VIEW: Lighting up Pakistan —Robert M Hathaway
President Pervez Musharraf recently claimed that construction would soon begin in Karachi on one of the tallest buildings in the world. The project, according to the president, would show the world that Pakistan is a “progressive and dynamic country and we are second to none”. But unless Pakistan can light that building, Musharraf’s claims will look silly.
[/color]Robust economic growth-rates over the past several years have encouraged Pakistan to ignore fundamental weaknesses in the economy. Yes, Pakistan’s economy is growing; that’s the good news. The bad news is that with this growth comes higher energy consumption and greater pressure on the country’s energy resources. Unless Pakistanis — the government, but individual citizens as well — act now, the country’s future will indeed be dark, in more ways than one.
At present, demand for energy exceeds supply. Power outages and planned power cuts (euphemistically termed “load-shedding”) are, for many, an everyday occurrence. In addition to their economic costs, energy shortages foster political instability. Last summer angry public protests in Karachi and riots in Liaquatabad demonstrated how close many Pakistanis are to reaching the limits of their patience. A widespread power outage affecting much of the country last September triggered panicky rumours of a coup. Earlier this year, the opposition and the ruling parties staged nearly simultaneous protest walkouts from the Senate following a disagreement over high domestic oil prices. This unrest may be only a foretaste of things to come. Absent drastic action, Pakistan’s energy situation is expected to get far worse in the years ahead.
According to the government’s own figures, by 2015, eight short years from now, energy demand in Pakistan will be nearly 22 percent greater than projected supply. By 2030, this energy shortfall will be 64 percent. What do these figures mean for Pakistanis? Higher prices, fewer jobs in a slowed economy, reduced opportunities, less comfort, heightened political turmoil.
A Pakistan with serious energy shortages will not be a pleasant Pakistan.
Today, oil and natural gas supply nearly 80 percent of Pakistan’s energy needs. However, the consumption of those energy sources vastly exceeds the indigenous supply. For instance, Pakistan currently produces less than 20 percent of the oil it consumes. This fosters a dependency on imported oil that places considerable strain on the country’s finances. While the present situation with respect to natural gas production is not nearly as critical, Pakistan’s projected natural gas needs are expected almost to double (from 2004 levels) by 2010.
On the other hand, hydropower and coal are perhaps under-utilised today, as Pakistan has ample potential supplies of both, at a time when these resources provide for relatively little of Pakistan’s energy needs. Pakistan’s proven coal reserves are the world’s sixth largest, and the government intends to increase the share of coal in the overall energy mix from 7 to 18 percent by 2018 — a course that may make sense from an energy standpoint, but which carries troubling environmental implications.
Meanwhile, provincial rivalries and widespread public opposition have significantly slowed the government’s plans to build dams capable of generating electricity. Many Pakistanis argue that large hydroelectric projects should be a last resort, after low-cost energy conservation measures have been fully utilised.
Nuclear power at this point accounts for barely one percent of Pakistan’s energy consumption. The government has announced plans to develop a generating capability of 8,800 megawatts (MW) of nuclear energy by 2020, compared to the country’s current output of less than 450 MW. But this goal is unlikely to be reached unless Islamabad is able to persuade the United States and other western countries to help it develop civilian nuclear technology, an idea certain to meet with resistance in the West.
Pakistan’s renewable energy potential — hydro, wind, and solar — is substantial, although presently this potential remains largely untapped. Escalating petroleum prices in recent years have given Pakistan an additional incentive to invest in renewable energy technologies. In 2003, the government ambitiously declared that by 2015, 10 percent of the country’s total energy supply would come from renewable energy sources, and established the Alternative Energy Development Board to coordinate renewable energy promotion. Modest steps in the direction of greater reliance on renewable energy have already been taken.
Nonetheless, renewable energy labours under severe handicaps in competing with conventional energy — hidden subsidies that allow for lower conventional energy generation costs, for example, and policies that permit conventional energy to disregard the costs of the pollution it creates when pricing power. Unless renewable energy is given a level playing field, a major expansion of renewable energy generation is unlikely, and the government’s goal of 10 percent by 2015 will not be met.
Rural areas across India, Bangladesh, Sri Lanka, and Nepal have all implemented successful clean and renewable energy initiatives. Bangladesh, for instance, has experienced considerable success with solar home systems financed through micro-financing. Pakistan’s neighbours have something to teach Pakistan, if only it will listen.
Pakistan’s minister for petroleum and natural resources has identified energy as the
most important input for the country’s economic development. The uninterrupted supply of energy to fuel the nation’s economy, he has declared, should be the highest priority for the country’s economic managers.
Yet the record of past governments does not induce confidence. Shahid Javed Burki, one of Pakistan’s most distinguished economic analysts, has written of “a colossal failure of public policy” over six decades, which has left the country with “weak institutions, inappropriate pricing policies and insufficient public-sector investment that [has] contributed to what appears to be an inexorable march towards another crisis”. Pakistan cannot afford a repetition of this sorry history.
The good news is that Pakistanis are not being asked to find a cure for cancer, or to discover entirely new methods or technologies in order to meet their energy needs down the road. There already exists widespread agreement on at least the broad outlines of an energy strategy for Pakistan. Pakistan’s energy managers know what needs to be done.
But solemn promises and soaring rhetoric will not do the job. Preparing for Pakistan’s energy needs over the next quarter century will require long-term vision, a national commitment widely shared among the country’s political and business leaders, inspired leadership sustained from one government to the next, and most of all, political will to make and carry out difficult choices.
Pakistan — the country, not just the government of the day — needs to decide that muddling through is not enough. Pakistan, as a country, has to get serious about creating an energy strategy, and then — and this is the hard part — about implementing it.
Pakistan will not find itself alone in this task. Islamabad’s friends around the world believe that it is in their own national interests for Pakistan to succeed — which means, among other things, that Pakistan succeed in its quest for energy security. At the end of the day, Pakistanis themselves must solve the problem of energy insecurity, but the outside world — both the private and the public sectors — can and will help.
Energy matters for Pakistan. If Pakistan is to succeed in its ambitious plans for economic development, if it is to raise the grossly inadequate living standards of its people, if it is to achieve the economic growth necessary to ensure political stability, if it is to begin to address the many environmental problems that up to now have been largely ignored, and which have a hugely adverse impact on the daily lives of Pakistani citizens, if it is to live in peace with its neighbours, several of whom are directly impacted by Pakistani decision-making in the energy sector, if Pakistan is to move towards all these goals, Pakistanis must get serious about energy.
Robert M Hathaway, director of the Asia Programme at the Woodrow Wilson International Centre for Scholars in Washington, is co-editor of Fuelling the Future: Meeting Pakistan’s Energy Needs in the 21st Century. A limited number of these books may be had without charge by writing asia@wilsoncenter.org
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I think this is great article about the problem Pakistan is facing in terms of energy. The situation is bad enough but imagine in next few years if gov don't do anything.