REFORMS in Pakistan’s energy sector have been long overdue to break free of the vicious debt cycle involving international financing. While the need for reforms has been often stressed by various stakeholders, hardly anyone seems to have a wide-ranging plan in mind covering the details of the various steps that need to be taken to straighten out the worrisome state of affairs prevailing in the energy sector.

In the past, reforms, or whatever we did in the name of reforms, did not produce the desired results. For instance, the disintegration of the power wing of the Water and Power Development Authority (Wapda) and its division into a number of independent power distribution companies (Discos) did not result in better performance.

In fact, the performance has only deteriorated over the years, with higher levels of corruption, inefficiency, mismanagement, bad governance and incompetence adding to the menace of circular debt and bad recoveries.

Similarly, the independent power producers (IPPs) introduced in the 1990s, on the advice of international lennding agencies, have played havoc, contributing adversely to the financial health of the power sector, and leading to the ever increasing power tariffs.

Not only the common man is unable to pay the exorbitant electricity bills, which include taxes and surcharges totalling above 30 per cent, it is dimini- shing our exports that are no more competitive even within the region because of the higher input cost of electrical power.

The International Monetary Fund (IMF), or other lending agencies’ loans or even investors, cannot restructure the energy sector unless we set our house in order. No amount of loans and reforms are going to sort out the power mess unless the deep-rooted local problems of power theft, inefficiency, rampant corruption and poor governance are addressed first. Otherwise, the national debt will keep on increasing with energy prices spiralling out of control.

The actual problem is that we cannot have any meaningful reforms without there being a strong and representative government in place.

That is the only way for Pakistan to get out of the deep hole that it now finds itself in. And for that to happen, we need to hold elections; not just elections, but free and fair elections through which the people may choose their representatives.

Unless the election reforms are carried out before going for the general elections, the people can have no hope of having capable representatives in the assemblies.

Pakistan’s problems in the energy sector are interconnected with its political problems. There are many challenges in the way of reversing the current economic decline. Even if we start now, it will take years to put things on the right track. But are we ready to even get down to the starting line yet?

Riaz Bhutta
Islamabad

Published in Dawn, October 21st, 2023