Mineral resources and deprivation

A recent incident in which six persons, including, at least, two employees of the Hungarian company MOL — engaged in oil and gas exploration at the Maramzai gas field in the Kohat district — were killed after their convoy was intercepted, exposes the many sorrows that arise from decades of poor governance, especially in the smaller provinces. The incident, which has led to MOL suspending operations until adequate security can be provided, is being blamed on Taliban elements — but there are twists in the tale. Local tribesmen had been demanding jobs in the multinational firm, with complaints coming in that employees were hired from Punjab by the Sui Northern Gas Pipeline Limited and the Oil and Gas Development Company.

The provincial government, perhaps best placed to look after security, believed that since it received only 12 per cent as royalty from the millions earned by the federal government for the project, protecting staffers was chiefly Islamabad’s concern. There are many potentially grave implications in such disgruntlement, given that eight other foreign firms are involved in oil and gas exploration in Khyber-Pakhtunkhwa (KP), mainly in Kohat district. Demands by locals for jobs, meanwhile, arise from a situation in which there is growing joblessness and desperate poverty. Blaming the crisis entirely on militancy is therefore not quite correct. While the impact of the attack is being downplayed, the volume of gas supplied to SNGPL and the revenue of organisations engaged in the joint venture agreement with MOL will fall. There is also the fear that the incident may plant ideas about attacks on other gas fields in KP, replicating the situation already seen in Balochistan.

More than anything else, Pakistan needs investment and activity that can generate jobs. The prospects of these today seem bleaker than ever and this augurs ill for the future.

Published in The Express Tribune, February 2^nd, 2011.