Energy shortage threatens Pakistan
U.S. aid fails to stall growing crisis
ISLAMABAD — In the militant-infested northwestern Pakistan city of Peshawar, hundreds of businessmen recently marched in a mock funeral procession — but not to protest bombings or kidnappings. The “corpse” they carried was an electric meter.
In other areas of the country, shopkeepers have threatened mass suicide to protest 18 to 20 hours of power blackouts every day. Mobs are descending on utility offices to destroy records and meters, and have attacked political parties’ headquarters in riots that sometimes turn deadly.
This month Pakistan tumbled into sovereign default for the first time in its history because the government failed to reimburse millions to independent power providers — more proof that, after years of mismanagement and neglect, the nation’s energy sector is in dire straits.
Now some experts suggest that the power crisis is more of a threat to Pakistan’s stability than is terrorism — a bitter outcome given the amount of aid the United States has poured into energy projects here over the decades.
A long-running Islamist insurgency has carved 2 percent from the nation’s GDP, said Sakib Sherani, a former government economic adviser, whereas rotating daily blackouts — referred to here as “load shedding” — have resulted in a 4 percent loss.
The shutdowns paralyze commerce, stoke inflation and unemployment, and further enrage an already-restive populace. Load shedding averages five hours to 10 hours a day in some urban areas and more than double that in rural ones.
Shopkeepers and factories use backup generators if they have them, but businessmen say the rising cost of fuel to run generators robs from the bottom line.
“We have been shattered by these problems, and the government is responsible,” said Muhammad Naeem, sitting in the darkened office of the marble and granite company he runs in Islamabad. Persistent power failures have forced him to cut shifts by half and reduce his payroll from 35 people to eight as production has fallen off, he said.
Pakistani officials, while pointing fingers at previous governments for neglecting a predictable crisis, say coal, nuclear and hydropower projects are in the works, along with electrical grid and dam repairs to boost capacity. But relief is years away.
“The government knows the suffering of people. It is trying its best to resolve the electricity shortage problems,” said Zargham Eshaq Khan, spokesman for the Ministry of Water and Power. “The results will be evident in time.”
Many power-improvement efforts are backed by the U.S. Agency for International Development, which says it has made energy its priority in Pakistan. With $865 million in overall assistance this year, Pakistan is on the receiving end of the agency’s secondlargest program in the world, according to State Department officials. The share of aid devoted to energy this year is $112 million.
Yet for all its efforts, the aid agency has earned scant credit among the Pakistani public, polls have shown. And reliance on non-pakistani contractors and high administrative costs has fueled resentment, according to a recent Congressional Research Service report on aid to Pakistan.
Some Pakistanis are critical of a United States approach that for years spread money around too thinly, instead of focusing on more visible, large-scale public works projects. “The U.S. authorities’ main problem is that they don’t support tangible projects,” said Arshad Abbasi, an analyst on water and energy issues.
U.S. officials say they have struck a good balance in funding, and the Agency for International Development has decided to focus on fewer projects without cutting total dollars.
But Congress seems hardly in the mood to keep shipping money to Islamabad, which has blocked NATO supply convoys from its territory for the past six months. Lawmakers have bridled at the Obama administration’s request for $2.4 billion for Pakistan for 2013.
“Pakistan is like a black hole for American aid,” Rep. Gary Ackerman, D-N.Y., said during a House Foreign Affairs subcommittee hearing this month. “Our tax dollars go in. Our diplomats go in, sometimes. Our aid professionals go in, sometimes. Our hopes go in. Our prayers go in. Nothing good ever comes out.”
During the past decade, he said: “We have sunk $24 billion in foreign assistance into Pakistan. It’s hard to fathom how so much money can buy so little.”
The help on energy goes back much further. In the 1960s and ’70s, a consortium of U.S. construction firms, backed with Agency for International Development funds, built two huge earthen dams, considered at the time to be marvels of engineering, to harness the hydroelectric might of the Indus basin waters that emanate from the Himalayas.
The dams accounted for 70 percent of the country’s power output at the time, and still produce electricity, but Pakistan failed to maintain them.