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Energy crisis is a constraint to Pakistan's economic growth
Outline:
1. Introduction
2. Definition of Energy Crisis
3. Brief History of the origin of Energy Crisis in Pakistan
4. Affects of Energy crises on economic growth of Pakistan
a) Significant decrease in Manufacturing
b) Increase in import-export deficit
c) Industries are being shut-down because of energy crisis
d) Case-study of Textile industry and energy affects on it
5. Energy crisis affect on our agricultural sector
a) Scarcity of water because of load-shedding and its affects on crop yielding
b) Gas load-shedding and its affect on fertilizers industry
c) Low-crop yield because of unavailability of agricultural apparatus
6. Affects of Energy crises on Transportation
a) Unavailability of Gas – poor man`s fuel
b) Hikes in fare of transportation
7. Affects of energy crisis at-large
a) Unemployment and Inflation
b) Decrease in FDI
c) Large chunk of foreign exchange being spent on subsidies and circular-debt
8. How to cope with the energy crises and boost our economy
a) Short-term solution
b) Long-term solution
9. Epilogue


Energy is like an oxygen to modern economies and any deficit in it has an adverse affect on a developing country. Pakistan, being developing country, needs uninterrupted energy supply to progress at a good pace. Unfortunately, over the past few year, energy crisis has crippled the economy of Pakistan. Pakistan is facing short-fall of 4000MW to 5000WM in electricity, while situation of gas and oil is no different. Resultently, Pakistan GDP is well behind other south-asian countries. According to Pakistan Economic Survey 2014-2015, Pakistan is loosing 2% of GDP because of this crises. This situation is deteriorating after every passing day and economic growth has been halted.

Energy crisis can be defined: Increase in demand of energy - electricity, gas, oil - and decrease in supply.

Energy crisis started in 2007 and has been prevailing in worse form even today. Back in 2004-2005, Pakistan had surplus energy and GDP grew at a whooping rate of 7%. But as the economy of Pakistan grew, its energy demand also increased. The Government was unable to comprehend this change and did not focused its energies on development of new energy resources. Resultantly, the situation got worse and we became well-acquainted with the term load-shedding.

Energy consumption and progress in economy are correlated. UN set a limit of 100KwH per capital consumption to experience medium level of human development. Pakistan`s per capital consumption is 480KwH, well below the limit set by UN. So the energy crisis has adversely affected the life of Pakistani people. Not a single institution is sparred by this crisis.Pakistan has lost over a trillion Rs because of the energy crisis between 2007-2014.

The world was revolutionized because of the development in industry. In present times, a developed economy highly relies on its industries for generation of foreign exchange. Unfortunately, Pakistani industries are on verge of destruction because of the energy crisis. Pakistan was ranked 26th, in terms of purchasing power. Our economy was ranked at 44th, in terms of GPI. Despite all these positive factors, we are not able to live up to the potential. Pakistan in among the eleven developing countries which are considered to have the potential to become largest economies of 21st century. But all these figures seem to be a far cry, looking at the present state of affair in the country.
Energy crisis has affected the production process of our industries. Our industries are not able to meet the deadlines of contracts because of interruption in power-supply. The production units remain shut. Those who use alternative resources, to power-up their production units, are not able to make profit as the cost on production increases. Because of the decrease in manufacturing our trade deficit is increasing.

Pakistan textile industry, which accounts for 64% of Pakistan imports, is the worse affected among other industries. The production of textile mills has been limited to only 40% of the total production capacity because of the prevalent energy crises. According to the data given by former commerce president Faislabad, as many as 800 unit of total 2000 unit have been closed. Many industrialists are transferring their business to other neighboring countries ; such as Bangladesh and Srilanka. The labor which used to work in these industries are unemployed. As many as 0.75million daily wage workers were unemployed in Lahore.

