Opportunity on western border

The bitterness between Pakistan and Afghanistan can be traced back to the latter opposing the resolution for Pakistan’s UN membership in September 1947. They asserted that the region now called Khyber Pakhtunkhwa (K-P) should have been given the choice of independence too in the referendum of July 1947 in addition to joining India or Pakistan.

Since then, Afghan governments have continued to pitch their ethnic identification with K-P as a political weapon. However, there was expectation in Pakistan that once the Taliban are ensconced in Kabul, the challenge would subside. Contrary to that, the terror incidents in Pakistan, with traceability to Afghanistan, have increased manifold since the new rulers took over Kabul in August 2021.

This becomes more critical when Reko Diq’s revival has just started and CPEC is entering its consolidation phase. History tells us that longterm relations between any two nations only survive if they have strong economic ties. That is why since the end of Second World War, we observe a mushrooming of global and regional economic alliances such as the EU, Asean, GCC, Mercosur, African Union, ECO (earlier RCD), SCO, G-20, BRICS, etc.

Some of them have proven to be highly successful, eg intratrade in the EU and Asean is 67% and 25% respectively, even that of the African Union is 12%, however, the same for Saarc, due to Indo-Pak friction, is only 5%. Among its neighbours, Pakistan has a strong economic bond with China only. As to others, our trade with Iran hovers barely at $600 million despite the shared border of 959 km. It was the first country to recognise us and openly stood by us in the wars of 65 and 71.

However, even when it went through rapid development at an annual rate of 9.8% from 1964 to 1976, Pakistan failed to take any advantage despite the available vehicle of Regional Cooperation for Development (RCD). Our annual growth during 1960-70 remained only at 6.7% and exports could not even touch $1 billion per year by 1970, while those of Israel stood at $1.3 billion (current level: $115 billion). In 1971, despite our close alignment with the West through Seato and Cento, we ended up losing half of our country.

While a robust selfsufficient economy, a well-engaged public and a sustainable security system were the basic essentials to maintain independence before the fall, they were all missing. The post-1971 challenges again required a lot of sagacity, but we soon were facing a major insurgency in Balochistan and increased estrangement with Afghanistan. While we kept on hearing a lot about security challenges, energy security was never a priority. For instance, the IP contract signed in 2012 for import of 1bcfd of gas from Iran is yet to even take off.

We keep on hearing about it falling under the ambit of the US sanctions, however, we never attempted to engage the US directly or through its allies or utilise the window which became available after the post-nuclear (5+1) deal of July 2015 till Trump’s withdrawal in May 2018. Also, if the Chabahar Port of Iran and its associated development by India and oil imports by eight countries could secure an exception from the sanctions, then we also could try. The given details along with the fast emerging security challenge on our western front need to be taken highly seriously.

Opportunities in energy sector and mining

Afghanistan has at least $1-3 trillion of mineral resources including iron ore, marble, copper, gold, lead, zinc, rare minerals, etc. It is also a major source of gemstones and 45% of its exports in 2019 comprised rare metals, gems and jewellery. Additionally, it is called “the Saudi Arabia of lithium”, due to the huge reserves of the same.

The deposits along with similar reserves in K-P and Balochistan offer an excellent opportunity to develop integrated minerals’ processing value chains in the region to secure operational synergies. It also harbours 2.1 billion barrels of recoverable oil and 16 tcf of natural gas. Pakistan can offer their development, thus, making Afghanistan energy self-sufficient. This would automatically give birth to other associated industries such as petrochemicals.

Major cause of current crisis

The above plethora of opportunities, if realized, can transform the entire region. However, the transformation needs professionals equipped with the required knowledge and versatile skills set to lead and manage it. Unfortunately, Pakistan is in the stranglehold of bureaucrats since inception – a tier majorly deficient in the above credentials.

In view of the same and the given complex challenges, I am an ardent supporter of the introduction of a professional tier in the ministries at the top. The capacity gaps of the current dispensation in this era of knowledge-based economies are so obvious. The most recent example is the hullabaloo we heard about the performance recognition certificates distributed in February by the earlier PM to the ministries, but nobody talked about the flaws in the selected targets.

A quick review of the current performance targets of the Petroleum Division tells us that even circular debt and oil and gas reserves’ replacement are not there in the list, while North-South pipeline is still in the feasibility stage. The list mentions some ongoing performance evaluations, but it is silent about the yardstick. Similarly, the LNG terminals are altogether missing, and while the setting up of a high performance technical group is a target, we don’t see its signs yet.

Even if an attempt is made, then professionals would generally avoid becoming a part, because it would entail reporting to bureaucrats and getting along with their suffocating capacity deficiencies. Until this fundamental flaw in the governance structure is addressed, the country would continue to struggle. It’s not the processes or policies we are so fond of routinely tweaking with, rather professionalisation at the top for “effective prioritisation and execution” is what we actually need.

What is to be done?

Comprehensive negotiations need to be held with Afghanistan in the above backdrop. The initiative can only succeed if handled by professionals, otherwise it would also meet the same fate as the $20 billion MoUs with Saudi Arabia signed in February 2019 and the subsequent visit of the Saudi delegation from September 4-6, 2019.

THE WRITER IS A PETROLEUM ENGINEER AND AN OIL AND GAS MANAGEMENT PROFESSIONAL