August 16, 2009

Conversation with Professor Nisar Ali

Filed under: Conversation,Economics,J&K — loggers @ 3:53 pm

Nisar Ali:

Chief coordinator, Post Graduate Centers, University of Kashmir

-Member of State Finance Commission

Professor Ali met with us for tea on a houseboat, where he discussed the economic history of Kashmir, as well as crises facing the region today. 2 important topics were inter-sectoral labour mobility and Kashmir’s inability to effectively tap its water resources for hydro-power.

Push Factors in the Labour Market:

Labour is divided into the primary, secondary and tertiary (services) sectors. Ali applied theories in conflict economics to show that push factors are leading the market towards crisis. Under healthy economic growth, labour generally transitions from the primary sector à secondary sector à services sector. However, Kashmir’s secondary sector has remained stagnant since the 1950s due to a lack of private investment (article 370 and political instability has limited Indian/foreign businesses from coming in). This results in labour getting pushed back from the secondary sector to the primary sector, which is already saturated with employment. Unemployment rises, workers lose bargaining power, wages fall, consumption decreases, prices suffer and so on.

Ali explained that if this first stage of crisis is not effectively addressed, the service sector will also fail to develop. This would result in a second push of labour from the services sector to the primary and secondary sectors. Ali refers to this second stage as explosive crisis, or “the point of no return.”


Human capital and natural resources are abundant in Kashmir, but have not yet been tapped to reach a fraction of the region’s economic potential. There is enough Gypsum to supply all of Asia for 150 years. There is potential to generate 20,000MW of hydropower, enough to power the region and sell surplus to other countries for hefty returns. However, articles such as the 1960 Indus Waters Treaty are preventing such development from taking place. Under this international law, 6 river basins are divided between India and Pakistan. India was given rights over the Ravi, Beas and Satlug rivers (all run through Punjab), and Pakistan was given rights to the Chenab, Jhelum and Indus (all run through J&K). India has to seek Pakistani clearance for any infrastructural project involving the J&K rivers, and as a result, dams cannot be created to generate even 10% of the region’s potential in hydropower. A state that should be selling surplus power to neighboring regions is plagued by electricity shortages throughout the year.

The Rangarajan committee recommendations, if implemented, will end the Kashmir crisis. The Kashmir crisis stems from the power issue. –Professor Nisar Ali

A message to investors from Nisar Ali:


1 Comment »

  1. the video shown in the article is not the video of f=prof nisar ali

    Comment by javaidmir — October 1, 2009 @ 12:41 am | Reply

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