Government Intervention and its Spillover Effects

One of my cousins works as a Chief Executive Engineer for Pakistan's Water and Power Development Authority (WAPDA). He is now serving in Gilgit-Baltistan (GB). He has sent a proposal to the Planning and Development Ministry of Pakistan. He told me about political and bureaucratic red tape in Pakistan. I want to provide the reader with some background. 

My cousin is a dedicated person. He wants to improve the lives of the underprivileged people of Gilgit-Baltistan. Owing to the lack of self-determination, GB is an impoverished region in Pakistan. The area has a wealth of natural resources, and this ecology provides the majority of livelihoods. People depend on mining, tourism, fishing, agriculture, fruit, and handicrafts for their livelihood. These industries are the source of income for the majority of the population. 

People depend on the government for jobs, education, transportation, and health. The territory lacks self-determination and has top-down decision-making. It does not collect taxes and relies on federal funding, subsidies, and grants. In comparison to Pakistan, the area has a low level of corruption.

Gilgit-Baltistan has a hydropower potential of 40,000 MW. It currently only generates 133 MW. This lack of energy is a pressing issue for the 1.8 million residents of the area. Generally, Pakistan is facing an electricity crisis and relies on imported fuels to meet its energy needs, which consume a significant part of the country's GDP. GB's hydropower potential will address Pakistan's energy needs and strengthen the country’s foreign exchange reserves. GB’s lack of self-determination and bureaucratic red tape are constraints. There are 278 potential project sites in the Gilgit-Baltistan area. They can increase the total installed capacity by 21,125 MW. 

The federal government of Pakistan provides funds. The GB government does not collect taxes or generate revenue. The government of GB has to get approval from the federal government for even a minor project. Political tussles between different parties in power at the center and local levels make the situation worse for GB. Development projects take several months or even years. The GB government faces hurdles while getting consent from the Planning and Development Department and the Ministry of Kashmir Affairs. The project fails or stagnates when a politician or bureaucracy does not get a piece of the pie.

My cousin visited officials from various ministries in Islamabad. He discussed his proposition with the federal government. He has been working on this proposition for a long time and spoke about it during his meetings. He is a competent individual. He installed smart energy meters in GB, where most people do not pay their power bills. The installation helped the Water and Power department track electrical expenses. The department now generates most of the income for the GB government. 

He informed me about the bureaucratic hurdles he faced during his visit to Islamabad. He identified several potential hydropower sites in the GB. All he needed was approval to establish contact with international companies. He aims to export electricity to China. He estimated that the initiative would be profitable for the people of GB, as each household would receive Rs. 3 lac per month in compensation. 

The interests of the ruling parties and bureaucracy cause a majority of initiatives to stall. The federally controlled Water and Power Department wants to maintain its monopoly. It does not allow the private sector to compete. The National Electric Power Regulatory Authority (NEPRA) is Pakistan's primary power service provider. It has a monopoly on the construction of infrastructure for electricity distribution. This monopoly makes it challenging for other businesses to enter the market. The GB government needs to establish infrastructure to export energy to China. NEPRA and WPD's entrenched interests hinder the GB government. They bar the GB government from entering into open contracts to develop infrastructure.  

Widespread corruption has caused the dysfunctionality of almost every public sector in the country. Due to the lax rule of law, politicians and bureaucrats misuse public funds and power for their own gain. 

Lacking the ability to make choices and manage their affairs, Gilgit-Baltistan faces challenges in launching public welfare projects. The political wrangling and corruption within the government of Pakistan make things much worse. The ad hoc government in GB follows decisions from the center and the army, and does not represent people's concerns. The lack of self-determination and individual rights has been a persistent issue since the region gained independence in 1947. The political and administrative hurdles have arrested the development of GB. Some competent individuals wish to bring about change. Power struggles between the civilian administration and the army have hampered Pakistan's growth.