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Solar-powered street lights in Pakistan
Solar-powered street lights in Pakistan
Daniel-Dylan Böhmer

Using the power of light to combat the dark ideology of the Taliban. It sounds like the start of a bad movie, but that is exactly what Shahbaz Sharif, chief minister of the Pakistani province of Punjab, intends to do.

“More jobs will mean fewer extremists because we can give people a better chance in life,” says Sharif, who is also the brother of Pakistani Prime Minister Nawaz Sharif.

At the heart of his development plans is a major solar power plant. Nearly 5,000 hectares (12,355 acres) in the south of Punjab, Pakistan’s most prosperous and stable region, have been earmarked for the project. The plant could provide around 700 megawatts of energy. Sharif is now asking for support from the Pakistan German Business Forum in Berlin. “We have the sun, you have the technology. Let’s work together.”

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Shahbaz Sharif

Nawaz Sharif’s new Pakistani government, in which his brother Shahbaz is one of the most influential figures, is particularly focused on the economy. Sharif’s party, the PML-N, has its roots in Punjabi industrialists and landowners, and it is providing clear incentives to entice investors into the country. In some industries, including the energy sector, foreign companies are exempt from taxes for the first 10 years.

A question of survival

Pakistan is an incredibly poor country. According to the IMF, average annual income is $3,056, which places it at No. 141 of 188 nations. But the tax breaks for foreign companies are a sacrifice to the country’s own interests. For Pakistan, developing a reliable energy supply is a question of survival.

Pakistan requires around 13,000 megawatts of energy but only produces 7,000. Even the largest and most developed cities sometimes go without electricity for 18 hours within a two-day period. The previous government’s inability to solve the energy problem was one of the main reasons for its election defeat.

Energy is a divisive issue in a country where most do not have access to it — while the political elite who live in air-conditioned houses with home entertainment systems do not have to pay for it. It could be one of the factors that allow the Taliban to gain a foothold in Pakistan, a country with nuclear weapons and 200 million inhabitants. But this population also shows signs of promise. Some 65% of Pakistanis are under 30, and 88 million of them can speak English. A new middle-class is developing and could represent an important market, especially when it comes to electricity.

“Pakistan needs to catch up,” says Günter Zwickl, CEO of Siemens Pakistan. “As a company we have the technical answers to the challenges in the energy sector, but at the moment it is very difficult to finance projects on this scale as many banks still class Pakistan as a risky country. There are no major problems with securing up to a few million euros, but after that point, banks demand higher interest rates because of the risks.”

Even though the security situation in Pakistan remains tense and has an impact on the economy and investment, Zwickl claims that Siemens’ daily business remains unaffected. It is only a few regions and cities that distort the view of the entire country, he says.

Employment is key

Siemens has been active in this part of the world since 1922, and now its four main focuses are energy, infrastructure, industry and health technology. The company employs 1,500 people locally and produces transformers as well as low- and middle-voltage appliances. “We’re generally satisfied with our business in Pakistan. The biggest challenge for the new government is creating even better conditions for new investment,” says Zwickl.

Security is at the top of the agenda. The government announced peace talks with the Taliban, but negotiations were put off when a U.S. drone killed the leader of the Pakistani branch, Hakimullah Mehsud. It is likely that the next few months will see increased violence, which would delay a political solution. In any case, the problem of terrorism can only be solved when militants are reintegrated into society — and that requires jobs.

Economic factors play an important role in radicalization. The Taliban often recruits former students at Koran schools, and it is mostly poorer families who send their children to a madrasa, where they are provided with free food and accommodation. It is estimated that the Pakistani Taliban pays its militants between 300 and 400 euros a month — which is a significant motivation in a country where a policeman earns on average 140 euros a month.

But there are promising signs. During the last two free elections in Pakistan, Islamist parties did not even win 10% of the vote. Further economic development could bring lasting change to the country. But first it needs power.

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