PAKISTAN-US RELATION AFTER 9/11 (2001)

Introduction
On September 11, 2001, 19 members of a terrorist group called al-Qaeda hijacked four U.S. airplanes and
used them to strike various targets on the East Coast. The attacks made a great loss to America. Those
attacks killed 2,996 people, injured over 6,000 and financially it caused a damage of $10 billion in
property damage. Four of the US planes were hijacked by 19 al-Qaeda terrorists. Two planes were
crashed directly into the world trade center in New York City. Within an hour and 42 minutes, both the
large buildings collapsed, that caused a fire and it caused damage. Third plane was crashed into the
headquarters of the United States department of defense which caused the death of 343 people and the
fourth plane, was crashed into the field and caused a death of 72 people.
Pakistan and 9/11 attacks:
After the 9/11 attacks, President George bush launched a “war on terror” against Taliban and for invading
into the Afghanistan. America made clear to Pakistan that should support this war otherwise America will
made Pakistan back into the Stone Age. Gen. Musharraf was the leader that time and he decided to
support America because American blackmailed him on the call when he was in plane and he decided to
be with America in Plane.

PAKISTAN-US Relation (2001-2017)

2001:
After the 9/11 attacks, US decided to invade in various countries to end militancy. Pakistan was one of
those countries.. Parvaiz Musharaf was the leader of Pakistan at that time and he took that threat serious
and he decided to fight against ALQAIDA. After that, Pakistan arrested several senior Al Qaeda members
including Khalid Sheikh Mohammad, the alleged mastermind of the 2001 attacks. Pakistan also arrested
500 Al Qaeda members and handed them over to USA. Pakistan allowed American army to use its
military bases for launching attacks on Afghan soil. Pakistan relation with USA was beased in threat in
2001.

2002-2003: America said that Pakistan is major non NATO ally and Pakistan received a large amount of
aid of $25 billion. In 2003, US also forgave $1 billion worth of loan it had granted to Pakistan in a
goodwill gesture and appreciation for Pakistan’s cooperation. Pakistan cooperation was really worthy and
relations were going on peaceful level.
2004:
President George Bush officially declared Pakistan as a non-Nato ally granting it the authority to
purchase strategic and advanced military equipments. Since 2004, US army has launched various drone
strikes on the north-western side of the country. The drone strikes aim to target Pakistani Taliban and
supporters of al Qaeda, however, the strikes have also resulted in large civilian deaths and caused much
opposition from Pakistanis. The drown attacks in Pakistan has caused much loss in Pakistan. Large
number of families lost their loved ones just because of those attacks of US. In 2004, the founder of
Pakistan nuclear power, A.Q Khan confesses to supplying nuclear-weapons technology to Iran, Libya,
and North Korea. The United States presses for Khans arrest. But having just designated Pakistan as a
―major non-NATO ally, the United States settles for a form of home confinement for the scientist, who
is a national hero in Pakistan.
2005: In 2005, Pakistan was going through serious crisis because of the massive earthquake that
happened on October 8. At that time, US decided to help Pakistan. US announced $510 million
commitment for earthquake relief and reconstruction.
2006: President George W. Bush visited Pakistan in March 2006. He and President Pervez Musharraf
reaffirm their shared commitment to continuing their cooperation on a number of issues including the war
on terror, security in the region, strengthening democratic institutions, trade and investment, education,
and earthquake relief and reconstruction. President Musharraf visits the United States in September 2006.
He holds a bilateral meeting with President Bush. The United States concludes the sale of F-16 aircraft to
Pakistan in late 2006.

2007: Many reports say that Pakistan was accused of using money given by US for making its defense
against India more powerful. This thing made the impression of Pakistan worst ethically.

