CSS Current Affairs | Implication of Energy Crisis for Pakistan
The following question of CSS Current Affairs is solved by Hamza Aslam under the supervision of Howfiv’s Pakistan Affairs and Current Affairs Coaches. She learnt how to attempt 20 marks question and essay writing from Sir Syed Kazim Ali, Pakistan’s best CSS and PMS English essay and precis teacher with the highest success rate of his students. This solved past paper question is attempted on the pattern taught by Sir to his students, scoring the highest marks in compulsory and optional subjects for years, and uploaded to help aspirants understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
Outline
1- Introduction
2- Current situation of Pakistan’s energy crisis
3- What are the long-term implications of the energy crisis for Pakistan’s developmental goals
3.1- Economic Implications
- ✓ Significant decline in Industrial growth
- ✓ Increasing fuel imports lead to devaluation of rupee
3.2- Political Implications
- ✓ Tussles between provinces due to unequal distribution of electricity
- ✓ Political instability
3.3- Social Implications
- ✓ Rise in poverty and unemployment
- ✓ Losses to tourism Industry
4- Solutions
- ✓ Revival of the agreed project would increase industrial growth
- ✓ gradation of outdated transmission infrastructure
- ✓ Formulation of sustainable energy policies
5- Conclusion
Answer to the Question
1-Introduction
The energy crisis is one of the most critical factors hindering the development of a country’s social, political, and economic sectors. Unfortunately, Pakistan is counted among the countries facing severe energy crises. There are various factors that are responsible for the energy crises, including outdated infrastructure, political instability, and short-term energy policies. However, if the increasing energy crisis cannot be controlled, then serious implications will be faced by the country in the near future. It would lead to a decline in the industrial growth rate, an increase in import bills, poverty and unemployment, tussles between the provinces, political instability, and a great hit on the tourism industry. As there is a will, there is a way; effective planning and efficient policies by policymakers can handle this menace. The revival of projects, such as CASA-1000, TAPI, and the Iran gas pipeline, by using decisive strategies, would significantly help the country manage the energy crisis. Additionally, upgrading outdated transmission systems to prevent line losses and run the plants at optimum levels can help the country achieve energy sustainability goals. In a nutshell, if the energy crisis is not managed, it would shatter the country’s aspiration to achieve development goals, but effective and adequate measures would save the country from its destruction.
2-A critical overview of Pakistan’s energy crisis
Since its inception, Pakistan has been overly dependent on foreign countries to fulfil its energy needs. No doubt, the country has large oil and gas reserves, but the inefficient and inadequate procedures for their exploration have created an energy crisis in the country. Apart from that, various factors are responsible for the current energy crises, including outdated infrastructure, political instability, overreliance on IPPs, and short-term energy policies. According to National Electric Power Regulatory Authority’s (NEPRA) 2022 yearly report, Pakistan’s total installed power generation capacity is 43,775 MW, of which 59% of energy comes from thermal (fossil fuels), 25% from hydro, 7% from renewable (wind, solar and biomass), and 9% from nuclear. As compared with the energy generation capacity in the year 2022, Pakistan had a total demand of 28000MW and a supply of 20500 MW. Thus, the data shows that the country’s installed generation capacity is more than its demands, but outdated infrastructure and inefficient handling have made it difficult for the country to fulfil demands.
3-What are the long-term implications of the energy crisis for Pakistan’s developmental goals
3.1-Economic Implications
- ✓Significant decline in Industrial growth
The energy crisis greatly affected industrial growth by reducing the output of industries. Due to the energy crisis, foreign investor would pack up their businesses and move to neighboring countries where they found feasible environments for economic activities. As the energy crisis continues, foreign direct investment (FDI) has been continuously declining every year. According to the State Bank of Pakistan statement, the FDI inflows declined 25pc in the fiscal year 2023 as compared to 2022. Therefore, continuous interruption in energy supply would affect the productivity of industrial units and even the closure of a few working units, which ultimately lead the country toward de-industrialization.
- ✓ Increasing fuel imports lead to devaluation of rupee
To fulfil energy needs, the country spends most of its foreign reserves on importing oil products, which lead to the devaluation of the currency. According to Pakistan Finance division report 2022, Pakistan spent 66% of its foreign exchange reserves on importing fuel products. The major reason behind large energy imports is the country’s significant dependence on LPG, oil, and coal-based power plants for electricity generation. Therefore, dependence on foreign fuel to fulfil energy needs is greatly affecting the country’s currency.
