The challenges ahead

The writer is Distinguished Professor of Economics, Forman Christian College University and Beaconhouse National University

For the first time in Pakistan’s history, an elected government has been removed subsequent to a Supreme Court judgment. This indicates the power of an independent judiciary that is vital for a democratic structure. At the same time, the possibility of the next government meeting a similar fate could accentuate the present political turmoil and thereby undermine the very democratic edifice that the judiciary by its assertion of independence, seeks to strengthen. Let us outline the challenges ahead in addressing which key organs of the state have a role to play: the government, the military, the judiciary and parliament.

The first challenge is to end power outages, which are sparking riots, weakening industry and accentuating the unemployment problem. The core of the power crisis lies in three facts: (a) As much as 82 per cent of total electricity production is now oil-based when oil prices are astronomically rising. By contrast, a decade ago, only 50 per cent of electricity output was fuel-based with the remaining 50 per cent coming from much cheaper hydroelectric power. Consequently, the average cost of electricity has become so high that the government simply does not have the fiscal capacity to provide the subsidy necessary to supply electricity at a price which most consumers can afford. Indeed, increasing oil-based electricity would involve doubling the price of the additional supply. (b) A related problem is billions of rupees of unpaid electricity bills by the provincial governments, semi-autonomous corporations and federal government departments. The recovery of this shortfall prevents the government from paying its dues to the independent power producers who are then forced to cut back production. (c) Institutional weakness combined with obsolete transmission technology results in theft and transmission losses amounting to 30 per cent of the total electricity generated. The long-term solution is to invest in hydroelectric power. In the short-term, apart from improving recoveries, an annual foreign aid of about five billion dollars may be required for the next five years to achieve full capacity utilisation and supply electricity at an affordable price. This means shifting our policy of confrontation with the West to cooperation.

The second challenge is to pull the economy out of recession onto a path of sustained high growth. This means, apart from institutional change, shifting focus away from reducing the budget deficit through economic contraction to stimulating the economy: increased expenditures on physical infrastructure, health, education and training; and public-private partnerships for stimulating small scale enterprises and small farm sectors that could generate employment. This requires changing the composition of government expenditure from non-productive to productive expenditure.

The third challenge is to manage widespread violence and establish order. For this, the government needs to formulate a strategy to combat the al Qaeda and Taliban affiliates, who threaten both Pakistan and Afghanistan. At the same time, the recurrent spasms of violence in Karachi by armed criminal gangs aligned with various political parties and extremist ethnic organisations must be brought to an end.

The fourth challenge is to end a colonial policy towards Balochistan: stop ‘forced disappearances’, abductions, torture and murder of Baloch nationalists and bring them into mainstream Pakistani politics as equal citizens.

These are challenges that must be addressed if Pakistan is to survive and prosper. In this great endeavour, the various organs of the state will have to cooperate and establish a semblance of political stability.  Early elections are now necessary. For this, political parties need to agree on an interim government, the Supreme Court needs to exercise judicious restraint to prevent an unravelling of the very political order within which justice is dispensed and the military must persist in its wisdom of refraining from a disastrous coup d’état.

Published in The Express Tribune, 25^th, 2012.