The glowing embers of Pakistani economy

Energy shortfall in Pakistan has increased by 48%

The government has decided to finally come through on the deal with the IMF of raising the electricity tariff by about 18%. To achieve this end, they will be raising the electricity prices by 2% per month.

So where does this leave the hapless citizens of Pakistan? It leaves them in a space called “Nowhere”. The thing is, despite the government’s tall claims of actually caring for the masses, there is hardly anything to show for it. Sure the government can claim it had the 18^th Amendment passed (though it’s still pending with the Supreme Court), and that it built a consensus government (full of two timing, double crossing douches), but when it comes to the average citizen of Pakistan, well let’s just say they’ve only become worse off than before.

Even though Samina Ghurki says that the PPP government will control inflation and lead the masses out of this nightmare, most of us are having a hard time digesting this statement. I’m not sure whether Samina Ghurki is trying to be funny, or whether she’s just saying this to impress Zardari. Whatever the case, comparing inflation to the 18^th Amendment and NFC Award is indeed a sham.

The government is honor bound to do what the IMF and World Bank ask it to do, because it took their money in the first place. The harsh reality however is that despite giving away millions of dollars to the parties involved in the Rental Power Projects scheme, the government has failed to extract the agreed upon wattage from the producers. It is tantalizing that a country suffering from a 5000 MW energy shortage spends millions of dollars to secure just 62 MW of energy. What is even more dumbfounding are the ridiculous conditions that they agreed to set by the IMF. Raising the electricity prices will literally crush the people not unlike the sugarcane shafts that are passed through rollers to extract their juice. The irony is that despite this increase in electricity tariffs, there will be no respite from the never ending load shedding that is going on in this country.

Corruption and mismanagement have crippled the energy system

One thought that the government would attempt to mollify the people by pretending to care at least but that is just not going to happen. Despite the government’s flamboyant claims of deregulating petroleum prices to bring them in line with international prices, it has only ended up increasing the prices rather than let market forces take over. So when the prices of crude oil rise or fall back in the international market, there is a highly disproportionate and skewed effect in Pakistan. The reason for this abhorrent faux pas is of course the lack of government grit to tackle this problem. Despite making tall claims, the government really hasn’t passed any legislation that attempts to correct this wrong. The oil refineries continue to make whirlwind profits on the back of the excuse that they need to collect surcharges to maintain their financial outlook. The government (not having the balls to levy any direct taxes) on the other hand, continues to collect indirect taxes on petroleum products. According to one estimate, it collects Rs 4 on every Rs 10 worth of petroleum products sold.

So where does one draw the line in this maddening scenario? The recent oil price hike and the subsequent closure of CNG station for three days a week has jacked up the transportation costs to abominable levels. Of course the transporters are justified to charge higher fares but to charge the unrealistic fares that they demand is simply outrageous. The average citizen already having gotten his back broken for being a living soul in this country will now find it even harder to make ends meet. It is an atrocity of the highest order that is being committed in this land of Islam and Muslims who always quack about asking for the implementation of Islamic socialism.

While the world continues to move forward, we continue to move backwards. There are no checks and balances, and those who try to implement the words written on pages inside the book called the Constitution of the Islamic Republic of Pakistan are persecuted and made to repent for their intention of doing some good in this country. Every sector of economy in Pakistan is in a mess. There is no doubt in my mind that the nationalistic approach to economy needs to be shunned in favor of the market based economy system, but given the current landscape, the government is neither here nor there. It is simply taking more loans from the lenders without passing the appropriate legislation, and adopting the checks and balances required to put that money to good use.