Business | Opinion
Violence may send negative signals to investors
This week's protests in Pakistan's Balochistan province following the killing of the most prominent tribal elder of the area, do not bode well for the region's prospective gas explorers.
- By Farhan Bokhari, Special to Gulf News
- Published: 00:00 August 30, 2006
This week's protests in Pakistan's Balochistan province following the killing of the most prominent tribal elder of the area, do not bode well for the region's prospective gas explorers.
Balochistan has often been described as Pakistan's singular region rich in gas reserves. Not only is Balochistan home to the largest gas reserves so far discovered in Pakistan, the province, more importantly, stands at the centre of plans by the Pakistani government to transport gas to the country from nearby countries such as Iran or the newly independent central Asian states supplying gas through Afghanistan.
The late Nawab Akbar Khan Bugti, who died on Saturday in an operation carried out by the Pakistani military, had taken it upon himself to become the self appointed advocate for the rights of the Baloch people.
He opposed plans by the government of pro-US leader General Pervez Musharraf to back new ventures in his province, ranging from deployment of military troops at newly-created military cantonments to development of new facilities for prospective foreign investors.
Many Pakistanis may well have lamented Bugti's style of politics. He was reputed to run his own justice system in parallel to the government, with provisions ranging from sentencing of individuals to private prisons where they were jailed.
In the immediate aftermath of Bugti's death, there is widespread violence from protesters across Balochistan. It is clear that the government of General Musharraf has obviously underestimated the political fallout. Warnings of a long war have been delivered publicly by some of Balochistan's leading political leaders, which must be disconcerting for prospective investors.
There can just be no enduring peace and settlement in Balochistan as things appear to look for the foreseeable future. Consequently, the idea of attracting investors to take long-term stakes in the range appears as faulty as ever.
The Pakistani government's promise to oversee billions of dollars flow in to new investments in Balochistan which would lead to a sharp rise in the volume of gas supplied, appears doomed to fail for now. In brief, the promise of taking Pakistan towards a new era of prosperity, thanks to the prospective gas projects, is one that probably went down the tube when Bugti's mountainous hideout in a remote area was attacked.
The delay in undertaking new gas projects of course only promise to cause a huge setback to Pakistan's economic interests. In the past few years, Pakistan's foreign lenders have urged the south Asian country to take steps towards arranging new sources of gas supply as the country's existing gas reserves, by some estimates, could run out in the next two to three years.
Not too long ago, Pakistan tasted the experience of gas shortages when some of Bugti's followers allegedly destroyed a portion of the gas pipeline running from Balochistan to elsewhere in the country. They could not have chosen a more opportune time, right at the peak of the winter months, when gas shortages truly hit domestic consumers, and the significance of Balochistan to Pakistan's overall comfort level was adequately highlighted.
With a new round of mayhem in Balochistan following Bugti's death, its impossible to predict the extent to which Pakistani authorities would successfully meet the challenge of keeping the existing pipelines secured from the province.
But even if they succeed in meeting that challenge, the next challenge of overseeing large new investments flow to the region, chasing new opportunities for gas exploration, is likely to remain a distant dream.
Ultimately, Pakistan's pro-US rulers have to reconcile themselves to a fundamentally vital reality. But political mistakes of the kind made with Bugti's death is bound to unleash not just political but also economic consequences.
The writer is a journalist based in Pakistan.
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