2008: relation of Pakistan with US was disturbed in 2007. An air strike by US army killed 11 paramilitary
soldiers of Pakistan army along with 8 Taliban. The strike and deaths faced a strong reaction from the
people of Pakistan and also from Pakistan government. Pakistani command called this act that it has
shaken the foundations of mutual trust and cooperation.
2009: A new $7.5 billion U.S. aid package for Pakistan triples non-military aid for the next five years and
aims to improve the U.S.-Pakistan relationship yet triggers controversy. The Pakistani army and political
opposition argue some clauses in the package impinge on Pakistan’s sovereignty. The bill assigned only
after legislators in Congress include an explanatory statement. Experts say the furor over the bill also
highlights deteriorating civil-military relations in Pakistan. Pakistan launches a long-awaited military
operation in South Waziristan, one of the largest militant strongholds in the tribal areas, and home to
Pakistani Taliban leadership. The offensive follows months-long military operations in Swat Valley in the
North West Frontier Province, where the army finally wrests control from the militants. That bill was
called Kerrylugar bill. On October, USA president Obama decided to strengthen the relation with
Pakistan.
2010: In the beginning of the year, Pakistan Army in a joint operation with US intelligence
agencies captured Mullah Abdul Ghani Baradar, a famous Taliban commander, from the tribal
belt of Pakistan. The success of the operation was hailed by the United States and Pakistan was
praised for its utmost cooperation.
2011: In the beginning of 2011, Raymond Davis, a CIA agent in Pakistan killed two Pakistani men in
Lahore, claiming that they came to rob him. Davis was taken into custody for killing civilians, however,
American officials claimed that he was entitled to diplomatic immunity and must be released
immediately. Raymond Davis was later acquitted of the murder charges and was sent to United States.
In the May of 2011, Osama bin Laden was killed in an operation conducted by US Navy Seals in
Abbottabad, Pakistan when they claimed to catch Osama Bin Laden and killed him at his home and took
his body with them. They didn’t showed a picture of Osama Bin Laden and he was their living near Pak
military academy, and thrown his body in sea because he was most wanted terrorist. No one knows the
reality behind this it was a blame to under pressure Pakistan and make Obama president again and they
succeed in this after this they had again bad relation with Pakistan again and called Pakistan a terrorist
country.
2012: Pakistan shut down NATO supply routes into Afghanistan. Since the beginning of 2012,
various political parties along with the military command of the country, met and held discussions on
restoring Nato (The North Atlantic Treaty Organization) supplies.NATO attacked on Pakistan & later
NATO and U.S. officials expressed regret about the deaths of the Pakistani soldiers, indicating the attack
may have been an error; but the exact circumstances remained unclear. The US has apologized to
Pakistan for the attack. Nato plays an important role fighting against terrorism. NATO is an alliance of 28
countries bordering the North Atlantic Ocean. It includes Canada, the United States, Turkey and most
members of the European Union.
2013: Since some in the U.S. government claimed that they had caught bin Laden without Pakistani help,
numerous allegations were made that the government of Pakistan had shielded bin Laden and again stand
against Pakistan.
2014: In 2014, US government files had been leaked by WikiLeaks, according to the leaked files, in
December 2009, the government of Tajikistan had also told US officials that many in Pakistan were
aware of bin Laden's whereabouts. However Secretary of State Hillary Clinton stated that "cooperation
with Pakistan helped lead us to bin Laden and the compound in which he was hiding. John O. Brennan,
Obama's chief counterterrorism advisor, said that it was inconceivable that bin Laden did not have
support from within Pakistan. He further stated, "People have been referring to this as hiding in plain
sight.
2015: In 2015, according to an internal report prepared by Congressional Research Service, Pakistan has
made full payment from its national funds towards the purchase of aircrafts which is worth USD 1.43
billion.
2016: In 2016, US government has proposed US $860 million in aid for Pakistan during the 2016-17
fiscal year, including $265 million for military hardware in addition to counterinsurgency funds to under
pressure Pakistan and used them for their own.
2017: Donald Trump announced his new strategy for Afghan War and accused Pakistan of providing safe
heavens to terrorists. "The Pakistani people have suffered greatly from terrorism and extremism. We
recognize those contributions and those sacrifices, but Pakistan has also sheltered the same organizations
that try every single day to kill our people", Trump said. Moreover Two months later, Trump tweeted that
he was starting to develop better relations with the Pakistani government.
2018: On 5 January 2018, US suspended about $2 billion in security aid to Pakistan for failing to clamp
down on the Afghan Taliban and the Haqqani Network terror groups and dismantle their safe havens, a
White House official said.
The freezing of all security assistance to Pakistan comes after President Donald Trump in a New Year's
Day tweet accused the country of giving nothing to the US but "lies and deceit" and providing "safe
haven" to terrorists in return for $33 billion aid over the last.
On September 1, 2018, the Department of Defense announced that they would postpone the transfer of
approximately $300 million in military aid to Pakistan. According to The Economic Times Pakistani
Foreign Minister, Shah Mehmood Qureshi stated, "The USD 300 million is neither aid nor assistance – it
is the money Pakistan spent from its resources against militants and in the war against terrorism. This is
the money they (US) are supposed to reimburse, but now either they are not willing or unable to pay
back."
Conclusion
Donald is against Muslims and all the things are repeating again, our today’s relation with America is bad
again and Pakistan is trying to be good with China and developing their relation with China and Russia.
CPEC is a good example to see the relation between Pakistan, China and Russia because Russia is
supporting it, it is a good triangle. Russia is our second door neighbor. Pakistan should make good
relation with these two countries and Pakistan should make distance from America and never stand with
America against any war because after every war they had to face many problems, issues and loss.
Q: There is crisis of national integration in Pakistan since its creation. What measures do you
suggest for the promotion of national integration of Pakistan? (CSS 2018)

Introduction
1. The creation of Pakistan in 1947 was unique in the sense that it was based on an ideology which sought
its roots from religion Islam. The famous slogan of “PAKISTAN KA MATLAB KIA, LA ILAHA
ILLALLAH” was the core of the entire freedom movement that had indeed gathered the Muslims of not
the majority Muslim areas only but the entire India. Pakistan was demanded to be made a laboratory
where Islamic code of conduct was to be practised by the Muslims without any differences of caste, sex,
and region and equal rights for the religious minorities being the citizens of Pakistan.
On the creation, Pakistan faced many problems of grave nature, basing on which, India had doubted the
survival of Pakistan. Indeed it was difficult to be and continue to exist for the problems were placed and
enhanced by the immediate neighbour and enemy. The important ones were, finance, the immigrants, the
control of water recourses and shifting of other assets etc. Including other factors like struggle for power
by the leaders after the death of Quid-e Azam, lack of stable and resourceful government infrastructure
delayed the progress of political stability and wholesome consistency of Pakistan’s going. The important
national issues which were to be resolved by the political leaders remained under cover and the instability
of the state systems in Pakistan caused the development to be retarded. Due to this the common masses
remained most effected because it was their progress that was affected. Out of sheer hope for betterment
and progressive life these were exploited by their political leaders. There are a number of other factors
which help in finding that why was it so easy for the masses to be exploited by the clerics for their racial,
ethnical, linguistic differences.

