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Is terrorism the real threat to Pakistan?

It has been a bloody few weeks in Pakistan, even by the country’s violent standards. Sectarian extremists assaulted an open-air market. Separatist militants executed bus passengers. Terrorists bombed a children’s soccer game and a policeman’s funeral. A deadly jailbreak freed more than 200 militants. And the nation’s capital went on lockdown after rumors of impending high-profile attacks.
This unrelenting terror makes all the more striking a recent statement by Khawaja Asif, Pakistan’s water and power minister. Energy, he declared in an interview, is a greater challenge than terrorism. Asif’s statement is striking — and spot-on. Militancy grabs headlines internationally, and it’s undoubtedly of grave concern. But Pakistan’s energy crisis directly affects many more people than the Taleban. More than anything else a lack of power is destabilizing Pakistan. Pakistanis suffer as much as 20 hours of daily power outages. Energy shortfalls have exceeded 40 percent of national demand and cost the country four percent of gross domestic product. Hundreds of factories, including those in the dominant textile industry, have shut down, leaving scores unemployed. Doctors report the crisis is increasing stress and depression.
The root cause of Pakistan’s power crisis is a dysfunctional energy sector that even Asif, the power minister, admits is a “nightmare”. The sector is burdened by so much debt that Pakistan literally can’t afford to provide energy. Pakistan’s new government has made energy its top priority, and proposed a new national policy. It calls for emphasizing cheaper, unexploited indigenous reserves. These include coal in Thar in Sindh. Islamabad’s plans to expand generation capacity by building more dams could drive up tensions between Pakistan’s fractious provinces.
This all has troubling implications for the US, which has a strategic interest in a stable Pakistan. More unrest heightens the operational challenges of the US withdrawal from Afghanistan, which requires the use of Pakistani supply routes.
President Barack Obama’s administration should work with Pakistan to establish a more welcoming environment for American energy investors and entrepreneurs. A bilateral investment treaty, now under negotiation, would be an excellent start. Finally, Washington should encourage more Pakistan-India energy cooperation.