It’s load-shedding, stupid!

3 issues deserve the government's attention in first 100 days: load-shedding, load-shedding, net outflow of capital.

The elections of 2008 and 2013 have been lost by incumbents because of load-shedding. The next government has been chosen by the electorate for its reputation for completing projects it fancies, come what may. Naturally, it expects the same to see the end of load-shedding. So deep is the penetration of the power related anger in the public at large that even a hint of the continuation of the inaction of the past may bring the government down sooner than later. Pakistan may be among the countries with the lowest consumption of energy per capita, but every power failure transmits the message of incompetence to almost all households in a split second. The vibes coming from the PML-N suggest that the Mian brothers are suffering from too much advice.

The worst piece of advice was on load-shedding. Nawaz Sharif went public with describing load-shedding as problem number one. But he would not commit on a deadline. He made fun of Shahbaz Sharif for giving such deadlines. Fair enough, if he himself had not given deadlines on other issues. Why, might one ask, have a programme for the first 100 days of government? Is this laundry list even necessary? There are only three issues that deserve the fullest attention of the government in the first 100 days: load-shedding, load-shedding and net outflow of capital. For the rest, work should start on a financeable medium-term programme. By announcing the finance minister first and the energy minister afterwards, the leadership seemed indecisive about the order of priorities.

By luck, some new power projects started by the previous government might mature in 1,000 days. The public understands that new supply cannot be added to the system in the immediate or near term. What is entirely possible in 100 days is to take effective measures on three counts — conservation, efficiency and, for lack of a better term, governance. Taken seriously by all and sundry, conservation alone can add upwards of 1,500MW. Efficiency or energy intensity is another area that can augment supply in a short time. Pakistan uses more energy to produce one dollar of its GDP than countries with a much higher GDP per capita. There are well-known ways of improving energy efficiency at the level of households, businesses and government. Finally, governance has become the Achilles’ heel of the energy sector. The so-called circular debt is its worst manifestation. Even if the present level of this huge debt is cleared up in one stroke, as Mian Nawaz Sharif has said he would, the problem can recur if the culture of not paying up on time and across-the-board subsidies continues. Receivables routinely exceed payables by wide margins because price does not cover cost, cost conceals theft and wastage and all players wait for the government to bail them out. Fuel allocation is distorted as no distinction is made between efficient and inefficient plants. From imported coal to gas, the priority for electricity to captive plants is a cobweb of corruption and vested interests, nurtured by a structure that is decentralised in name only.

As for the net capital outflow, I have been saying and will say it again that there is no need to rush to the IMF. Regulatory duty on inessential imports, recovery of the overdue $800 million from Etisalat and a transparent 3G auction will support fiscal, as well as current account balance, for 100 days. This is enough time to prepare a national reform programme and think carefully about whether to implement it with or without the IMF.

Published in The Express Tribune, May 24^th, 2013.