3.2-Political Implications
- ✓ Tussles between provinces due to unequal distribution of electricity
An energy crisis would increase the tussles between provinces due to unequal sharing of energy resources among the provinces. A senior official of Sui Northern Gas Pipe Line (SNGPL) records that “Half of the total volume of the gas being produced in KP is being stolen by the people of the areas close to gas fields. They have their networks to steal gas, claiming it a matter of their right as the gas is being extracted from their areas.” Moreover, the country’s energy power plants are located in the southern region of the country, especially the coal-based power plants, which the southern side provinces demand a larger proportion of energy than the other provinces, which leads to increasing resentment among the provinces. Thus, the inadequate distribution of resources becomes a challenge to the nation’s integrity of the country.
- ✓Political instability
Exacerbated energy crisis would lead to increasing political instability in the country. The blame game among the political parties and institutions because of energy shortage would fuel political instability. Energy shortage would produce frustration among the people. To release this frustration, people came on the roads, and as a result, demonstrations and protests started throughout the whole country. For instance, recently, people all across the country started protests and burned the electricity bills due to increasing electricity prices as per the IMF conditions. Thus, an energy crisis would create problems for the political institutions that govern the country.
3.3-Social Implications
- ✓ Rise in poverty and unemployment
The energy crisis would lead to increasing poverty and unemployment due to decreasing industrialization in the country. As a result of the decline in industrial productivity, the country’s imports of products would be raised, which ultimately leads to a significant increase in the inflation rate. Moreover, the industrial sector has accommodated a significant labour force. Closing of industries would increase unemployment in the country. According to the labour force survey 2020-21, 14.9% of the country’s labour force is employed in the manufacturing sector and 9.5 % in the construction sector. Therefore, increasing the inflation rate and decline in industrial growth due to the energy crisis would increase unemployment and poverty in the country.
- ✓ Losses to tourism Industry
Tourism in the country can be greatly affected due to energy crises. Due to high transportation fees and hotel charges, people would be discouraged from visiting tourist places in the country. Apart from that, all the tourism businesses, such as restaurants, parks, transportation and other recreational sites, require energy to attract tourists. Therefore, the energy crisis hinders the tapping potential of the tourism industry and affects the livelihood of people who are associated with this business.
4-Solutions
- ✓ Revival of the agreed project would increase industrial growth
In the last few years, the country has signed a few energy projects with Turkmenistan, Tajikistan, and Iran to manage the energy crisis. Unfortunately, these projects, TAPI, CASA-1000, and the Iran-Pakistan gas pipeline, are victims of delay due to various internal and external issues. Completion of these projects carries the potential to lead the country towards energy security. Because of energy security, the country’s industrial sector would flourish, which would lead the country toward economic sustainability. Therefore, serious and sagacious efforts for the revival of these projects can lead the country towards prosperity.
- ✓ gradation of outdated transmission infrastructure
As the country has more generation capacity than its consumption, an upgrade of installed infrastructure can prevent the country from an energy crisis. Optimum utilization of power plants and decreasing line losses can increase the supply capacity and meet the country’s demand for electricity. In this regard, along with investing in new projects, the country should increase its investment in upgrading outdated transmission systems. Moreover, new technologies for preventing line losses and getting maximum output from electricity generation plants can be used to manage the country’s energy crisis. So, the efficient transmission system would aid in meeting the country’s demand for electricity.
- ✓ Efficient and effective energy policies
An integrated, comprehensive, and long-term objective-achieving policy can bring the country out of the energy crisis. Fortunately, the country has quite enough indigenous resources to meet the energy needs, but the potential of these resources can only be harnessed by formulating efficient policies for their exploitation. Moreover, Pakistan has confirmed oil, gas, and coal reserves, but the only thing that is required is a dire need for their exploration. By focusing on getting the maximum potential from renewable energy resources, especially wind, solar, and hydel, the country can fulfil its energy needs without reliance on others.
5-Conclusion
In a nutshell, various factors, including poor transmission infrastructure, ineffective and inefficient energy policies, and political instability, are responsible for the continuously aggravating energy crises in the country. If these factors are not addressed, the country may face serious implications in its social, political, and economic sectors. It would lead to a decline in industrial growth, increased poverty and unemployment, and air tussles between provinces. However, the upgradation of outdated transmission systems, the revival of signed projects, and sustainable energy policies can prevent the country from an energy crisis.
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