Economy and Business

Pakistan's economy being hurt by lack of power

Senior Brookings Institution fellow Charles Ebinger has said that Pakistan’s poor pricing and lack of incentive for gas development had led to problems in its gas sector, and that Pakistan’s economy was suffering from the lack of power.

Nov 3, 2011

- Huma Imtiaz

Ebinger, who was launching his book ‘Energy and Security in South Asia: Cooperation or Conflict’ book covers the energy situation and problems each country faces in South Asia.

He recapped developments in Pakistan’s energy sector, highlighting how Pakistan tapped into utilising gas reserves after the discovery of the Sui gas fields. However, “poor pricing and lack of incentive” had led to problems in even the usually reliable gas sector. He added that Pakistan was one of the first countries to switch its automobile fleet from petrol to using compressed natural gas (CNG), and has the largest users of CNG-fuelled cars. Despite this, Pakistan’s economy, said Ebinger, had suffered immensely due to the lack of power.

The Thar coal reserves, the subject of many a scheme and promise by the Pakistani government, was also highlighted by the author in his opening remarks. Ebinger added that it was tragic that these reserves had not been developed.

Ebinger envisioned a future in which Pakistan would develop these coal reserves and export power to India, which, in return, could build, for example, renewable energy plants.Speaking about India’s coal reserves, the author said that the problems there pertained to the lack of infrastructure in the coal sector.

Other panellists at the event included eminent South Asia scholar Stephen Cohen, Martin Indyk and Ron Somers, President of the US-India Business Council.Much of the debate remained focused on India and Pakistan, especially in problems in both countries facing energy shortages, and the need to invest in energy to sustain growth. On India, Somers highlighted how it required 147 clearances for a power project, not including the State and Centre approvals.

The debate on the proposed gas pipeline projects in the region also provided for some interesting insights. Regarding the Turkmenistan-Afghanistan-Pakistan-Inida pipeline (TAPI), Ebinger added that if India did not step up and resolve their differences on the project, China had already expressed willingness to stand in.

With respect to reservations of the United States’ over the Iran-Pakistan-India pipeline, Stephen Cohen termed it as baffling, “the US is hurting its partners and friends in the region,” while talking about the US’ political reasons for opposing the project. Ebinger again added that China was more than willing to step into the IPI project if India backed out, due to its fears of having Pakistan holding its gas supply hostage.

In response to a question, Ebinger proposed renewable energy resources not connected to grids that would offer tremendous opportunities. He also added that energy efficiency was sorely required. Citing an example from a recent trip to Islamabad, Ebinger recalled how box-AC spots were cut into walls before the invariably smaller air-conditioning units were fit in the spaces, leading to leaks.

Ebineger also added that the US government and World Bank should stop doing institutional policy development, which he termed a waste of millions of dollars, and have rarely been implemented across the board.

Stephen Cohen, a Senior Fellow at the think tank and author of The Idea of Pakistan, said that Pakistan has done a form of alchemy – wherein, and “this is led by the Pakistan Army”, has transformed Kashmir’s issue into water. Cohen added that the military has attached a lot of emotion with the water resources, and was suspicious of India’s intentions.

Talking to The Express Tribune after the session, Ebinger said that on the KESC’s dismal performance, it was a lack of political will and municipal and state initiative. He also added that due to the sectarian violence in Karachi, KESC has difficulties in sending repairmen of a certain ethnicity or sect to fix power lines during the monsoon season.

( The Express Tribune)

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