Background / Current Status of Ethnic Divide

The people of Pakistan are ethnically diverse. They trace their ethnic lineages to many different origins,
largely because the country lies in an area that was invaded repeatedly during its long history. Migrations
of Muslims from India since 1947 and refugees from Afghanistan since the 1980s have significantly
changed the demographics of certain areas of the country. The people of Pakistan come from ethnic
stocks such as Dravidian, Indo-Aryan, Greek, Scythian, Hun, Arab, Mongol, Persian, and Afghan.
Although an overwhelming majority of the people are Muslim, religion does not supercede ethnic
affiliations. The people follow many different cultural traditions and speak many different languages and
dialects.
Immediately after partition, Pakistan had to face great problems in the political sphere. Of many was the
issue of provincialism which was the most alarming issue for the stability and solidarity of the country.
The linguistic agitation added feul to the fire in airing sentiments of provincialism
Pakistan is a multilingual and multiethnic nation. Most of the people belong to one of the country’s five
major ethnolinguistic groups: Punjabis, Sindhis, Pashtuns (Pakhtuns), Mohajirs and Baluchis. Ethnically
distinct subgroups exist within each of these five categories. Overall, ethnic identity is multilayered and
complex and may be based on a combination of religion, language, ethnicity, and tribe. The ethnic groups
of Pakistan are distributed according to their historical settlement in the region. The current political
regions of Pakistan roughly correspond to the settlement patterns established long before the partition of
British India in 1947, when Pakistan was created as a homeland for Indian Muslims and this political
culture has stronfg remains of feudalism in it.
Punjabis constitute 58 percent of the population. They have diverse origins, but over the centuries they
coalesced into a coherent ethnic group in the historic Punjab region and developed a common language,
Punjabi.
Sindhis constitute 13 percent of the population of Pakistan. Their traditional homeland is the province of
Sind, where they maintain the country’s largest concentration of large landholdings.
Pashtuns constitute 12.5 percent of the population. Pashtuns are divided into many tribes, and their tribal
structure is egalitarian. Pashtuns follow a strict code of conduct known as Pashtunwali (“Pashtun Way”).
Pashtun identity, including their interpretation of Islamic law, is formulated and guided by Pashtunwali.
Baluchis constitute 4 percent of the population. Most Baluchis are nomadic, migrating wherever the
desert-like conditions of their homeland, the Baluchistan Plateau, provide enough vegetation to raise their
animals. Raising livestock, mainly sheep and goats, and selling their hides and wool is a way of life for
the Baluchis. They also have apple, almond, and apricot orchards, and some grow wheat. Baluchi tribal
organization is strictly hierarchical, and each tribe is headed by a sardar (tribal chief). Most Baluchis
speak Baluchi (Balochi), a language that is similar to Persian. About one-fifth of Baluchis also speak
Brahui, a Dravidian-derived language. Baluchis are the least educated and poorest segment of the
population and are inadequately represented in government.

Mohajirs constitute about 8 percent of the population. They are Muslims who settled in Pakistan after the
partition of British India in 1947. Unlike other cultural groups of Pakistan, they do not have a tribe-based
cultural identity. They are the only people in the country for whom Urdu, the official language, is their
native tongue. Mohajirs were the vanguard of the Pakistan Movement, which advocated the partition of
British India in order to create the independent nation of Pakistan for Indian Muslims. After the partition,
a large number of Muslims migrated from various urban centers of India to live in the new nation of
Pakistan. These migrants later identified themselves as mohajirs. A large number of Mohajirs settled in
the cities of Sind Province, particularly Karāchi and Hyderābād. They were better educated than most
indigenous Pakistanis and assumed positions of leadership in business, finance, and administration. Today
they remain mostly urban.
Sindhis felt dispossessed by the preponderance of Mohajirs in the urban centers of Sind. With the
emergence of a Sindhi middle class in the 1970s and adoption of Sindhi as a provincial language in 1972,
tensions between Mohajirs and Sindhis began to mount. The 1973 constitution of Pakistan divided Sind
into rural and urban districts, with the implication that the more numerous Sindhis would be better
represented in government. Many Mohajirs felt that they were being denied opportunities and launched a
movement to represent their interests. The movement, which evolved into the Mohajir Qaumi Movement
(MQM) in the mid-1980s, called for official recognition of Mohajirs as a separate cultural group and
advocated improved rights for Mohajirs.

