Regional Cooperation on Energy Issues: Win-Win Situation for all countries

Islamabad, May 22, 2014

Speaking on the occasion of a daylong dialogue on ‘Trans Boundary Cooperation in Energy Sector’ was organized by Sustainable Development Policy Institute (SDPI) in cooperation with CUTS International and FES, India & Pakistan, Khurram Dastagir Khan, Minister of State for Commerce and Textile Industry, Pakistan, said that the government has now realized that for trade and investment, the third pillar is connectivity, i.e. banking, infrastructure, cell phone, energy, etc. Connectivity is paramount in regional integration, as regional cooperation provides opportunities and is a win-win situation for all the countries in the region, the minister said. He hoped that the balance between demand and supply of energy would be achieved in 2-3 years. He said a number of energy projects such as the KASA 1000 are in the pipeline, but these are subject to peace in FATA and Afghanistan region.

On the issue of trade with India, The Minister said the government has changed the traditional stance of trade with neighbours. The Minister informed the audience that TAPI project is in progress and an electricity grid between Pakistan and India is under construction. He said energy trade depends upon diplomatic goodwill. He added that after the recent visit of Prime Minister of Pakistan to Iran connectivity and trade between neighbours will be improved. He stressed on the point that the Government wants to change the impression in future years that ‘SAARC is a least connected region’.

Adil Khattak, Chief of Attock Oil Refineries, mentioned that energy deficit is as much important issue as health and sanitation, which is negatively affecting Pakistan and Afghanistan the most. He said that there is about 2-3 per cent deficit in total GDP of South Asian counties due to energy shortages. Stressing the need for regional trade of energy to leverage the economic growth of the country, he said regional trade will also facilitate the poor to access the cheaper goods.

Bipul Chatterjee, Deputy Executive Director, CUTS International mentioned that there is a dichotomy in the sector i.e. per capita energy consumption is very low and there is wide spread energy poverty but on the other hand, it is also a fact that there are several sources of energy that exists in the region, such as hydro, renewable, gas, nuclear, etc. Thus, the key question to be discussed is why are we unable to tap the sources? Lack of transparent and effective regulatory governance is one of the most important reasons, which the countries would need to address to ensure effective regional cooperation. Mr Chatterjee stressed on the importance of political will to trigger the need to bring about the reforms. He mentioned that unless we address the question that how much is the lack of energy costing our economy and cost of non-cooperation, until then it will be difficult to generate the political will.

Indian Economic and Commercial Counsellor Rajesh Kumar Agnihotri said that energy security is the key issue. It is important for all countries in the region to focus on intra-regional aspects and various factors that need to be taken into consideration, such as need for infrastructure, which will require huge investments, need for harmonisation of regulatory mechanism so as to support the creation of a common market. Dr Vaqar Ahmed, SDPI’s Deputy Executive Director, said business community in the whole region is on the same page and now it’s time to materialize the past dreams. He stressed the need to bridge the gap between the government, civil society, and business community.

Mohsin Khalid, the Executive Director of ITC, said South Asia is undergoing chronic energy shortages especially India, Pakistan and Bangladesh and only Bhutan is the exemption because of low per capita consumption. He stressed the need for private sector’s involvement in multilateral projects. “We don’t have indigenous coal, and it results in bringing up the cost of energy.” He further added that energy is available across the border on cheaper rates but absence of effective connectivity is the biggest hurdle. He said TAPI should not be the immediate goal but the government should ensure ‘ways and means’ to involve businesses in transportation of energy.

He said power grid networks of Bangladesh, India and Pakistan may be used for the energy exchange. He stressed the need for a market based system where multilaterals can play their role.

Various other speakers from Iran, Afghanistan, Kazakhisan, India and Pakistan stressed on the need to exploit non-conventional sources of energy as well as increase in regional connectivity to boost trade and investment in South Asia. Issues such as need for policy harmonisation and building capacity of policymakers, regulators, etc were also discussed. In all, close to 80-90 participants actively participated in the dialogue.

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Udai S Mehta (; Gaurav Shukla (