Publication - Working Paper
The citizens of Khyber Pakhtunkhwa (KP) have suffered a series of external shocks over an extended period of time that has eroded living standards. These include the fall-out from over three decades of the Afghan conflict, spill-over of the militancy in FATA, devastation caused by the 2005 earthquake, internal displacement of 3 million people following the conflict in Swat in 2009, and the damage inflicted by unprecedented floods in 2010. The fact that KP‘s political governance structure has consolidated, financial flows led by remittances have strengthened and the economy has grown at 4.5% per annum in this period, underscores the resilience of KP citizens and the social and economic structures that shape their lives.
Recent developments in domestic and regional politics suggest that KP is on the cusp of reclaiming prosperity and a promising future. The withdrawal of NATO troops and the political transition in Afghanistan present an opportunity for a fresh start for stabilizing Afghanistan. Dialogue with FATA militants has opened the door to a potentially constructive engagement in the border regions. These developments could open substantial regional trade and investment opportunities. Importantly, the elections of May 2013 have put in place a government with a strong mandate to build on the province’s economic and social foundation.
KP’s economic growth strategy, summarised here, is a key instrument for fulfilling the elected government’s mandate to improve citizens’ living standards and creating opportunities for a promising future.