Problems / Factors Effecting the Cohesion of Pakistan

Financial Issues between Provinces and the Federation. The issue of finances has a dual nature of being
parallel (between provinces) and vertical (between provinces and the centre). Allocation of financial
resources and revenues has remained a debatable point since long in vertical and parallel aspects. To find
out the resolve to financial matters,Under the Constitution, the National Finance Commission is obliged
to announce every five years the formula for resource distribution between the federation and the
provinces and also among the provinces. If for some reason the NFC fails to come up with an award in
time, the Constitution provides a way out through the Council of Common Interest (CCI) which has to be
convened to sort out differences among the contending parties and finalize an award. However, for the
last three years, the NFC has not been able to finalize a new formula because of lack of consensus among
the provinces over the new distribution formula. The federal government has indicated that it is ready to
give the provinces 50 per cent from the divisible pool. However, the provinces have failed to come up
with an agreed formula for distribution of resources among themselves. The president convened a
meeting of all the four chief ministers and their finance ministers to unravel the NFC tangle.
Balochistan Issue. Balochistan is largest part of the country area wise and rich in mineral resources. It
has different kind of terrain features causing difficulties in development process of Balochistan. Due to
less literacy rate Baluchi tribe heads make endavours to exploit the innocence of the public and cause
hurdles for the betterment and peaceful resolve of the issues. One of the main issues which has its origin
since long and that aggravated the situation recently is Sui Gas Fields. Baluchi people have the
resentments that Balochistan has been neglected throughout under a succession of different governments.
If any development has been done, it has clearly benefited the centre and the people living in other
provinces. A clear-cut discrimination is seen in dealings with the largest province by all governments, be
it in terms of health, education, or development. The province has only one university, and that also
doesn't have all the departments needed, one medical college lacking any facilities for post-graduate
studies, one engineering university and a polytechnic college each for boys and girls. The health sector
does not present a much brighter picture: the capital of the province has only two government-run
hospitals, neither having all facilities. All districts have hospitals but none can handle emergencies and
they lack equipment, technicians, and medicines. There is a shortage of clean water, metalled roads. Even
the development projects like Gwadar port, Mirani dam, Kacchi canal, exploration of natural resources in
Kohluare being resisted by the baluchis.
Provincial Autonomy. The 1940 Resolution envisaged Pakistan to be an "independent sovereign state"
rather than an amalgam of several autonomous and sovereign states. It is, however, astonishing that some
of our politicians have asserted that the powers conferred on the federal government by the 1973
Constitution, are far in excess of what was actually envisaged by the founding fathers of Pakistan.
Accordingly, they are demanding a new constitution under which all the present functions being
performed by the federal government, with the exception of defence, foreign affairs and currency, should
be transferred to the provinces. The 1973 Constitution, which has already designated the provinces to be
autonomous cannot, however, be blamed for the political, economic and social woes, particularly of the
smaller provinces, as alleged by some political leaders. As a matter of fact, most of these leaders, who are
demanding annulment of the present Constitution, ruled the country, from time to time, under the same
constitution. It is another matter that instead of governing their provinces constitutionally, they resorted to
authoritarianism only to protect their personal interests.
Ethnic / Provincial Groups. The growing ethnic divide in Pakistan has become a matter of concern to
its people as it poses a serious threat to its solidarity and territorial integrity. The ethno-national
movements that sprout in Pakistan from time to time, detrimental to its national unity. The ethnic problem
in Pakistan is indeed an important and intricate issue and must, therefore, be addressed prudently to avoid
unacceptable consequences. Regrettably, no serious efforts have ever been made in Pakistan to create
solidarity among the several disparate ethnic groups. As a result, the hopes of making the country a
unified Muslim State, nurtured by its founding fathers, have turned out to be illusory
Sectarianism. The sectarian war between Pakistan's Shias and Sunnis is on since long and has deep roots
with the objectives of foreign agencies e.g., RAW, KJB ans Mosad. This bloody and deadly issue has
now some what merged with All militant groups working in Pakistan in the name of jihad.
Political instability. Since achieving independence in 1947, Pakistan has had a checkered constitutional
history reflected not only in the country's political instability but in the relative immaturity of its
legislative institutions. Frequent military interventions on the one hand and endemic violence and
corruption in public life on the other have stunted the growth of a true parliamentary system. This
particular aspect of a states life prevails all and augments all other refrences of states policies and its
progress, which Pakistan has been lacking unfortunately.
MEASURES TO RESOLVE THE PROBLEMS STRENGTHENING THE INTEGRITY OF
PAKISTAN
 Political Stability. Leadership will, nevertheless, remain a critical variable in the current political
equation. The dispute over his wearing two hats notwithstanding, President Musharraf has
displayed considerable maturity in his dealings with local politicians and foreign heads of state,
and the nagging issue of India's insistence on the prerogatives of a major state in South Asia,
which remains a constant irritant to policymakers in this country. Furthermore if we want to be in
a comparatively stronger position we need to strengthen internal political stability through
establishing the primacy of the representative institutions within the framework of a nationally
agreed political framework, building up institutions rather than individuals, and strengthening the
rule of law and the principle of taking decisions on merit.

 Good Governess. This implies that the systems are to be checked and supervised in the interest of
nation and the state and not the individuals. Indeed we are on our way to progress. Whatever
present government is doing has appeared to be beneficial to the public and the state as a whole.
This encompasses the economical activities, maintaining the growth rate, implementing the state
policies in true spirit, improving the sate institutions’ efficiency and keening the organs of state
abreast about the functions of the government and keeping them along convincingly.

 Redressing the Grieviences of Small Provinces Including Balochistan.

  Water and Power Resources Including Kalanagh Dam
a. As far as provincial water management system - establishment of autonomous water authority in each
province - seems to have gone nowhere in the provinces of Punjab and Sindh.
b. Similarly, with regard to the distribution of electricity - most of which is generated from the Indus
water resources - the impact of reported restructuring is not visible either. So far a competitive and
efficient public-private partnership has not developed to reduce the waste in, and theft from, the existing
supply of power.

c. It would be relatively easy to show that doing nothing is not an acceptable option to meet the future
demand for water and power. However, the case for Kalabagh dam rests on several crucial assumptions
and observations, some of which are hotly contested.

d. Why not smaller dams and water diversions for additional water? For electricity, perhaps coal -
reportedly Sindh has large deposits - can be a significant source for power generation with new
technologies?
Financial Issues. Admittedly it is not easy to identify the corporate ownership and management of
industries and services. But it is also a fact that the province provides resources and services that
contribute to the personal and corporate incomes no matter where the individual entrepreneur or the
corporate body resides or brings capital from.
The NFC should make a start by reducing the weight of population size from 100 per cent to 50 per cent,
with the rest given to the other two factors-level of development and revenue generation-in the ratio of 35
and 15 per cent, respectively. The federal government should stop the practice of providing arbitrary -
implying political considerations - grants-in-aid to provinces, except in severe emergencies. Since the
suggested transfer formula puts onerous demand on the quality data about each province's population size,
level of development and revenue contribution, it is absolutely essential that the federal and provincial
governments with other autonomous public agencies and private sector institutions produce credible data
and evidence on these indicators.
 Provincial autonomy through constitutional measures which may include:

Revision of distribution of powers between the centre and the provinces through constitutional
amendments;
I. Transfer of subjects from Federal List to the Concurrent List;
II. Adding Provincial List;
 III. Empowering the Senate of Pakistan;
IV. Fiscal autonomy to provinces in order to address the issue of vertical fiscal imbalance.

