PAKISTAN faces serious economic challenges nowadays. Data from the State Bank of Pakistan (SBP) shows foreign exchange reserves having plunged to abysmally low levels. The government is restricting imports to control the outflow, which is only exacerbating the matter as more than 70 per cent of the import relates to energy and raw material; two areas that are essential to keep the economy running.

We can get out of the chronic balance of payment crisis by exploiting local resources. Pakistan has massive coal reserves in Thar. We can and should use coal to generate electricity rather than depending on expensive regasified liquefied natural gas (RLNG) and furnace oil. This will significantly save the foreign reserves and also ensure energy security by reducing dependence on imported fuel.

Moreover, Pakistan has accumulated circular debt of about $2.5 trillion by using expensive fuel for electricity generation. Thar coal will diversify the energy mix and help us reduce overall electricity cost. According to the National Transmission and Despatch Company (NTDC), power production cost based on Thar coal is only 3.39 per unit, which is almost 10 times less than the average electricity production cost.

Therefore, instead of trying to quickly build the reserves by borrowing from global multilateral institutions and friendly countries, our policymakers ought to fix the real bottlenecks that are preventing us from attaining sustainable and long-term development.

Salman Ahmed Ansari
Tando Adam

Published in Dawn, March 3rd, 2023