In the past two decades, there has been a remarkable increase
in the demand for energy in South Asia, leading to a huge deficit in
power supply. A majority of the population in South Asian countries,
particularly in Pakistan, Afghanistan and India, is living without an
easy access to electricity.
Energy is the fuel for economic growth and an essential requirement
for social development. However, its persistent shortage has been a
major factor in restricting the growth of the region.
Economies of Pakistan and India have grown at the rate of 3.6%
(2012-13) and 5% (2012-13) respectively. Afghanistan’s economic growth
is expected to slow down sharply to 3.1% this year and 3.5% in 2014
compared to 14.4% in 2012 due to scheduled pullout of foreign forces and
squeezed foreign aid, revealed a World Bank report.
Many studies show that by addressing energy shortages, each of these countries could achieve a 3-4% higher growth rate.
By the middle of this century, energy demand would certainly more
than double as the world population grows rapidly and developing
countries expand their economies. All energy forecasts show that the
world will rely on coal, oil and gas for decades to come.
To meet the growing energy demand, linking energy suppliers in
Central Asia with consumers in South Asia can be the answer. Both the
regions can reap maximum dividends from energy trade, which can also
play a constructive role in future development of the regions.
A recent Inter-governmental Council (IGC) resolution signed by
Central Asian and South Asian states for CASA-1,000 power supply project
is the beginning of cooperation between the regions. The agreement,
signed by Kyrgyzstan and Tajikistan from Central Asia and Pakistan and
Afghanistan from South Asia, will lead to an investment of $1 billion in
a bid to ease power shortages in Pakistan and Afghanistan while
enhancing revenues for the exporting Central Asian states.
Pakistan, Afghanistan, Iran and India now have greater opportunity to
tackle energy shortages by cooperating with one another and pressing on
with projects like TAPI (Turkmenistan, Afghanistan, Pakistan and India)
and IP (Iran-Pakistan) gas pipelines.
However, difficult security situation in Afghanistan, international
sanctions on Iran and political standoff between Pakistan and India have
impeded the progress on regional energy trade moves.
Pakistan should remain committed to regional energy trade agreements
in order to deepen trade ties with the stakeholders. For that, Pakistan
is playing a significant role in the Afghan peace process. A peaceful,
stable and prosperous Afghanistan is in Pakistan’s vital national
interest.
Afghanistan serves as a link with the energy-rich Central Asian
region. Keeping in view its geostrategic importance, Afghanistan can
play a vital role as a transit corridor from Central Asia to major
energy consuming centres in South Asia.
Cooperation between Central and South Asia would pave the way for
peace and prosperity in both regions. Energy trade can lead to
resolution of conflicts between countries, which may also improve the
security situation by providing economic incentives to the populace.
However, investment is the key to building energy infrastructure and
institutional development which in turn leads to energy security, growth
and development. In this regard, private sector investment is also
crucial to take the projects to the next stage.
Both the regions should now frame strategies for meeting the needs of
energy-deficit countries by energy-surplus nations. Putting in place an
institutional framework by the public sector and its implementation is
an important first step.
|
