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The bottomless pit

May 13, 2012

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IT’S that time of the year again. One of many now.

Demand for electricity goes up, system struggles to cope, endless ‘loadshedding’ results, politicians pound fists on desks, protesters burn electricity bills and other hapless paraphernalia on the streets, government swings into action, emergency supplies are scrounged up, and the system limps on, until the next crisis.

The problems in the power sector, from generation to transmission to distribution, are so well understood that there’s no point going over them anymore. Instead, it may be more helpful to ask, why?

Why doesn’t this government articulate an energy policy that will make Pakistan less reliant on expensive imported fuels? Why doesn’t this government overhaul the system through which electricity is purchased from power producers and delivered to end consumers? Why doesn’t this government recover multi-billion-rupee dues from various entities across the country?

Ask the politically inclined these and a handful of other ‘whys’ and they are usually answered on the basis of political leanings:

government is corrupt vs problems are inherited; government doesn’t give a toss vs structural flaws that no government has been able to overcome.

As ever, there’s some truth in all of it. Asif Zardari & co really don’t understand the problem or have the capacity to fix it and in this top-down culture if the boss doesn’t bang heads together, no one will take the wrenching decisions necessary.

And while problems were evident in the power sector much before Zardari and his band of bumbling advisers took over, the absence of a viable energy policy four years since the electricity crisis became this government’s business is pretty appalling.

But scratch the surface of those answers and a deeper malaise becomes evident, and it’s about how the state is perceived by our political leadership — Zardari, the folks before him, the folks who will follow him, everyone.

What they’ve done is take to its logical conclusion the state as a bottomless pit of money and as a means to disburse patronage.

Money comes from somewhere, anywhere, and it’s doled out to favourites and political bases and for emergency triage when collapse looks imminent — and that’s what keeps the system inching forward, or at least from imploding.

Leaderships the world over figured out a long time ago that a state isn’t like a normal household: you can spend more than you earn over a lifetime because you have more ways to borrow and you can transfer debt to the next generation.

It’s so much easier than fiscal prudence and discipline. Power sector is guzzling hundreds of billions of rupees a year and a trillion or two has to be pumped in every few years?

The responsible thing to do would be to systematically approach the issue of energy: what are Pakistan’s energy needs over the next decade or two; what is a sustainable and affordable fuel-mix for the power sector; how can dues from each stage of the electricity chain be recovered efficiently and on time; and on and on, a series of serious questions requiring deep thought, application and perseverance to resolve.

The alternative? Make it up as you go along.

A trillion and more of public-sector money is needed to plug the gap between what it costs to produce electricity and how much is recovered from users of that electricity — so you just do it. Because you can. It’s not your money, you can borrow it from a range of options and you don’t have to worry immediately about repaying it.

Plus, the finance ministry doesn’t kick up too much of a fuss; the guys over at the power ministry will mumble a bit but not too much; and the folks who are owed money for supplying fuel and electricity and are worried about the survivability of their businesses — they’re either overruled by the government or arm-twisted into keeping their mouths shut.

Think of it this way. If you’re PSO, do you really want to be blamed for electricity disappearing across the country once you pull the plug on fuel supplies for non-payment? And if you’re desperate enough to go for that option, the government can bring in decision-makers who will see things its way. The benefits of state control.

As for the private sector, the independent power producers and the like, make too much of a noise and the government will cut off even the trickle of funds flowing their way at the moment, consigning their businesses to oblivion. So better to wait it out and rattle the cage when desperate for a few extra dollops of money.

At least by sticking it out all those stuck up billions will eventually be realised. After all, businesses have contracts and lawyers on their side and the state has ways to pay for things it can’t afford.

But that still leaves the question, why does the government take the political hit of street protests and mass disgruntlement over electricity shortages instead of solving the problem?

Because it can’t and it can: it doesn’t have the capacity or understanding or will to figure out the problem but it does have money to throw around and earn political support in other ways.

Everyone in the PPP knows the power crisis will be a problem for the government come election time. But in politics if you have a problem you don’t necessarily have to solve it to beat it — you can pour other goodies into pockets and hope that people forget about the bad stuff.

The state fundamentally as a bottomless pit of money and as a means to disburse patronage — until that approach changes don’t expect electricity, or any other basic amenity, to become a reliable and regular presence in your life.

The writer is a member of staff.

cyril.a@gmail.com

twitter: @cyalm