27. Ethnic / Provincial

a. Groups to consolidate our nationhood, the broadest possible national consensus should be sought on
major issues, foreign and domestic, giving special regard to the feelings and interests of the weaker
groups, the smaller provinces and the minorities. An example has to be set from the top downwards of the
exercise of integrity in its broadest sense, entailing the accord of priority to social, collective, national
interests over personal, group or party interests. This is the basic touchstone on which the regime's
credibility and legitimacy, an essential pre-requisite for fulfilling its challenging tasks, would be tested.

b. The people of Pakistan, who have a moral responsibility to help their compatriots in the smaller
federating units, should not, therefore, remain apathetic and unwilling to fulfil this responsibility.
Regardless of their political affiliations, they should persuade their rulers to address the widespread
discontent prevailing in the smaller provinces to meet the ends of justice, which is the only way to avoid
undesirable consequences.
Sectarianism.
a. The first concrete step was taken by Pakistan Government. While announcing a massive campaign to
eradicate the sectarian menace, the General Parvez Musharraf banned three sectarian groups, Sipah-e-
Sahaba Pakistan (SSP), Tehreek-e-Jafria Pakistan (TJP) and the Tehrik-e-Nifaz-e-Shariat Mohammadi
(TNSM) and put the Sunni Tehrik on notice. Another two sectarian groups - Sipah-e-Mohammad
Pakistan (SMP) and Lashkar-e-Jhangvi (LeJ) had been banned earlier, on August 14, 2001.

Conclusion
29. The future, as it would unfold in a chosen timeframe, is a matter of permanent speculation and
planning by individuals, organizations and nations. It is, perhaps, the most fascinating of human activities
influenced no less by our hopes and fears as by the dynamics of the given circumstances. But projecting
the future can be a very complex exercise, to the point of being meaningless, if one were to take into
account all the numerous factors, from the universal to the local, that could impinge on our future.
between the revivalists and the reformists. For the sake of brevity of reference let’s call them ‘the four
tensions’. And to begin with, let’s acknowledge the fact that the future of the state of Pakistan would
depend on our ability, or the lack of it, to understand and resolve these tensions that can, if allowed to
fester, shatter our social fabric and, ultimately, the state itself.
Q What major economic challenges are being faced by Pakistan? What recommendations do you
suggest to deal with these issues? (CSS 2019)

INTRODUCTION HISTROICAL PERSPECTIVE:

In 1947, Pakistan had 30 million people with per capita income of 100$. Agriculture accounted for almost
50% of economic output with hardly any manufacturing, as all industries were located in India. Therefore,
it was unable to feed 30 million people and was dependent on PL-480 imports from the USA. From
thereon, Pakistan has come a long way. Today with 220 million people, our per capita income in 2019 is
1410$ which was ten times more. Pakistan is the third largest exporter of rice in the world and producing
enough food grains to feed its people. 4 million tons of rice is exported every year by Pakistan which is
surplus to our requirements. Pakistan is also one of the five major textile producing countries in
the world. So if we measure in relation to where we were vis-à-vis structure of economy, agriculture has
come down from 50% to 20%. Therefore, out of total national income, agriculture’s contribution is just
20%, but instead of being deficient in food production. Agriculture is not only crops, within agriculture
there has been a significant change. Livestock, dairy, mutton, beef, poultry and similar other products is
50% of agriculture output in Pakistan. Pakistan also produces third largest quantity of milk in the world.
So within agriculture sector, there is a change i.e. major crops are only 36% of agriculture value added
and 14% are minor crops, fisheries, orchards, fruits and vegetables.
In 1969, Pakistan exports of manufactured goods were higher than the combined exports of Indonesia,
Malaysia, Philippines and Thailand. In 1960’s Korea emulated Pakistan in its five years planning process.
Ten years ago, India which was way behind Pakistan (till 1990’s) is now way ahead. As an economist and
student of globalization, the biggest challenge is: how can we organize ourselves to reach that position
where at least we can be running not at the nine second a mile but at least ten second a mile race which is
going on in the global economy. Ten more important challenges facing Pakistan’s economy are
deliberated in the succeeding paragraphs.
Challenges to Pakistan’s Economy
a. We Consume More and Save Less. Out of every hundred rupees of our national income, we
consume 85 rupees and save only 15 rupees, which means that the amount of money which is
available to invest for economic growth and advancement is too little. Because to grow by 6%,
you need at least 24-25% investment rate - and if you want to rely on domestic savings, your
saving rate should be 25%. China’s saving rate is 50%, so this is the contrast as to why we are in
serious difficulty because as a nation this is a problem which we have to recognize. We have to at
least double on savings rate otherwise we will remain dependent on foreign sources.
b. We Import More and Export Less. Till 2007-2008, 80% of our imports were financed by our
export earnings. This ratio has come down to only 50%, it may go up to 60% but a gap of 40% of
financing needs in order to keep with the import level still exists. As a nation we prefer to use
even the basic commodities of foreign countries rather than locally manufactured goods. Unless
we do not change this attitude of preferring the imported goods we have to keep on relying on
outsiders to fill in this gap b/w our imports and exports. Relying on outsiders’ means that there
are cycles, ups, and downs i.e. when things are good, one gets financing, and when things are bad
one starves for financing. No nation which strives to preserve its honour must go through this
particular route. The lower is this gap between our export earnings and expenditure on imports -
and that can be achieved only by expending our exports; our reliance on external sources would
be reduced.

