government of AJK and the opposition parties were also ignorant of such valuable aspects of huge importance.

Special Economic Zone (SEZ)
Under the CPEC project, AJK was offered a Special Economic Zone by the Federal Government. This project was initially mishandled for the political purposes and then, criminally delayed to be tabled, thus almost shelved even after wasting huge financial resources on its feasibility tests and surveys.

The industrial activity in Mirpur has traditionally been the highest in Azad Jammu & Kashmir. Mattress foam, motorbikes, Polypropylene, Steel, textile, mobile phone assembling and cigarettes are some of the prominent areas of production in the region. The industrial sector is continuously on a steep declining trend after reaching its peak in the sixties due to many internal and external factors.

A Special Economic Zone (SEZ) was declared in Mirpur under CPEC Project but unfortunately, due to many reasons, after strangling for a while, it seems shelved now.

The industrial activity boomed in the eighties due to special tax incentives and the new infrastructure of the industrial estates in Mirpur but now the poor infrastructure and insufficient incentives are causing a shrinking of the industrial activity despite the increasingly competitive advantage in the cost of labor.

The only prospective progressive solution to the declining trend of the industry remains in the SEZ Project under CPEC umbrella for which the political leadership in government and opposition benches can still show commitment to carry forward this important project to a tangible form.

Agricultural Spectrum
Agriculture has been a traditional source of bread and butter in the region. AJK possesses some of the best plains, agricultural lands and high-altitude croplands. Hence, the State possesses great potential for agricultural growth.

4 M/Kashmir Highway Road Project
can connect the high altitude regions to the low altitude markets for the high value of the agricultural produce.

Irrigation water through Mangla Dam
Provision of water for irrigation through Mangla Dam was a contractual obligation of WAPDA and the Federal Government but due to reasons best known to them, the project is almost shelved without initial commencement. The fulfillment of this one commitment and contractual obligation of creating a water channel of 650 Q of water leading to the tail of district Bhimber can enable AJK to become self-reliant in its food-related needs.

A very large number of organic tasty fish is produced in the Mangla Dam annually. This number can be substantially increased with scientific research and increased hatchery support. The true value addition of this organic fish through processing, packaging, branding and serving can maximize the yield of this rich resource.

Intra Kashmir Trade
The lack of official ownership has resulted in the discontinuation of the intra-Kashmir trade started in 2008 between the two divided parts of the erstwhile State of Jammu and Kashmir. This trade was not only a source of generating a sizeable economic activity in the region but was also a means of earning livelihood for hundreds of thousands of traders and the associated transporters.

This intra-Kashmir trade can be resumed with the grant of its political ownership in both parts of Kashmir and India-Pakistan.

Conclusion

Four M /Kashmir high way, high-speed internet, SEZ under CPEC and Water Canal in Bhimber are the future economic lifelines of AJK. Both the Government of AJK and the Government of Pakistan should pay attention to these long pending projects and make sure their early execution.

The Government and opposition parties should sit together to devise a common strategy to attain these equitable projects and services. If the Government finds it difficult to get it done through the CPEC, it may invite international financial institutions or the private sector to fund these highly feasible projects on their own.

Chaudhary Ghulam Murtaza

The writer is the former President of Azad Jammu and Kashmir Chamber of Commerce & Industry (AJ&KCCI).

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