Economy of the Federally Administered Tribal Areas
Encyclopedia
The economy of the Federally Administered Tribal Areas is relatively underdeveloped compared to other provinces and administrative territories of Pakistan
. The Federally Administered Tribal Areas
(FATA) are the most impoverished and least developed areas in the country. While FATA has 2.4% of Pakistan's population, it contributes only 1.5% to Pakistan's economy, making it the smallest Pakistani provincial economy in terms of GDP. As of 2010, the per capita income of FATA was $663 and roughly 34% of households had a sustainable living standard
above the poverty level
.
Because of FATA's tribal society, the local economy is mainly pastoral-based, with some practice of agriculture. Households are involved in primary-level activities like subsistence agriculture
, rearing of livestock (see animal husbandry in Pakistan
) and small-scale businesses. Many locals seek employment as skilled and unskilled labourers while others join security agencies and paramilitary forces. Those who are better off or are able to travel migrate to larger cities and urban centres outside the tribal areas within Pakistan and across the Middle East
. A significant number of these are highly qualified professionals and in many cases have settled permanently along with their families outside FATA, contributing to a brain drain
effect and shortage of skilled workers in FATA. Members of the diaspora receive their earnings and send remittances
to FATA to support their families and relatives at home.
There are abundant natural resources prevalent in FATA such as marble
, copper
, limestone
and coal
which can create a potentially thriving mining industry, although the current socio-economic situation has partly hindered their profitable exploitation. Trade with neighboring Afghanistan
plays an active role in FATA's economy, and items imported and exported to the country via trucks pass through supply routes in FATA. The area has also been influenced to a great extent by the active Afghan opium trade. This has made FATA a transitional point for smuggling and trafficking of goods, as well as black markets. There is a sizeable indigenous weapons and firearms manufacturing industry present (see gun politics in Pakistan).
Foreign aid to the region
often remains a difficult challenge, according to Craig Cohen, an analyst at the Center for Strategic and International Studies
in Washington, D.C.
. Because security is difficult, local nongovernmental organizations are required to distribute aid, but there is a lack of trust amongst NGOs and other powers that hampers distribution. Pakistani NGOs are often targets of violent attacks by Islamist militants in the FATA. Because of the extensive hostility to any hint of foreign influence, the American branch of Save the Children
was distributing funding anonymously in the region as of July 2007. There have been calls to implement greater measures for integrating FATA into the mainstream economy. In this regard, there are several economic, industrial and social development reconstruction ventures that have been undertaken by the government recently in order to aid FATA's economy, including the launch of organisations such as the FATA Development Authority
.
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
. The Federally Administered Tribal Areas
Federally Administered Tribal Areas
The Federally Administered Tribal Areas are a semi-autonomous tribal region in the northwest of Pakistan, lying between the province of Khyber Pakhtunkhwa, Balochistan, and the neighboring country of Afghanistan. The FATA comprise seven Agencies and six FRs...
(FATA) are the most impoverished and least developed areas in the country. While FATA has 2.4% of Pakistan's population, it contributes only 1.5% to Pakistan's economy, making it the smallest Pakistani provincial economy in terms of GDP. As of 2010, the per capita income of FATA was $663 and roughly 34% of households had a sustainable living standard
Standard of living in Pakistan
The standard of living in Pakistan differentiates and varies between different classes of society. Pakistan is a largely developing country and according to the Human Development Index, is ranked 125th out of 170 countries, near the lower end of "medium human development."Despite having a growing...
above the poverty level
Poverty in Pakistan
Poverty in Pakistan is a continued source of concern. Although the middle-class has grown in Pakistan to 40 million nearly one-quarter of the population is classified poor as of October 2006. As of 2007-08, 17.2% of the total population lived below the poverty line, which is the lowest figure in...
.
Because of FATA's tribal society, the local economy is mainly pastoral-based, with some practice of agriculture. Households are involved in primary-level activities like subsistence agriculture
Subsistence agriculture
Subsistence agriculture is self-sufficiency farming in which the farmers focus on growing enough food to feed their families. The typical subsistence farm has a range of crops and animals needed by the family to eat and clothe themselves during the year. Planting decisions are made with an eye...
