May 31, 2024

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IntelBrief: Protests Erupt in Kashmir Over Affordable Electricity

AP Photo/Mukhtar Khan

Violent protests that left four dead erupted in Pakistan-occupied Kashmir (PoK) earlier this month over grievances on electricity and flour prices. Kashmir’s economy has long suffered due to its position as a conflict zone since the partition of the Indian subcontinent in 1947. A group called the Jammu Kashmir Joint Awami Action Committee (JAAC) initiated the protests on May 10 after claims that officials in the JAAC had been preemptively arrested by Kashmir officials. By May 11, protests began in the capital of PoK, Muzaffarabad, with thousands taking to the streets in protest. On May 13, Pakistani officials sent paramilitary rangers into Muzaffarabad to quell the unrest, however, this led to violent clashes in which three protesters were killed, two of whom reportedly died from gunshot wounds, and one police officer, along with over 100 injured. Authorities also shut down schools and restricted internet access in response to the unrest. The next day, on May 14, the JAAC declared the day a “black day” to honor those who died in the protests.

The protests in Kashmir, a region in which its people and infrastructure have been neglected by Islamabad and has been denied autonomy, highlighted the widespread discontent amongst locals. Resentment has galvanized amongst the locals for many years, with the power sector being a central pain point. PoK generates almost 3,500 megawatts of electricity to Pakistan, nearly 10 percent of Pakistan’s installed capacity. However, residents were not offered concessions but instead were required to pay tariffs on the electricity they produced. According to The Diplomat, it costs about 2 Pakistani rupees or approximately 0.0072 U.S. dollars per unit of electricity while PoK residents pay over 30 rupees or 0.11 U.S. dollars per unit of electricity.

The uproar from the protests prompted Pakistani Prime Minister Shehbaz Sharif to call an emergency meeting in Islamabad on the evening of May 13 to address the protesters’ demands. As a result, Prime Minister Sharif approved an 86-million-dollar grant in which parts will be used to subsidize the price of flour and electricity. Following the announcement of the grant, the JAAC called off the protest. The protests coincided with a visit from the International Monetary Fund (IMF) to Pakistan, which had recently warned Islamabad that “social tensions triggered by the high cost of living could weigh on policy implementation, adding that fiscal slippages could present a challenge for the government,” according to Reuters.

Affordable and reliable electricity has been a long-standing challenge in Pakistan since the 1990s. Blackouts and brownouts are frequent, with millions of Pakistanis experiencing partial blackouts daily due to load-shedding: the reduction or cut-off of certain electrical lines when demand becomes greater than supply. Major blackouts have occurred every year since 2013, including a grid failure in January 2023 that left most of the population without electricity. Fueling the lack of access to affordable and reliable electricity is an ongoing energy crisis in Pakistan, caused by a lack of investment, circular debt, an over-reliance on fossil fuels, inefficient energy use, and political instability.

Driving Pakistan’s grid instability is an energy crisis that, in turn, has affected more than just power generation obstacles, but has hampered economic growth and development. Traditionally, Pakistan has relied mostly on fossil fuels, such as oil and natural gas, and has had to rely more on energy imports to generate power. According to the International Energy Agency (IEA), Pakistan’s energy imports have increased 144 percent since 2000. Pakistan’s reliance on imported energy has left it susceptible to energy shocks, including the global shock in energy prices following the Russian invasion of Ukraine in 2021 and supply-chain disruptions from COVID-19. Additionally, Pakistan’s domestic energy production, particularly in the hydropower sector, is heavily reliant on seasonal variations. For instance, hydroelectric generation drops in the winter months, disrupting power generation capacity.

Additionally, the lack of investment in Pakistan’s electricity infrastructure has exacerbated the potential for blackouts because it is not equipped to handle the demand. The grid’s unreliability, coupled with soaring electricity tariffs, government discontent, and a slowing industrial sector, actually created a downward trend in demand. According to Reuters, “Power consumption is a significant economic indicator in the developing economy and the expected decline this year underscores challenges facing the newly elected government in debt-laden Pakistan, amid growing discontent among the poor.”

Despite Pakistan’s economic instability, including in the energy sector, the country has attracted investments from the world’s most powerful countries, with China lending Pakistan 30 billion dollars as part of its Belt and Road Initiative, and the United States, who has seen Pakistan as a regional partner, providing tens of millions of dollars of aid to the country. However, Pakistan has still found itself in financial ruin, desperately seeking a bailout from the IMF. Even if Pakistan receives the 1.1-billion-dollar bailout, what is needed to repair a grid as antiquated as Pakistan’s is much larger.