Back to the era of candles and kerosene lamps: DATELINE ISLAMABAD
FROM the euphoria over the foreign loans that the country has been showered with, the general impression was that consumers would finally be getting a break what with Islamabad’s avowed attack on poverty. Instead, however, they have found to their dismay that their gas bills have shot up, medicine prices have jacked up and now they are being slapped with a 50 per cent increase in their electricity bills.
The increase, according to a Dawn report last week, is the result of the removal of the government subsidy on electricity for consumers using 1,000 units a month and above. These consumers now have to pay a flat rate of Rs6.7 per unit instead of the previous slab rates of Rs2.14 for the first 100 units, Rs3.03 for the next 200 units and Rs5.32 for the next 700 units. By phasing out the subsidy removal for other consumers using below 1,000 units a month over the coming year or so, the government cannot escape from the fact that the total effect of its action is a hefty 50 per cent rise in the people’s electricity bills. The next consumers to be hit would be the 700- unit users, then the 300-unit users and, finally, the subsidy would be removed for all consumers except “lifeline” consumers using 50 units and below.
On top of this, the subsidy removal for the 1,000-unit users has been backdated six months from August 2001, leaving consumers with a tidy “bill adjustment” or “arrears”. (On the other hand, when the salary increase for government servants was announced in mid 2001, the increase was to be made effective six months later.) This is totally unfair. It is not as though consumers have readily available savings to dip into to make this kind of uncalled-for lump sum payment. It is just as well that Wapda should start charging from now on the rest of the consumers (using below 1,000 units) at the new subsidy-removed rate rather than backdating it later on and leaving them with “arrears” to pay off.
And power regulator Nepra’s explanation for the power price hike? Under the power sector reforms agreed to with the donor agencies, all subsidies in the power sector have to be phased out except for the “lifeline” consumers. Whether Nepra, or Wapda, or the ministry of water and power, or the IMF, is responsible for the increase, the fact is the federal government in Islamabad has suddenly withdrawn the subsidy to electricity consumers resulting in a 50 per cent jack-up of electricity bills.
What is worse is the callous attitude of our officials, one of whom had the audacity to wave off the financial impact of the subsidy withdrawal as “nominal”. Perhaps so for him as being a senior Wapda official, he doesn’t have to pay his electricity bill from his own pocket. In fact, if memory serves one correct, there appeared a small, inconspicuous then, mysterious news item a few weeks back in the newspapers which announced that federal ministers would be given an extra Rs15,000 a month for electricity bills. One knows now, the raison d’etre for that move.
To be sure, the financial impact of the government’s decision to withdraw the subsidy on electricity is considerable if not devastating on the millions of other consumers, both domestic and commercial. To quote one irate consumer (a retired lieutenant-general) in a letter to the editor, the benefits, if any, of the Rs866 increase in pension which the government gave him has been nullified three times over by a minimum Rs2,225 a month increase in his electricity bill.
If consumers think they won’t be seeing another power price hike in years, they are wrong. Wapda has submitted another petition to Nepra for a further increase in power tariff, apparently to cover a Rs32 billion deficit. This further increase, according to an expert at Nepra, would cost consumers at least another Rs1.10 per unit.
Apart from the harsh impact on consumers, the sharp increase in electricity charges makes nonsense of Islamabad’s profuse commitments made to poverty alleviation and building a welfare state. Common sense will tell that a decrease in the growth rate of electricity consumption will not be in tandem with efforts at poverty reduction and social uplift. Increasing the rates of electricity will depress the consumption of electricity, whose overall growth rate in the country has already been on a downward slide since 1990-1991. In fact, between 1997-1998 and 1998-1999, the growth rate of electricity consumption registered a minus 2.7 per cent. The increase in electricity charges will in all probability grind the pace of electrification of remote and rural areas, already dead slow, to a complete halt. Since 1996-1997, governments in Islamabad have already been unable to meet the set targets of village electrification. Instead of widening the use of electricity, the rise in electricity charges will, in the words of the above irate consumer, “push the people back to the era of candles and kerosene oil lamps”.
Moreover, a hike in utility price does not come alone. Every trader, shop owner, manufacturer, etc., will naturally increase the price of his service or commodity to make up for the increased utility charges he has to pay. The result is consumers would be rendered more hard pressed than ever before.
