Pakistan undergoes excruciating power shortages, causing 18-hour blackouts in rural areas and 6 to 10- hour load-shedding in cities. Although Pakistan has made substantial investments in power generation and distribution through IPPs, in January 2023, the country suffered a breakdown in the national grid. Another blackout occurred in October 2022. According to the World Bank, an unreliable supply of electricity is “a significant barrier to economic growth.” One recent study found that business profitability in developing countries may be reduced by up to almost 40 percent by power crises.
On April 22, Iranian President Ebrahim Raisi visited Pakistan and a few days later, he died in a helicopter crash on May 19, 2024. During his visit, his likely top priority issue probably wasn’t Hamas or the Houthis, but rather a pipeline. The Iran- Pakistan natural gas pipeline (IPGP) was conceived in 1950. In 2010, despite U.S. opposition, the two countries concluded a 25-year Gas Sale and Purchase Agreement and began constructing the 2,775 km pipeline from Asaluyeh, Iran, to Multan, Pakistan. The initial cost estimate was $7.5 billion. In August 2023, Pakistan announced that it was suspending the project under threat of U.S. sanctions.
Endless LoopIran precluded Pakistan’s attempts to get out of its agreement but granted a 10-year extension, and both sides got to work on a way forward. The Iran-Pakistan natural gas pipeline was already behind schedule (Iran had completed its leg of the pipeline) and Pakistan was facing a heavy penalty at the time the Americans intervened. In February 2024, Pakistan approved the first phase of........