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Old Monday, February 09, 2009
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Default Energy Cooperation is a Key to Economic Development in SAARC Region

“Energy Cooperation is a Key to Economic Development in SAARC Region.”


As the human brain evolved into a complex computer always working out for finding ways to improve his living condition, so people started to trade off things like petrol for food etc and with this man actually got control of the energy which others possessed. The Europeans who kept skirmishing with each other for centuries but after World War 2, they started making mutual cooperation organizations which helped them to grow a lot. European Union is first economic community after this war established in 1951 to improve the life of Europeans. The south Asian region which is full of natural resources but because of the nonexistence of a true mutual cooperation, they are still struggling with basic human issues like hunger, poverty and other social and economic vices and have not been able to boost up their life standards. The countries in south Asian region have recently started to worry about securing enough energy to fuel their economies. These suspicions are the result of a combination of the recent oil prices spikes, increasing energy nationalism in the supplier states and under-investment in the upstream energy sector and expected strong worldwide growth of energy demand, which is likely to have a tight energy market as a result. Therefore South Asian countries have started to adapt their national energy strategies to the changing environment and are paying more attention to achieving energy supply security. The acceleration of economic growth is a Charter objective of SAARC. The South Asian Association for Regional Cooperation (SAARC) is an economic and political organization of eight countries in Southern Asia. In terms of population, its sphere of influence is the largest of any regional organization: almost 1.5 billion people, the combined population of its member states. It was established on December 8, 1985 by India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan. In April 2007, at the Association's 14th summit, Afghanistan became its eighth member These countries together possess vast stores of energy mostly in the form of water resources, oil, forest, coal and gas. However, these countries continue to be characterized by poor quality of energy infrastructure, skewed distribution and unattainable and expensive energy availability. These countries have remained largely energy importers and gradually more faced a serious energy shortfall. This is likely to deepen further both because of ongoing economic liberalization-led activities and rise in income level-led steady switching over of the rural and urban families from bio-fuels to more efficient and convenient modern fuels. The inability to accommodate to the increasing industrial and other commercial energy needs has adversely affected their productive activities, social development and investment climate. This is exacerbated by structural, institutional and financial problems. . A large portion of the population lacks access to modern sources of energy and depends on traditional sources that are not only inefficient but also have severe health and environmental problems associated with them. Increasing oil import dependency and huge investment needs for energy market development pose a further challenge. Energy Cooperation is a Key to Economic Development in SAARC Region. At the same time there has been realization that availability and accessibility to energy can transform the quality of life and work substantially, help raise health and educational standards and retard rural-urban migration by enhancing the level and swiftness of income and employment generation.

There are clear options emerging. The cross border power trading is one of them with Bhutanese success story spreading to Nepal, Bangladesh and even Pakistan. This is further corroborated by the strong seasonality factor in both generation and demand that is noticeable in the South Asian countries. The creation of a South Asian energy market and cooperative development of the available miscellaneous energy sources in the region can help increase the level of energy security in the region and thus can subsequently contribute to achieving a sustained higher economic growth. This could lead to a South Asian regional power and gas market and competition among power and gas producers both public and private that ensure economic and efficient delivery of services to the consumers in the region. Dr kemal is a senior economist and director of Pakistan Institute of Development Economics (PIDE) based in Islamabad says: “energy cooperation helps in improving welfare by allowing higher levels of consumption and investment than otherwise possible. In a labour surplus country like Pakistan it also helps in generating higher employment and higher wage rates with positive implications for income distribution and poverty”. Energy sharing and energy cooperation could dramatically improve the regional supply-demand scenario for the individual countries of South Asia .Energy cooperation helps as the building blocks for more energetic regional trade and sustainable economic development.

In NEW DEHLI Minister for Petroleum and Natural Resources Amanullah Khan Jadoon on Wednesday said that” Pakistan strongly advocates energy cooperation in South Asia for the economic development of the region”. He was speaking at the second meeting of SAARC energy ministers, which concluded after adopting the report prepared by the officials of the SAARC member states. The minister said that “high economic growth demanded high-energy inputs. There is big challenge ahead of us. We are keen to exploit all opportunities of regional and international cooperation to meet our increasing energy deficit. Cooperation within the SAARC region figures at the top of our regional energy cooperation”. (Daily Times: 08 March 2007)

Also the Indian Union Minister for Power Sushi Kumar Shined said “the vision of the SAARC charter of promoting the welfare of the people of South Asia would be fulfilled only if SAARC countries were able to give access to commercial energy to their people.”(Second SAARC meeting: 07 March 2008)

So, the energy cooperation in SAARC region presents marvelous potential for the development of regional resources in an integrated manner by exploiting the complementarities and optimal utilization of available resources. Much will depend on how SAARC benefits from its proximity with south western and central Asia to meet its gas and oil needs. But the real issues are of political economy, both at inter and intra- regional levels, further liberalization and deregulation of an inefficient energy sector, attracting foreign investment and developing an integrated infrastructure of production, transmission and gas pipelines at a regional scale. So, the energy cooperation is key to development in SAARC region.
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Last edited by Princess Royal; Monday, June 29, 2009 at 08:02 PM.
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