Jammu & Kashmir Sprints Past its Pakistan Occupied Part

The union territory of Jammu & Kashmir despite the incessant negative propaganda is winning the economic race. From a hugely backward area with poor connectivity and communications before Independence, the region today shares India's growth story, which has witnessed the country emerging as the world's fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP).

Afzal Farooq
04 August 2022

The union territory of Jammu & Kashmir despite the incessant negative propaganda is winning the economic race. From a hugely backward area with poor connectivity and communications before Independence, the region today shares India's growth story, which has witnessed the country emerging as the world's fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP).

To be sure, Indian remains a poor country in many respects – a feature shared by Jammu & Kashmir – but the essence of the India story is growth and positivity. India has shown that a poor populous country can ascend the prosperity path without resorting to military means, economic coercion, oppressing other nations or unfair trade practices. Jammu & Kashmir is a part of this narrative, and has become more so since the abrogation of Article 370 of the Constitution that promoted isolation and an underdog mentality.

A slew of development projects, from mega schemes like railways connectivity to small projects bringing water and sanitation to villages, is transforming the erstwhile state, which hopefully will soon regain its status as a fully fledged state in the Indian union. These projects have accelerated since the abrogation of Article 370 three years ago.

The unfortunate part of the Kashmir narrative is that sections of the society continue to uphold Pakistan as a role model. This is due to various reasons, including ideological, monetary or anti-India sentiments. The fact however is that Jammu & Kashmir is more fortunate in every respect than the parts under Pakistan's occupation, including the so-called Azad Jammu & Kashmir (AJK) and Gilgit-Baltistan.

While AJK and Gilgit-Baltistan have over the years been pushed to the status of regional backwaters, under-developed and under-reported, Jammu & Kashmir remains in the limelight (both positive and negative) because it is a region that matters in the world.

One statistic showed that tourists in records numbers are visiting Jammu & Kashmir, thereby boosting the local economy. More than 10 million tourists have visited Jammu and Kashmir from January to July 3 this year, according to the Union Minister of State for Home. The minister also said also said nearly 30,000 people have been recruited in the public sector in Jammu & Kashmir since 2019.

In comparison, a miniscule number of tourists visit AJK and Gilgit-Baltistan. While reliable statistics on Pakistan are hard to come by, one paper released by the Gilgit-Baltistan Tourism Department, total tourists in 2015 were 0.2 million up from just 34,000 in 2007. The figures for AJK are equally dismal and even a Wikipedia article admits that the “local tourism industry has potential although is underdeveloped.”

Writing in the Pakistani newspaper Daily Times a couple of years ago, Massod Ahmed explained: “The state of Azad Jammu and Kashmir (AJK) lacks economic development, and one of the fundamental reasons, in my view, is that it does not have a sufficiently big city that can attract people with money and ideas to come and invest.”

The capital of AJK, Muzaffarabad, is a cramped, poorly constructed city, according to Ahmed. “The valley of Muzaffarabad is so small that in no case, it can be turned into a big city…In Muzaffarabad, now vacant space is almost extinct. Apart from the poor construction resulting in thousands of deaths in Muzaffarabad in the 2005 earthquake, one reason was that it was practically impossible for people to flee to safer places due to the absence of space in the city.”

Mirpur, the other major city in AJK is in equally pathetic condition and depends almost entirely on the remittances sent in by Mirpuris settled in the UK. In fact, all of the province is heavily dependent on foreign cash inflows. Today, the only way to prosper is to seek employment outside the country and people from AJK routinely travel to the Middle east to seek employment.

One article written ten years in the Pakistani newspaper Express Tribune painted a grim picture of Mirpur: where begging and prostitution have become the most lucrative professions. Mirpur is a favourite city of professional beggars because residents are well-off, and visiting expatriates have money to spare, the article states, adding “Some woman beggars are also involved in prostitution. ‘I've often seen affluent young men driving away with a female beggar in their cars and then dropping them here...”

The per capita income and provincial GDP estimates of Azad Kashmir are depressed when compared with development in other regions of Pakistan although Azad Kashmir notably has a literacy rate that is substantially above the national average. Yet, the government of Pakistan continues to present an erroneous picture of economic conditions in the areas of the state held in its control.

The government of Pakistan routinely fudges statistics and has always shown exaggerated figures for Azad Jammu & Kashmir's moribund economy. Last year, the AJK administration claimed that the per capita GDP of the province was estimated at USD 1512 with a GDP of USD 6.5 billion. These figures are highly suspect because it is well known that per capita GDP figures of AJK and Gilgit-Baltistan have consistently been lower than that of Pakistan as a whole. In 2021, the World Bank estimated Pakistan's per capita GDP to be USD 1507, which works out to be marginally lower than that of AJK!

The general consensus is that AJK and Gilgit-Baltistan are both economically and politically backward, and continue to remain so. A research paper published a few years ago stated: “Pakistan has shown upward trends of growth and development in many aspects, in various regions. However, the residents of Azad Jammu and Kashmir (AJ and K) are still facing the lack of availability of basic health facilities, quality education, proper housing structure and employment opportunities etc. About forty percent of the population was living below poverty line during 2004.” The situation has only marginally improved since then.

The undeniable fact is that India as compared to Pakistan has been growing faster in every way in recent times has implications for every region in these two countries. With depressed growth due to the spending on military and terrorist operations in India and elsewhere, all regions of Pakistan including Pakistan occupied areas of Jammu & Kashmir are feeling the pinch.

According to an article in the, “As of 2020, With $2,709 bn, India's GDP is around ten times higher than Pakistan's GDP of $263 bn. In nominal terms, the gap is wider (above ten times) than PPP terms (8.3 times). India is the 5th largest economy in the world in nominal method and 3rd largest economy in PPP method. The nominal ranking of Pakistan is 48, and the PPP ranking is 24. India's economically largest state, Maharashtra, has GDP ($398 billion) much greater than Pakistan. Even the second largest economy Tamil Nadu ($247 bn), is very close.”

Last year (2021) India's GDP per capita at constant 2015 prices was USD 1,961 while that of Pakistan was USD 1,507. Thus, even in per capita terms Pakistan has a whole has fallen behind and needless to add AJK and Gilgit-Baltistan cannot be further behind.

While growth in all of Pakistan, AJK and Gilgit-Baltistan have been slowing in recent years, the economy of J&K has witnesses continued growth. In 2021, GDP for Jammu & Kashmir was 19.7 million INR, lakhs. GDP of Jammu & Kashmir increased from 8.71 million INR lakhs in 2012 to 19.7 million INR, lakhs in 2021 growing at an average annual rate of 9.58% (World Bank).

Population growth however is a problem in Jammu &Kashmir which has seen skyrocketing birth rates since the beginning of the militancy period. J&K's population has almost doubled from 7.84 million in 1991 (estimate) to 14.99 million (estimate) in 2022. The population in J&K has and continues to grow faster than the rest of India. This means there are fewer resources to share and overall effects of increased prosperity are reduced.

The present government is however extremely upbeat about the future of J&K's economy. It believes that the economic potential of this region is very high and is not only developing its infrastructure at a fast pace but is also committed to promote J&K's traditional handicrafts, horticulture, tourism and other sectors.

With the end of Jammu & Kashmir's special status and restrictive laws, the region is only going to get more integrated with the rest of the country. Increased connectivity especially in the form of a direct railway line between the Kashmir Valley and the rest of India will further facilitate integration. This can only translate into better times. But there is one essential condition for continued growth and prosperity: peace. That needs to be preserved and only the people of Jammu & Kashmir can ensure that.

[The author is a retired teacher based in Luton, UK]