IRAN PAKISTAN GAS PIPELINE - AN END TO PAKISTAN'S DEBT CYCLE

Abstract

Iran Pakistan Gas Pipeline has been long-delayed project, initiated to meet Pakistan’s natural gas demand and over all a pipeline for peace and prosperity for both the completed its part of the pipeline, however Pakistan countries. Iran never moved a single stone citing American pressure and possible threat ofsanctions. Thus, in order to fulfill gas requirements, Pakistan opted to procure expensive LNG (Liquified Natural Gas) that substantially increased Pakistan s import bills, eroded forex reserves, increased domestic circular debt and raised the urge to seek more debt over the years. This study focuses on analyzing the consequences of foregoing IP Gas Pipeline and Pakistan’s increasing dependence on LNG. Moreover, this study critically analyzes the claims put forward by some officials and analysts regarding U.S.. sanctions on IP Gas Pipeline project. Moreover, the economic viability and potential of Iran Pakistan Gas Pipeline helping Pakistan get out of vicious circle ofDebt are also discussed. The research design opted in this study is qualitative grounded theory with an inductive approach having explanatory research type. The data has been gathered through observations, archival review/ documental study, case studies and qualitative audit reports from various sources including governmental and non-governmental agencies, independent research institutions, press statements ofkey stakeholders and media reports. The findings conclude that LNG is an expensive resource and is going to be further expensive due to rise in demand by the European Countries. The LNG procured has proved to be detrimental for Pakistan’s economy, in terms ofinflating circular debt and erosion offoreign currency reserves. Hence, the country stands at the brink of default. The research further explains that Iran Pakistan Gas Pipeline not only saves multiple billion dollars but would also help eliminating the problem of circular debt and could make Pakistan more self-reliant economically & sovereign geo-politically.