Azad Jammu and Kashmir: Powering Pakistan, Overlooked by the World

When the global media reports on Kashmir, they invariably take a path whereby the central theme relates to conflict, geopolitics, or diplomacy. However, the economic and social aspects of Azad Jammu and Kashmir (AJK), the segment administered by Pakistan, rarely factor into this calculus. And from understanding Pakistan to bolster AJK’s unnecessary role as a passive or dependent region, it is AJK that is an engine of national stability, supporting the energy (the national grid), supporting the economy, and demonstrating resilience that international audiences do not see.

Electricity is the best example. Today, Pakistan produces about 46,000 megawatts of total power. AJK generates close to 3,000 megawatts of this total, or about 29 percent of the national total. Only Khyber Pakhtunkhwa generates more, at a smidge over half the total. Meanwhile, Punjab, Sindh, and Balochistan, with much larger populations and industrial bases, produce smaller shares. The picture is clear: AJK is not an afterthought to the energy calculus in Pakistan; it is a fundamental and necessary producer supporting the national grid.

Hydropower is the backbone of this contribution. With more than 28,000 MW of hydel capacity in the country, a significant portion of this is generated through rivers and dams in AJK, offering clean, renewable energy at a time when climate change has prompted governments to reassess their reliance on fossil fuels. For Pakistan, its reliance on AJK’s water resources is not just electricity; it is national resilience, counteracting reliance upon imported oil and gas, reducing the current account trade deficit, and isolating the millions who rely on district or sub-district fuel markets from the global rise and volatility in fuel prices. In other words, AJK is a critical part of Pakistan’s energy security and a national sovereignty issue.

However, this contribution does not always translate into recognition. Many in AJK have reason to believe that, despite being one of the most significant contributors to electricity generation, the region is not always recognized for sharing in those accolades or their benefits. If AJK accounts for 28.5% of the national grid, why is it still framed internationally as a marginal or dependent territory? How are AJK’s contributions to clean energy generation not directly considered when evaluating the political sensitivities surrounding the region? The distance between perception and reality of the area remains great.

Electricity tariffs indicate part of the story. Consumers in AJK pay much lower tariffs for electricity than consumers on the mainland. For domestic consumers, the cost per unit for consumers using 200 units or less ranges between PKR 17.95 and 23.67. In places like Lahore or Islamabad, those tariffs rise to levels approaching PKR 31.2. Places in Karachi with K-Electric charge up to 36.3 PKR for higher brackets. Although some refer to the public’s low tariffs as “subsidy,” it is simply a fair gesture: no region providing energy for Pakistan should pay the same inflated rates as an energy consumer reliant on the area.

For residents, it is not a handout; it is justice. However, there remains international indifference. AJK’s existence is usually eclipsed by conflict in global discourse. Who, outside Pakistan, will consider AJK an energy-productive region that yields better poverty indices compared to Pakistan’s larger provinces?  Regarding employment rates, AJK has a close to 22% unemployment rate compared to Balochistan’s 71% unemployment rate and Sindh’s 43%. Households maintain a constant income flow through remittances from their active diaspora network and social cohesion, which ideally promotes investing in education, housing, and small businesses. These factors explain why literacy rates in AJK are among the highest in Pakistan, and why its communities demonstrate resilience despite limited land and industrial bases.

Comparisons across the vertical axis of Pakistan hold up this point. Agriculture and industry fall in the hands of Punjab and Sindh, who argue over resources, wealth inequality, and a growing list of fiscal leakages. KP has remittances flowing into the economy from the Sunni diaspora in the Middle East, North America, and the EU. Still, it also has a fresh wave of terrorist activity and security instability. Balochistan has abundant and extractable resources, but it remains the most underdeveloped and economically insignificant province of Pakistan, as reflected in its GDP figures. The fact that lentils are a key part of AJK’s economy is developing, even if it is slowly. Unlike the other provinces, AJK becomes a carefully orchestrated and model society, not as a welfare dependency but as something that maintains the balance of power: high inflow of remittances from the overseas diaspora, a reasonable contribution from hydropower generation, overall better fiscal prudence, and a lower incidence of poverty than much larger and more political regions and groups.

The challenge is to ensure that this model of contribution is only matched by development activity and investment, fiscal accountability, and follow-up. Royalties from large-scale hydropower projects could be reinvested and accounted for transparently in local schools, wellness and healthcare, and community living and development infrastructure improvements for rural regions. As AJK expands its grid infrastructure, this too will help to reduce line losses and provide a more consistent service to regional households. Pension plans in the diaspora could be investing remittance streams into productive systems, and we have already initiated one of the only greenfield small hydel plants and are organizing its ownership. Eco-tourism could exploit the burgeoning narratives of AJK being positioned as a clean energy hub to target both domestic and international eco-tourists.

For Pakistan, valuing and recognizing AJK is not symbolic but strategic. There is already a precedent for valuing AJK as a partner in national energy security. Islamabad has even absorbed the worst of the national tariff shock from AJK households. However, we can now take it to the next level and have AJK globally recognized. With renewable energy and climate resilience seemingly at the forefront of the policy agenda, we aim for AJK to be recognized internationally. AJK must stop being referred to as an under-valued frontier and be recognized for providing energy for millions of homes and contributing to Pakistan’s economic survival.

Pakistanis understand this well. For us, Azad Jammu and Kashmir is not a far corner of our territory; it is a critical heartland of hydropower, remittances, and resilience. AJK is a living example of the potential of smaller economies to contribute to national stability in what might be seen as an uncharted territory – what is left is for discussion in the international community to catch up with AJK….to see AJK through not only a geo-political lens but as an energy hub, a remittance engine, and as a shining example of community resilience.

In a fractured world, recognition matters. AJK’s story deserves to be told not as a footnote but as a headline: a region powering Pakistan, stabilizing its economy, and standing as a reminder that resilience often comes from the places the world overlooks.