January 28, 2015:   Pakistan went dark on January 25th because the night before tribal separatists in the southwest (Baluchistan) blew up two power transmission towers. This attack had a major impact on the national energy grid, as it caused a cascading failure of the power distribution network and that quickly took some power plants offline, as they had no way to deliver energy to their customers. Over 80 percent of Pakistan was blacked out, leaving 77 percent of the 182 million Pakistanis without power. While about half the affected areas had power restored in less than a day, it took several days before power was restored everywhere, and situation returns to normal. Blacked out areas included major cities like Lahore, Karachi, and even Pakistan's capital, Islamabad.

Pakistan has had problems maintaining its electrical infrastructure for decades, leading to many small and large scale blackouts even before this record breaking attack. Terrorist violence, however, is not the primary problem here. Circular debt, persistent problems with widespread non-payment of electricity bills, illegal power tapping, and corruption put the utility companies in debt, leaving the state oil company with no credit and the power producers with no capital to fund modernizations of the old grid, or even proper and regular maintenance. Terrorism is just another way to make an already bad situation worse.

Circular debt is an issue that has started to exist in 2006-07, when the international oil prices skyrocketed. This began when the government decided to freeze the electricity prices to avoid passing on this increased oil prices to the consumers in the form of high electricity prices. This was all done to avoid angering the population, which at the time was thought might lead to a major uprising. At the same time the wealthy families that supplied most of the senior government leadership paid more attention to stealing than to avoiding the current financial gridlock that prevents the power crises from being fixed.

It’s mainly a management problem. First there is the high cost to generate power and a law against raising the price to pay for it. This obviously has to be fixed but no politician will risk the unpopularity it will cause. Same attitude with the rampant electricity thievery and the delays in government subsidy payments. Not paying fuel supplier and power plant operators is a favorite way for politicians to steal money. The result freezes the entire electricity supply chain, leaving everyone losing money, in debt, unable to borrow and unable to break the cycle without political leadership that isn’t there.

Despite this dysfunctional government, there are still some countries willing to invest in Pakistan, Baluchistan is also the location of significant cooperative projects with China, biggest of them being expansion of the deep sea port in Gwadar. The plans also include connecting this port to China through road, rail, and fiber optic cables, and in turn making it into a part of a potentially very lucrative trade route, leading from China via Pakistan to the Arabian Sea. But this deal will not work if there is not a reliable supply of electricity. The Chinese keep pointing this out to the Pakistani government but nothing changes. The Chinese are losing patience and many Pakistanis fear that this will not be sufficient incentive to get their rulers to actually rule. Instead misrule survives and thrives.

The Baluchi tribes (not all are in rebellion) are not particularly happy with the Gwadar project, as they see the government reluctant to share any of the financial benefits with them. Worse, large parts of the required labor is being done by men brought in from other parts of the country, or China itself. The violent tactics of the rebellious Baluchi tribes puts any major investments at risk, especially since the Baluchi separatists have staged attacks on Chinese working on the Gwadar project.

There is also an Iran angle to the conflict because Iran borders Baluchistan and has a Baluchi minority on its side of the border that tends to violence because the Baluchi are Sunni, most Iranians are Shia and the Iranian Sunnis feel persecuted (in part because they often are). This has led to violent incidents on the border, especially between Iran's Revolutionary Guard and Pakistan's Frontier Corps. Iran also has a motive to want chaos on the Pakistani side of the border which is just 72 kilometers west from Gwadar. On the Iranian side of the border the Chabahar port is being developed with Indian backing. This port is for providing more affordable (than current truck routes through Pakistan) access to Afghanistan and it's mineral reserves, which factors into the greater India-Pakistan and India-China rivalries.

Pakistanis notice that the lights tend to stay on in Iran, which gives Iran all manner of economic, diplomatic and other advantages. This is not only instructive for Pakistanis but also humiliating. You cannot call yourself a first-rate country if the lights keep going out. --Adam Szczepanik