CASA-1000, Economics, Pakistan, India, Afghanistan

The concept of regionalism has rebounded in the last few decades to overtake the idea of a globalized world that had been steadily losing impetus since the initial euphoria following the end of the Cold War. With nations cementing their positions in regional blocs oriented around common economic and political concerns, the world started reorganizing itself along new lines. Now instead of being driven by ideological affinity with a major power several thousand miles away, states started putting their own regional integration first and moving towards a Triadized system.

Pakistan in particular serves as an interesting case in the study of regional identity because the country sits at the crossroads between three highly distinct regions that have considerable influence on the country’s history as well as its language, politics and culture. Straddling the borders of the Middle East and South Asia while being separated from Central Asia by a 14km wide strip of land known as the Wakhan Corridor to the North-West, the country finds itself in a unique position where it can serve as a political and social conduit between these regions. Pakistan represents the shared characteristics that have come to interact in establishing a distinct Pakistani culture and identity, on the cultural heritage of these civilizations.

However, this potential has largely been squandered up till now as Pakistan, despite its seemingly privileged position, has been missing out on reaping the fruits of being part of an effective regional union. Whereas SAARC has been limited in its efforts by becoming another battleground for Pakistan and India to contest for, Pakistan’s efforts to connect with the Arab Nations have been limited by linguistic and cultural differences and the OIC has become all but redundant due to the competing sectarian and political ambitions of blocs within the organization itself.

In all this chaos, Pakistan’s admittance to the SCO as a full member opened several new opportunities for the country and also reinvigorated several projects that had since been consigned to the file cabinet owing to slow progress and also Pakistan’s gradual drift away from Central Asian states over questions pertaining to Afghanistan’s political future.

One of the most important projects that had remained an elusive prospect over the years was the CASA-1000 project which was intended to limit Pakistan’s summer electricity shortfall and the resulting debilitating power outages by tapping into the energy grids of Tajikistan and Kyrgyzstan to import over 1300MW of hydro-electric power which is produced as the summer surplus by these nations. It’s easy to see why the project commands the significance that it does, the initial plan worth US$ 1.16 Billion involves laying an 850km long, 500KV transmission line that will bring 300MW of energy to Afghanistan and 1000MW further on to Pakistan, the project has the capacity to be expanded with another line passing through Wakhan Corridor that should allow Pakistan to import well over 5000MW worth of electricity which would be enough to effectively overcome almost Pakistan’s entire summertime shortfall. At the same time, the project will allow Tajikistan and Kyrgyzstan to convert their surplus electricity which is otherwise wasted, into a means of earning much needed foreign exchange which these nations desperately require as they suffer from crippling poverty owing to limited exports and harsh terrain.

Map of CASA 1000 (Source: Hydroworld)
Map of CASA 1000 (Source: Hydroworld)

The question arises then, how has such an essential project remained a non-starter for the greater part of a decade and it took two years for the agreement on tariffs to be followed by the actual ground breaking for the project? One of the most obvious and pressing concerns has been the security for the project itself, not only for the people working on the project but the actual infrastructure itself which is planned to pass through vast tracts of Afghanistan and Pakistan where maintaining government writ has proven troublesome. The transmission line would represent an easy target for militants looking to disrupt the project and to send a statement to the government, the sudden loss of 1000MW of electricity from the national grid could cause the system to trip and trigger a nationwide blackout. Whereas Pakistan has managed to further strengthen its security situation and has established firm control over the region, the situation has only deteriorated in Northern Afghanistan where militant activity has increased several fold before culminating in the brief takeover of the city of Kunduz by the Taliban in September 2015. Although they only took control of the city for three days, the episode boosted the morale of the Taliban as it marked their first capture of a city in the 15 years since the American invasion of Afghanistan. The event marked their greatest show of power since the invasion and that too in Northern Afghanistan where they have historically found themselves challenged.

Another concern that can threaten the project is the weak financial support structure behind the plan, CASA-1000 is due to be funded by the World Bank, the Islamic Development Bank and a number of smaller donations from friendly countries. A single donor backing out from the project could put the entire project in jeopardy and threaten the investment on infrastructure that might be developed up till that point, this lack of fiscal transparency and the resulting instability makes the CASA-1000 project a risky investment right from the onset.

Finally, the capability of the Central Asian States to provide the promised share of electricity has also been subject to question. Electricity generation is not constant and the output can exhibit sharp fluctuations depending on a number of factors which might be as obscure as the volume of snowfall last winters and the mean summer temperatures. Kyrgyzstan has been plagued by power shortages of its own in the past and has had to rely on Kazakhstan to import electricity and Russia for its gas requirements. The country’s own energy woes cast a shadow of doubt over its ability to be able to meet its commitments in providing the requisite share of energy, at 30% of the total, to Afghanistan and Pakistan. Whereas Tajikistan would still have a reasonably safe buffer to ensure that its own supply is not disrupted by a shortfall in Kyrgyzstan but whether Tajikistan will be obliged to meet the difference from their own grid in return for the Kyrgyz share of the profit remains to be seen and as of now, there seems to be no agreement that is meant to address this contingency.

In conclusion, although the project shows its appeal on paper and is fairly balanced to help ensure that all parties are able to secure their due interests, there needs to be some serious deliberation on the challenges that face the project and viable contingencies need to exist beforehand in order to ensure that the project does not suffer unexpected setbacks any longer. Furthermore, the project must be insulated from fiscal mismanagement by clearly distributing the liabilities between the contracting parties and agreeing to establish a fund which can ensure that a suitable financial solution remains secure against the progress of the project and ensure that financial hurdles will not be able to delay the plan any more. Aside from the losses to the national exchequer due to falling productivity owing to power outages, Pakistan cannot continue to be seen as a party that lacks the goodwill to see its contracts through to the end, Pakistan’s lack of initiative on the TAPI as well as the Iran-Pakistan Gas Pipeline has already lead to Pakistan’s engagement with the concerned countries to be left worse off than it started. Meeting commitments and ensuring the timely as well as successful completion of projects will help cement Pakistan’s position in the region with the concerned nations.

 

 

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