c. Government Spends More than it Earns as Revenues. Fiscal deficit is the difference between
the revenues which are collected in a year and the total expenditure incurred by the Government.
Pakistan’s government takes away 20% of national income as its own. 80% is left in the private
sector and 20% in the hands of the government is spent on defence, debt servicing, development
on education, health, general administration etc. The revenue generated is only 15% of the GDP at
best, and in the worst days it is 12 to 13%.
In 2007-2008, Pakistan’s fiscal deficit was more than 7% which means its income or revenues
were only 13% of GDP whereas, expenditures were 20%. Therefore, fiscal deficits have to be
financed from somewhere, so how do you finance them; you either go again begging the external
donors, or to the State bank of Pakistan. The financing provided by the State bank of Pakistan is
dangerous because it creates high inflation in the economy, which is injurious to the middle class,
those earning fixed wages and salaries, and the poor.
Our Share in the World Trade is Shrinking. In 1990, Pakistan’s share was 0.2% of the world
trade. After 20 years it has come down to 0.12% in a very buoyant world economy. World trade
has been growing faster as compared to the world output. India in the same period had doubled its
share from 0.7% to 1.4%, while Pakistan is going the other way and that is the reason why
exports/ imports imbalance is increasing. We are not taking advantage of the opportunities which a
buoyant world economy is providing. Pakistan is stuck with only a few commodities – textiles,
leather, rice, sports, goods and the surgical goods. We have not entered the markets for more
dynamic products. All our exports are to a few markets – the USA, EU and the Middle East. So
this narrow export base and very limited geographical spread are not allowing us to expand
 our share. Unless we improve the quality of our products, go out and do the marketing abroad,
invest in research and development, the prospects do not look promising.
We Badly Lag in Social Indicators. One of the most glaring weaknesses is that a country like
Pakistan that should have had best indicators in literacy, infant mortality, fertility rates, in access to
water supply, in primary enrolment ratios has social indicators which are more comparable to
Africa rather than to the countries of similar per capita income. Even Tajikistan, which is a very
poor country, has better literacy rate and primary enrolment ratios than Pakistan. What does it
means? It means that if we had literacy rate of 100% instead of 55%, then in 2009-2010 our per
capita income would have been 2000$ rather than 1000$. Instead of 30 million middle class in
Pakistan we would have 60-70 million middle class people; we would have poverty reduced to 15-
20%.
We Face Energy and Water Shortages. Another challenge we face today is energy and water
shortages, and that is not because we are not generating enough electricity or we are not having enough
water. With the losses of KESC from the point it has generated to the point they realize the billing is 45%,
so 55% people are paying for those who are stealing the electricity. Government of Pakistan out of its
own limited resources is paying 200 billion rupees every year as subsidies for electricity. We have silting
of our dams, but no additional dams have been constructed since Tarbela in 1974. We have water course
losses of about 20-25%. Even after these losses, the water is inequitably distributed. The influential land
lords are able to take greater share of water from the canals as compared to poor farmers. Therefore, the
productivity of poor farmer is only one ton per acre as compared to 3 tons by large holders. If we provide
the water equitably to the small farmer, he would also be able to increase the productivity from one to at
least two tons resulting into additional income, increase in exports of food grains, cotton and fruits and
vegetables which will add to export earnings of Pakistan.
Cost of Doing Business is High. Pakistan is ranked among the bottom half of the rankings of
the countries where cost of doing business is quite high. It is not high for any particular reason but
because of Labour laws, inspections by multiple agencies, the delays in the court system, infringement of
intellectual property rights and evasion of taxes .

Crisis of Governance and Implementation Weaknesses. If we glance on policy documents of various

governments on education, agriculture, health, trade policy etc, and look at the same policy forty years
ago and the problems, there is hardly any significant record of implementation of those policies or plans
over this period. We produce five years plans and all kinds of medium term frameworks, but it is the poor
governance and implementation that are the weak links in getting things done. Unless we strengthen civil
services and bring about a merit based system of recruitment, promotion, performance evaluation,
compensation, disciplinary action, etc, we will not be able to see any difference in the quality of
governance.
Political Stability, Law and Order/Security. The overall arching theme is that for a robust economy we
should have political stability, law and order and security. The Armed Forces of Pakistan deserve
gratitude for what they have done in Malakand Division to bring about stability as far as the law and order
Situation is concerned. The sooner the country is gotten rid of this image of political instability, poor law
and order situation and insecurity, whereby investors from all over the world hesitate in coming to
Pakistan and invest, we will not be able to make any progress in this country. In 2007, Pakistan was one
of the most favourite countries among the international investor community. A thirty year piece of paper
was floated which a bond for Pakistan to be paid in 2037 and Pakistan was got four times over
subscription at a price which was only 300 basis points above the US treasury. Very few countries can
claim to have that kind of credibility with international fund managers. However, in two years time we
have missed that boat. Therefore, it is imperative that we resume the journey which has been interrupted
by nurturing a stable, secure and peaceful political environment.

