Pakistan energy crisis to hurt feeble government
Winning confidence of the IMF and donors becomes increasingly urgent.
ISLAMABAD:
Pakistan’s energy crisis, likely to deepen as winter approaches, threatens to further undermine the credibility of a government struggling an economy in tatters.
The International Monetary Fund, which has kept Pakistan’s economy afloat with a $11 billion package agreed in 2008, wants the government to take unpopular decisions such as raising tariffs to help generate funds for the power sector. Such measures are essential for Pakistan’s long-term economic health but may be a lightning rod for public anger.
“It really boils down to the political will of the government, and so far we haven’t seen the government able to stomach these reforms,” said Standard Chartered Bank economist Sayem Ali. “Energy is a disappointing story. There is no clear strategy; there is hardly any investment in this sector.”
Winning the confidence of the IMF and donors has become increasingly urgent as Pakistan seeks financial help after summer floods inflicted nearly $10 billion in losses.
Electricity demand is expected to grow by about 8 per cent annually, resulting in total demand of nearly 36,000 MW by 2015.
Published in The Express Tribune, November 5th, 2010.
Pakistan’s energy crisis, likely to deepen as winter approaches, threatens to further undermine the credibility of a government struggling an economy in tatters.
The International Monetary Fund, which has kept Pakistan’s economy afloat with a $11 billion package agreed in 2008, wants the government to take unpopular decisions such as raising tariffs to help generate funds for the power sector. Such measures are essential for Pakistan’s long-term economic health but may be a lightning rod for public anger.
“It really boils down to the political will of the government, and so far we haven’t seen the government able to stomach these reforms,” said Standard Chartered Bank economist Sayem Ali. “Energy is a disappointing story. There is no clear strategy; there is hardly any investment in this sector.”
Winning the confidence of the IMF and donors has become increasingly urgent as Pakistan seeks financial help after summer floods inflicted nearly $10 billion in losses.
Electricity demand is expected to grow by about 8 per cent annually, resulting in total demand of nearly 36,000 MW by 2015.
Published in The Express Tribune, November 5th, 2010.