, rearing of livestock (see animal husbandry in Pakistan
Animal husbandry in Pakistan
Being a country that has a largely rural and agriculture-based industry, animal husbandry plays an important role in the economy of Pakistan and is a major source of livelihood for many farmers. It is estimated that there are between 30 to 35 million people in Pakistan's current labour force who...
) and small-scale businesses. Many locals seek employment as skilled and unskilled labourers while others join security agencies and paramilitary forces. Those who are better off or are able to travel migrate to larger cities and urban centres outside the tribal areas within Pakistan and across the Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
. A significant number of these are highly qualified professionals and in many cases have settled permanently along with their families outside FATA, contributing to a brain drain
Brain drain
Human capital flight, more commonly referred to as "brain drain", is the large-scale emigration of a large group of individuals with technical skills or knowledge. The reasons usually include two aspects which respectively come from countries and individuals...
effect and shortage of skilled workers in FATA. Members of the diaspora receive their earnings and send remittances
Remittances
A remittance is a transfer of money by a foreign worker to his or her home country. Note that in 19th century usage a remittance man was someone exiled overseas and sent an allowance on condition that he not return home....
to FATA to support their families and relatives at home.
There are abundant natural resources prevalent in FATA such as marble
Marble
Marble is a metamorphic rock composed of recrystallized carbonate minerals, most commonly calcite or dolomite.Geologists use the term "marble" to refer to metamorphosed limestone; however stonemasons use the term more broadly to encompass unmetamorphosed limestone.Marble is commonly used for...
, copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...
, limestone
Limestone
Limestone is a sedimentary rock composed largely of the minerals calcite and aragonite, which are different crystal forms of calcium carbonate . Many limestones are composed from skeletal fragments of marine organisms such as coral or foraminifera....
and coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
which can create a potentially thriving mining industry, although the current socio-economic situation has partly hindered their profitable exploitation. Trade with neighboring Afghanistan
Afghanistan
Afghanistan , officially the Islamic Republic of Afghanistan, is a landlocked country located in the centre of Asia, forming South Asia, Central Asia and the Middle East. With a population of about 29 million, it has an area of , making it the 42nd most populous and 41st largest nation in the world...
plays an active role in FATA's economy, and items imported and exported to the country via trucks pass through supply routes in FATA. The area has also been influenced to a great extent by the active Afghan opium trade. This has made FATA a transitional point for smuggling and trafficking of goods, as well as black markets. There is a sizeable indigenous weapons and firearms manufacturing industry present (see gun politics in Pakistan).
Foreign aid to the region
Foreign aid to Pakistan
Pakistan receives Foreign aid from several different countries and the International community. Much of this money goes to the development of stability and civil development within the country.The bulk of assistance to Pakistan is from the Coalition Support Fund which is reimbursement "to Pakistan...
often remains a difficult challenge, according to Craig Cohen, an analyst at the Center for Strategic and International Studies
Center for Strategic and International Studies
The Center for Strategic and International Studies is a bipartisan Washington, D.C., foreign policy think tank. The center was founded in 1962 by Admiral Arleigh Burke and Ambassador David Manker Abshire, originally as part of Georgetown University...
in Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
. Because security is difficult, local nongovernmental organizations are required to distribute aid, but there is a lack of trust amongst NGOs and other powers that hampers distribution. Pakistani NGOs are often targets of violent attacks by Islamist militants in the FATA. Because of the extensive hostility to any hint of foreign influence, the American branch of Save the Children
Save the Children
Save the Children is an internationally active non-governmental organization that enforces children's rights, provides relief and helps support children in developing countries...
was distributing funding anonymously in the region as of July 2007. There have been calls to implement greater measures for integrating FATA into the mainstream economy. In this regard, there are several economic, industrial and social development reconstruction ventures that have been undertaken by the government recently in order to aid FATA's economy, including the launch of organisations such as the FATA Development Authority
FATA Development Authority
The FATA Development Authority is a regulatory development organisation which plans and executes construction and development projects in FATA, Pakistan. Based in Peshawar, the body is chaired by the Governor of Khyber Pakhtunkhwa. The authority's objectives are:-External links:* * *...
.
Further reading
- FATA: Tribal Economy in the Context of Ongoing Militancy by Mian, Asif. 15 September 2009.