Prospects/Solutions to Improve Economy

How can we overcome these challenges and problems and improve our economy? A lot has been written
and talked about, but I will focus on only a few action points.
Change in National Psyche and Mindset. We as a nation are too much negative oriented and too much
cynical where we find everything wrong in this country. Unless we change our mindset and unless
everybody who is doing what he is supposed to do, carries out his or her task with sincerity and honesty,
we are not going to go anywhere.
Building up of Human Capital. There is no substitute to building up human capital. Private sector,
public sector, NGOs, local communities, philanthropists etc, all here to put their hands on deck and
participate in making sure that every child goes to school. Every high school graduate has some technical
and vocational skill or goes for higher education. Unless we build up human capital, we are just going to
be left behind because the world economy is going to be a knowledge based economy.
Use of Technology. The technology is spreading like a wild fire. How many people five years ago could
have thought that even in a small towns and villages of Pakistan, one would access to mobile telephones.
95 million Pakistanis have mobile phones today. You can use this technology in order to provide them
banking services, information on climate/weather, agriculture extension, health, education etc. It is a
powerful tool which can leapfrog a lot of time which we have wasted. Using technology particularly the
information/communication technology for the betterment of social and economic problems of Pakistan is
something which needs to be done but it cannot be done the way we have compartmentalized this into
different ministries.
Young Labour Force. Pakistan is one of the few countries which has a young labour force which can be
harnessed for its own and global economy. Japan, Europe, USA and after 2050 China are going to have
aging population where the ratio of old to young people is going to increase. India and Pakistan are two
countries where the ratio of younger people to the older ones is going to increase. If we tool these young
men and women properly, we increase the female labour force participation, give them skills and
knowledge, they can become the labor force for the rest of the world. This will give a big boost to
Pakistan’s own economy.
.Governance, Devolution and Decentralization. As the population is increasing, one cannot govern
Pakistan sitting in Islamabad, Karachi, Lahore, Peshawar or Quetta. One has to devolve powers,
decentralize and delegate authority, provide resources to the local/district governments so that they can
take decisions at their own. Those decisions would be very much in accordance with the requirements and
the needs of those communities. Sitting in Islamabad one cannot visualize what is needed in Chaghi or
Loralai, but the people in Loralai and Chaghi know exactly whether they need water, fertilizers or fruit
processing industry.

Q:
1. Introduction :
Energy is considered to be life line of any economy and most vital instrument of socioeconomic
development of a country. Energy is pivotal in running machinery in factories and industrial units, for
lighting our cities and powering our vehicles etc.
There has been an enormous increase in the demand of energy as a result of industrial development and
population growth, in comparison to enhancement in energy production. Supply of energy is, therefore,
far less than the actual demand, resultantly crisis has emerged. An energy crisis can be defined as any
great bottleneck (or price rise) in the supply of energy resources to an economy.

2. Pakistan’s Energy Sector:

Pakistan’s energy infrastructure is not well developed, rather it is considered to be underdeveloped and
poorly managed. Currently the country is facing severe energy crisis. Despite of strong economic growth
and rising energy demand during past decade, no serious efforts have been made to install new capacity of
generation. Moreover, rapid demand growth, transmission losses due to outdated infrastructure, power
theft, and seasonal reductions in the availability of hydropower have worsened the situation.
Consequently, the demand exceeds supply and hence load-shedding is a common phenomenon through
power shutdown.
2.1 Energy Supply :

During 2016-18, Energy supply and per capita availability of energy witnessed a decline of 0.64 % and
3.09 % respectively in comparison to previous year.
Pakistan needs around 15,000 to 20000 MW electricity per day, however, currently it is able to produce
about 11,500 MW per day hence there is a shortfall of about 4000 to 9000 MW per day. This shortage is
badly hampering the economic growth of the country.

2.2 Energy Consumption :

Pakistan’s energy consumption is met by mix of gas, oil, electricity, coal and LPG sources with different
level of shares. Share of gas consumption stood at 43.7 %, followed by oil 29.0 percent, electricity 15.3
percent, coal 10.4 percent and LPG 1.5 percent.

3. Sources of Energy in Pakistan:

3.1 Non-renewable resources (Fossil fuels): [Limited – Expensive]

Non renewable resources are primarily fossil fuels emanating from remains/decomposition of animals and
plants deposited deep into the earth crust and converted into oil and gas. These resources cannot be
replenished. There are three main types of fossil fuels: coal, petroleum, natural gas and liquefied
petroleum gas (LPG).
a). Petroleum products:
In 2016-18, consumption of petroleum products was 29% of total share of energy. Majority of crude oil is
imported from gulf countries to meet the demand. Power, industry and transport sectors consume higher
quantity of petroleum followed by agriculture and house holds. Petroleum is also used in generation of
electricity, which counts 64 percent of total electricity generation (34 coming from hydro generation).
Balance recoverable reserves of crude oil in country have been estimated at 303.63 million barrels and we
are extracting approximately 24 million crude oil annually, meaning if we do not explore new wells, we
will exhaust our current crude oil reserves in 12-13 years.
b). Natural Gas:
Importance of natural gas is increasing rapidly. Average production of natural gas is 4,048.76 million
cubic feet per day as against 3,986.53 million during corresponding last year, showing an increase of 1.56
percent. Natural gas is used in general industry to prepare consumer items, to produce cement, for
manufacturing fertilizers and to generate electricity. In form of CNG, it is used in transport sector. Share
of natural gas in energy consumption is 43.7 percent. Due to price differential between CNG and Petrol,
vehicles are using converted to CNG and approximately 2.0 million vehicles are using CNG and currently
Pakistan is the largest CNG user country in the world. Liquefied petroleum gas (LPG) contributes around
0.7 percent to total energy supply in country and is being imported to stop deforestation in hilly areas.
c). Coal:
Pakistan has coal reserves estimated at over 185 billion tonnes, including 175 billion tonnes identified at
Thar coalfields. Coal is primarily being used in brick kiln and cement industries and approximately 67
percent coal is imported because indigenous coal is not considered of good quality.
Guddu plant is largest plant thermal operated plant with a capacity of 1,650 MW, while two largest
Independent Power Plants (IPPs) in Pakistan are Kot Addu (1,600 MW) and Hubb River (1,300 MW).

