Analysis: Energy crisis - Conferences are no substitute for courage

Unless the government seriously reforms the entire power sector, the country will effectively shut down completely.


Farooq Tirmizi October 02, 2011

KARACHI:


Naveed Qamar needs to stay quiet today. And Hafeez Shaikh needs to scream at the top of his lungs.


The finance minister is ordinarily an impeccably polite, mild-mannered man but today is not the day for such genteel ways. Today is the day he needs to make abundantly clear to the prime minister, in the meeting on the energy crisis, that unless the government seriously reforms the entire power sector, the country will effectively shut down completely.

(Read: Severe power crisis - PM Gilani calls for energy conference)

The problem is at once complex and simple: the government needs to stop promising subsidies for electricity, because it simply cannot afford to pay them. And it needs to stop managing the power distribution companies, because the government is utterly horrendous at running any commercial enterprise.

The country’s power crisis – which has brought thousands onto the streets – has its genesis in the government’s belief that providing ‘relief’ to people means providing subsidies, rather than ensuring that the companies they work for have enough electricity to keep running so that they do not get sacked.

Hafeez Shaikh knows the folly of this approach and has been patiently but relentlessly advocating for a more market-based solution, one where the government restructures and sells off its power companies and sticks to regulating the industry.

He has even gotten the Asian Development Bank to agree to a one-off financing of the circular debt – the accumulation of past, unpaid subsidies – if the government can only jettison its bad old ways.

Standing in his way are elected politicians like Naveed Qamar, people who face the trade-off between what is good for their short-term political careers and what is good for the long-term future of the country. Qamar has reportedly been resisting Shaikh’s laissez-faire approach, insisting that the government ‘take care’ of its constituents the old-fashioned way. There may be a time and a place for Qamar’s way of thinking. But not today. And not in front of the prime minister.

Published in The Express Tribune, October 3rd, 2011.

COMMENTS (3)

Ahmer Ali | 10 years ago | Reply

Assalam-o-Allaikum Warahmatullah.Would our corrupt,beggars and slaves leaders like to answer these questions honestly and sincerely to the nation about the most severe and worst electricity crisis ruling Pakistan: 1-Why there were no any load shedding shortfall in Musharraf's regime whereas in Musharraf's regime electricity was being generated with the same available resources? 2-In Musharraf's regime no any dams or water reservoirs were built but how was the electricity being supplied without any break in the country? 3-How Musharraf was fulfilling the electricity requirements of Pakistan with the same available limited electricity generation plants?

simla | 10 years ago | Reply Are you sure that you want to produce more KESC in Pakistan? Cant you see the crap performance they have pioneered? Your advice might work for other countries BUT NOT pakistan. Just to mention one example, dengue outbreak should have made people sensitive about others. BUT NO. Black market on its full swing. Inflated prices and much more. Want to talk about PTCL? Even your kids wont get 3g because PTCL's agreement let it set its monoploy. In my opinion, fire all in PEPCO, let companies like lesco deal directly with fuel companies.Lets make a deal with neighbors even if its India.
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