What will be more damaging is the effects on the economy, in particular the impact on investment, the manufacturing industry and industrialization. The already high rate of utilities in the country has already been somewhat of a disadvantage to investment and the manufacturing and industrial sector. It is a big damper on trade because the higher production costs makes our products more expensive and, hence, less competitive than those in other, specially neighbouring, countries. This latest increase in electricity rates will only make the future of our manufacturing and industrial sector, which also has had to bear the costs of frequent breakdowns in electricity supply, bleaker than ever before.
It is a known fact that IMF loans like the ones Islamabad has got into come with harsh conditionalities such as utility price hikes. It would be of some comfort to consumers if they were guaranteed relief and eventual prosperity after going through these tough measures. Unfortunately, it is also common knowledge that many developing countries find, after years of IMF’s help, that they are no better if not much worse off economically than before they were aided and their economies directed by the IMF. Argentina is the IMF’s latest victim to fall, while others like Bolivia, Nigeria, Tanzania and Haiti have seen riots, upheavals, strikes and demonstrations ever since the IMF’s entry into their economies.
It will be a tragedy if ours is another Argentina of sorts in the making.
Local bodies in crisis: SINDHI PRESS DIGEST
KAWISH writes that Sindh Minister for local bodies Deewan Yousuf has admitted that the federal government owes Rs4.83 billion to Sindh as payment towards the abolished octroi tax, and this matter has been raised before President Gen Pervez Musharraf. Owing to the non-availability of these funds, the local governments are just unable to fulfil their prime responsibilities, and municipal workers in several parts of the province are not getting their monthly salaries. This has compelled them to observe strikes frequently, because of which heaps of garbage and overflowing sewage have assumed horrendous proportions in several cities and towns of the province. If this situation continues, it is feared it may lead to outbreaks of diseases. The federal government should take immediate measures to release the funds to the local bodies for the success of the devolution plan.
Commenting on the newly introduced police reforms, Tameer-i-Sindh opines that the reforms cannot be successful unless and until the police department is purged of black sheep which have earned a bad name for the department. Corruption and anti-people practices are so deep-rooted in the department that it will take much more than the administrative reforms to make it people-friendly. Meanwhile, according to Ibrat, Sindh Governor Mohammedmian Soomro has expressed satisfaction over the law and order situation in the province while speaking at the Sindh University’s Seerat conference. The daily is surprised over the governor’s claim which utterly ignores the ground realities.
And a glance over the headlines reveals that tribal clashes, Karo-kari killings and other crimes are continuing as usual in Sindh. Jacobabad Hindu Panchayat president Sudham Chand Chawla’s high profile murder and the rising cases of tribal clashes in Jacobabad district have made headlines. So has the continuing protest over the failure of the Larkana police to recover Hussain Bakhsh Narejo and Manthar Solangi from the captivity of bandits.
Narejo shot to prominence as a leader of the Movement for Restoration of Democracy in the 1980s. Later, like many other left-oriented activists of that era, he could not adjust himself in the changed political scenario after 1988 and quit politics. But he is still respected in the political circles of Sindh and when he was kidnapped with poet Manthar Solangi last month, the incident prompted protest demonstrations and token hunger strikes throughout the province. This protest still continues as many rallies were taken out in Karachi, Hyderabad, Larkana and other parts of the province last week.
Awami Awaz and Halchal have taken out special supplements on the occasion of the launching ceremony of a comprehensive English to English and Sindhi dictionary with 100,000 entries, including scientific and technological terms. Paying tribute to its compiler, Sindh Irrigation Secretary Abdul Rashid Memon, the dailies hope his labour of love would prove to be a source of inspiration to Sindhi writers and provide guidance to the readers.
Hilal-i-Pakistan has criticized the amendments to the Anti-Terrorism Act and the inclusion of army officials in the anti-terrorism courts. It says the presence of army officials would affect the independence of the judiciary and would create the impression that these courts are summary military courts. Instead of experimenting with the judicial system of the country, it would have been much better to implement the recommendations of the Chief Justices’ Committee to improve the working of the anti-terrorist courts.