A Greater Kashmir Development Authority

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By Michael Krepon and Neetu Mahil – The ultimate nuclear risk reduction measure between India and Pakistan would be a settlement of the Kashmir dispute. The Government of India has stated that maps cannot be redrawn in South Asia. The Government of Pakistan has stated that the status quo is unacceptable. One way to proceed toward a settlement would be to accept both positions and devise a new regional body that would overlay the current map of a divided Kashmir. A Greater Kashmir Development Authority might deal with power generation, trade, tourism,pilgrimages, deforestation and other topics. To succeed, a regional development body would have to steer clear of questions pertaining to sovereignty, national defense, and foreign relations.

An ambitious proposal to proceed with a cross-border regional development authority for Kashmir can only happen with local ownership; a “made in the USA” proposal is bound to be opposed strenuously in India and would become a target of anti-American sentiment in Pakistan. Islamabad and Delhi, as well as local political leaders, will make their own determination on whether the possible strengths and likely pitfalls of a regional development plan make it worthy of sustained pursuit. Besides, the Obama administration has more than enough domestic and foreign problems to tackle without adding Kashmir to its “to do” list.

While historical analogies must be treated with considerable caution, one that nonetheless comes to mind is the Tennessee Valley Authority (TVA), which was superimposed over several U.S. States to generate much-needed electricity and employment during a time of great economic deprivation. The creation of a Greater Kashmir Development Authority would be a far more challenging undertaking than the TVA. To better understand the potential benefits of a regional development authority as well as potential pitfalls, a summary of the history, accomplishments andgoverning procedures of theTVA are provided below.

During the Great Depression, President Franklin Delano Roosevelt created the TVA in an area encompassing parts of Kentucky, Georgia, Mississippi, Virginia, Tennessee and North Carolina. Within this area per capita income was 44 percent of the national average, and just eight percent of farmers had radios, four percent had telephones, two percent had reliable access to electricity, and only one percent had indoor plumbing. The TVA was empowered to build dams to control flooding and harness hydroelectric power from the Tennessee River System. To this end, it was given the power of eminent domain over land deemed essential to the TVA’s mission. The region covered by the TVA spans 41,000 square miles.

The early years of the TVA transformed the Tennessee Valley region, as real incomes grew, businesses enjoyed low energy costs, and enormous infrastructure projects employed thousands. Yet, many argue that the economic stimulus created by the TVA may not warrant the costs.

By 1945 the TVA had built 21 dams, creating fourteen million acre-feet of flood storage and a 650-mile long navigation channel. Within 20 years of TVA’s establishment, per capita income in the region increased by 38 percent. The TVA also helped to eradicate malaria from this region by 1953– a significant feat considering that only 20 years before, 30 percent of the population had been affected by this disease. By 2008 the TVA was serving 8.8 million people, earning $10 billion in revenues, and generating more than 156 billion kilowatt-hours of electricity each year.

The TVA was established as a U.S. government-owned corporation. It was initially run by a three-member board, appointed by the President and confirmed by the Senate for nine-year, renewable terms. In 1972, the U.S. Congress passed legislation to increase the oversight and input of participating States. This legislation allowed Governors of each State in the TVA’s jurisdiction to nominate an individual to serve on a 20-member Council. Other members were appointed by the TVA. In 2004, the U.S. Congress voted to restructure the TVA’s board to increase its accountability, creating a nine-member, part-time board appointed for five-year terms.

President Roosevelt referred to the TVA as “a corporation clothed with the power of government but possessed of the flexibility of a private enterprise.” This model requires strong oversight to prevent abuses of power, corruption and environmental protection. Another concern raised by the TVA model is that, because it enjoys a monopoly on power generation in the region, it has crowded out private investment. The TVA was initially funded entirely by Federal appropriations. Since 1959, it has been self-financed through revenue generation and by borrowing. Oversight is needed here, as well: the TVA has now amassed significant debt.

The TVA model is unlikely to be successfully adapted for use elsewhere unless its governance structure meets national, regional, and local needs. Strong oversight would be required to prevent abuses, and financing arrangements must be adequate to tasks that lend themselves to partnership arrangements.

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