Pakistan is an agriculture country and most of its exports are related to this sector. More than fifty percent of the total population is directly related to agriculture. The boom in development of agriculture apparatus has increased their use in Pakistani agriculture as well. Nowadays, tube-wells are powerrd by electricity. Crops require water to grow and farmers use tube-well to water their crops. But the energy crisis has rendered these modern technological advancement useless, as there is not enough power to operate them. Farmers are left at the mercy of rain watar only. There has been a significant decrease in production of crops because of the heavy reliance on rain water.
In modern days, fertilizers have become indispensable for high-yield agriculture crops. Pakistan is facing worse crisis in gas supply along with other energy sources. Methane - an important component of gas- is used in the production of fertilizers. Unfortunately, the fertilizers plants are not provided with the gas, as there is severe gas scarcity in Pakistan. Our indigenous resources are depleting at a rapid pace. It is estimated that Pakistan`s local gas reserves will be exhausted till 2025. It is pertinent that the long-term interruption in gas-supply to fertilizers will have negatively affect on our agriculture sector. Pakistan, being an agriculture country, cannot afford to happen this lest it will face adverse economic problem in coming future.

Transportation was the most important component of industrial revolution in Europe. It heavily depends on energy. Energy crisis have affected transportation as well. Pakistan is facing worse gas-loadshedding.Ironically, Pakistan is the largest gas user in south-asia in terms of vehicle that run on gas. Gas is known as a poor man`s fuel and Pakistani transportation system rely heavily on this fuel. Unfortunately, there are is not enough resources to fuel the transportation - not with gas.

Although, energy crisis has hit our industry,agriculture and transport sectors hard but its affects are far greater than this. The energy crises has increased unemployment in Pakistan. Despite Government claims, unemployment has increased 13% in 2015. This sudden increase is because of the chronic issue - that is energy crisis. Unless Govenment sort this issue out, the rate of unemployment is going to increase. And if the youth of Pakistan, which constitutes roughly 50% of the total population, does not find employment they will indulge themselves in other activities. This could lead to more worsened law and order situation. This will ultimately affect our fragile economy.
Foreign direct investment is essential for a developing economy. Unfortunately, Pakistan economic indicators are not encouraging for foreign investors. Long break-down of electricity and unavailabilty of gas has sent bad impression to the world. Pakistan economy needs investments to grow but our energy crisis has kept these investment at bay. World investors are reluctant to invest because they are afraid that Government will not be able to provide them with the energy to run industries.

The transmission system of electricity is ages old. Line-losses in transmission is also a major cause of load-shedding. Moreover, Pakistan produces electricity from oil which is much more expensive than other sources. Because of above mentioned facts, Government fails to recover amount of money that it spends on production of electricity. It has to spend big chunk of foreign exchange in subsidies and circular-debt. That foreign exchange could be spent on infrastructure to boost economy.

Pakistan failed to achieve Millennium Development Goals set by UN. Energy crisis was among major cause of this failure. Now that Pakistan is looking towards new goals it needs to get rid of energy crisis. If Pakistan want to develop and compete at international arena, it will have to over-come this very problem. Because sustainable development can only be ensured when there is adequate power to supplement it. Like in case of industry, Pakistan has the potential to become a leader in textile and only textile imports could bring huge amount of money to Pakistan reserves. If Government succeeds to provide uninterrupted power-supply to industries, our economic growth will boost at a much-higher rate compared to other developing country.

Pakistan will have to adopt both, long-term and short-term, solutions for economical progress. In short-term solution, Pakistan needs to exempt all Industrial units of load-shedding so that they could manufacture products up to their capacity.

In long-term solution, Pakistan needs to divert its reliance on oil and must shift it to other cheaper resources. Pakistan has potential resources of gas (6billion cpd), oil (500billion bpd) and coal (107billion ton), these resources needs to be explored and utilized. Moreover, Pakistan has to build hydropwer generation plants because these are renewable and much cheaper as compared to oil and gas power generation plants. Pakistan`s geographic location makes it an ideal place for solar energy. It needs to utilize this advantage and must follow the foot steps of leading solar power generating countries; such as Germany, which produces about 1800MW from solar energy plants.
Pakistan is blessed with each and every resources that are required to progress in this modern world. Energy crisis has proved a big constraint in our economical progress, and if we overcome this issue we can live up to our potential. Government needs to focus all its energies on this issue. Almost all the problems are somehow related to the under-performance of our economy. So it is imperative for us to make sure that our economy does not drain because of energy crisis, as it has been for past few years. For this to happen, we need to work tirelessly and with a uniform vision - that is to make Pakistan greater and prosperous.

The entire Essay has been copied word to word from Pakistan Affairs book published by Kips Publications. Watch out for lawsuit.

I read you comment today as I totally forgot about this essay. Well, I wrote this essay back in 2015 and posted here. I have no idea if someone stole it from here. Whatever is the case, I am glad my research helped someone in someway.

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