3.2 Renewable Resources :(Unlimited – sustainable – clean)

Renewable energy resources are those, which are naturally replenished and comes from resources such as
water, sunlight, wind, rain, tides, and geothermal heat.
a). Hydro power:
Hydro power is generated by using electricity generators to extract energy from moving water. Pakistan is
having rich resource of energy in hydal power, however, only 34 % of total electricity generation is
coming from hydro power. Currently we are having 6555 MW against the potential of 41000 to 45000
MW.
Current Hydropower stations:
Tarbella Dam : 3,478 MW
Ghazi Brotha: 1450 MW
Mangla 1,000 MW
Warsak 240 MW
Chashma 184 MW
Potential Hydropower stations:

Diamer-Bhasha Dam 4500 MW

Munda Dam – Swat river in Mohamand Agency 740 MW
Kalabagh Dam 2400-3600 MW
Bunji Dam 5400 MW
Dasu Dam 3800 MW
4.Causes of Energy Crisis : Pakistan’s energy crisis traces its roots to following distinct causes :
Growing Energy Demand
; over the years there is greater need of energy because of;
• increase in population,
• enhancement in lifestyle
• industrial and agricultural growth
• greater transportation needs
Lack of proactive and integrated planning for production of energy:
Pakistan has had wider potentials to tap energy, however, due to lack of any integrated/proactive
planning, very less number of power producing plant were installed to meet futuristic demands.
Resultantly, over the years, the gap between energy demand and supply drastically grew and now against
demand of 20000 MW, we are having around 11500 MW.

Imbalanced energy energy mix

Energy mix in Pakistan is quite imbalance in comparison to other countries, with greater reliance on non-
renewable resources of gas (43.7 %) and oil (29 % - majority of which is imported). Prices of petroleum
products/crude oil fluctuate and in current Afro-Arab political crisis, the oil prices are likely to increase
manifold affecting oil prices in Pakistan.

o Thar Coal:
Pakistan is having one of the largest coal fields in Thar, having reserves of more than 175 billion
tones, which exceeds equivalent oil reserves of Saudi Arabia, Iran etc.
In addition to power generation, this coal can be used for chemical and fertilizer production.
Moreover, employment provided to workforce can be instrumental in increasing GDP and
economic prosperity to many families.
o Hydal power generation :
Pakistan has potential of hydro resources to generate 41000 to 45000 MW, however, only 6555
MW is currently being generated by this important renewable resource.
Four large hydro power dams namely Kalabagh 3600 MW, Bhasha 4500 MW, Bunji 5400 MW
and Dasu 3800 MW can be constructed to generate hydro electricity.
Similarly, many small to medium hydro plants can be installed on rivers and canals etc.
5. Consequences of Energy Crisis :
i). Economic Factors: Energy is pivotal for running all other resources and crisis of energy directly
influences all other sectors of the economy. The economic progress is hampered by decline in agricultural
productivity as well as by halting in operations of industries. One important factor of lower GDP and
inflation of commodity prices in recent years is attributed to shortfalls in energy supply.
ii). Agriculture Sector: Agricultural productivity of Pakistan is decreasing due to provision of energy for
running tube wells, agricultural machinery and production of fertilizers and pesticides. Thus higher
energy means higher agricultural productivity.
iii). Industrial Sector: Nearly all Industrial units are run with the energy and breakage in energy supply
is having dire consequences on industrial growth. As a result of decline in energy supply, industrial units
are not only being opened, but also the existing industrial units are gradually closing.
iv). Unemployment: By closure of industrial units and less agricultural productivity, new employment
opportunities ceased to exist and already employed manpower is shredded by the employers to increase
their profit ratios. Thus energy crisis contributes towards unemployment.

v). Social Issues: This factor is primarily related to the domestic usage of energy (cooking, heating and
water provision). Load shedding cause unrest and frustration amongst the people and results in agitation
against the government.

vi). Poverty: Declination in economic growth, lower agricultural productivity, unemployment and
shackling industrial growth result in increasing poverty. Currently, around forty percent of our population
is living beyond poverty line and this ratio is increasing day by day. Ample control of energy crisis will
surely yield in curbing the menace of poverty.

6. Conclusion:
Energy Crisis has, moreorless, plagued all sectors of Pakistan’s machinery ranging from economy to
industry, agriculture to social life, inflation to poverty and it is hampering national progress in a drastic
manner. Nonetheless, menace of energy crisis can be overwhelmed by government through making
effective policies and its proactive implementation. Simultaneously, it is the responsibility of us, the
people of Pakistan, to utilize the available energy astutely and wisely to play our due role for progress of
the country.
7. Recomendations/Solutions of Energy Crisis :

Energy crisis can be curtailed by :

i). Reducing unnecessary energy use:
o Usage of electricity saving devices
o Awareness campaign for energy saving
o Reduction in unnecessary transportations by developing good public transport systems and
strengthening Pakistan railways
o Reduction in industrial uses with installation of effective equipment/ energy efficient and with
increasing efficiency of workforce (cost effective)
o Decreasing reliance on rental power projects, because instead of doing any good, they are
increasing prices of electricity.
o Decreasing line losses by using efficient power transmission cables
ii). Developing new energy resources :
o Tapping indigenous resources (Thar coal)
o Using renewable resources (water) by constructing new dams and hydro power plants
o Import of natural gas by IPI (Iran Pakistan India) and TAPI (Turkmenistan, Afghanistan, Pakistan
and India) pipelines
o Import of electricity from Tajikistan -through Pak Afghan Tajikistan transmission- and Iran
(approximately 1000 MW from each of them) pipelines
o Utilizing alternative energy resources :
Wind power
Biodiesel /Biomass
Solar
Tidal
o Enhancing civilian nuclear capacity