Causality between Energy Consumption and Economic Development (original) (raw)
Energy is the life line of any economy. The blood that courses through its veins be it an agrarian economy or a modernized industrial one. Same is the case with case with the Pakistani Economy where it plays a crucial role in socio-economic development. With the passage of time as rapid development and technological innovation has taken place the utilization of energy resources has also mounted. Therefore, demand for energy has increased instantaneously with time while resources have been squeezed in an already struggling third world economy. Today, more than 30% of the Pakistani populace has no excess to electricity and about 80% haven't got any access to gas. Pakistan ranks 165th out of 218 countries in per capita access to electricity. 2 Pakistan is currently facing energy crisis due to the gap between energy demand and supply. This crisis limits the growth in the economy directly via resource constraint channel and indirectly by as the shortage of energy creates unrest and agitation in the society that leads to closing down of already established production units and reduces the charm for the creation of new ones. This situation is caused due to a combination of factors such as political bankruptcy, lack of farsightedness, an absence of institutional capacity, poor planning, mismanagement and discrepancies in governance.
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