Power tariff and economy

THE realization by the IMF, for the first time in a decade, that further tariff increases are no longer a viable option for the power sector in Pakistan is a welcome development. While approving the release of a $-114 million fourth tranche following a review of implementation of the poverty reduction and growth facility (PRGF) programme, the IMF board of directors avoided laying down the conditionality of increases in electricity rates to cover the continuing losses of Wapda and the KESC. In doing so, the board took note of the adverse effect of the repeated power tariff increases on the country’s economy and, more particularly, its export trade over the years. Instead, the focus of reforms and restructuring efforts has now been shifted on to improving the efficiency and good management of Wapda and the KESC. Most of the losses of the two utilities have been due to theft of power, accumulation of arrears by influential individuals and departments and mismanagement of finances. During the last 17 years the IMF has had several programmes in Pakistan and there was hardly an occasion when the losses of the two utilities had not come under review. The handy solution has always been enhancement of tariff. These increases have made electricity in Pakistan among the highest in the Asian region, with the result that the price competitiveness of our goods in the international market has been seriously eroded and the export trade has been stagnating for long.

Now the IMF has felt impelled to admit that increases in tariff are no longer a practical proposition in view of the wider economic imbalances that have resulted from it over the years. The focus has now to be “on reducing leakage, fraud and administrative costs and better enforcing bill collections as set out in each utility’s improvement plan.” The two power utilities have been a continuing drain on budgetary resources and their contribution to the economy too has remained restricted by the high cost of output. This situation has arisen despite five long years of army management of both the utilities. This position needs to be corrected — and soon.

The IMF has acknowledged that the implementation of the $1.4-billion PRGF programme has been going on well. Economic activity has been picking up; the inflation rate remains low; strong private capital inflows through remittances have contributed to the building up of official reserves; the fiscal deficit has been lower than anticipated. All this has been possible despite lower taxation receipts because non-tax revenues substantially exceeded the prescribed target. However, the IMF has had to grant waivers on three counts. First, the CBR’s efforts to collect taxes have not been satisfactory. The targets were revised downward thrice during the year and yet the final target of Rs 414 billion could not be achieved, receipts being Rs 403.9 billion. The second waiver relates to the KESC which was to be readied for sale by July 30; this target too could not be met. Privatization of the KESC and certain operations of Wapda has been on top of the agenda in order to reduce the drain on the budget, thereby saving resources for social services and infrastructure. The third waiver relates to new tax exemptions granted to certain categories of taxable incomes to promote investment. The IMF attaches the highest priority to the privatization of the KESC and certain operations of Wapda. An improvement in their efficiency is critical to the revival of the economy.

CEC’s decision

THE Chief Election Commissioner (CEC), Mr Justice Irshad Hasan Khan, has expressed his inability to preside over the inaugural, oath-taking session of the newly elected National Assembly. In a letter to the president, the CEC has said that since cases relating to disqualification of members of parliament may be referred to him for a decision, “propriety demands that some other suitable person be nominated to preside over the first (NA) session”. There is no legal requirement that only the CEC can preside over the oath taking, but a tradition of sorts had been established to this effect, and that was probably why the president had nominated Justice Irshad Hasan Khan for the purpose. On the face of it, there is no clash in the CEC administering the oath of office to MNAs, an entirely ceremonial function, and, when the occasion arises, deciding cases of disqualification, which will be a purely legal process. If the logic of the CEC’s argument is carried forward, then the question will arise whether, in view of the several allegations of bias levelled against the Election Commission prior to the October 10 polls, he should at all sit in judgment on appeals that will inevitably relate to the conduct of the commission and its returning officers. It will be recalled that apart from charges of partisanship, such as the commission’s silence on demands to disqualify the leader of one party for default on bank loans, there have been many complaints about voters’ lists and delimitation of constituencies. Justice Irshad Hasan Khan’s appointment as CEC itself was controversial in view of the fact that he presided over the bench that had validated the military takeover in 1999.

At any rate, high functionaries are expected to honestly perform the duties that are assigned to them, and they have to be trusted to do so. There is no other choice, particularly in circumstances like ours where the political system follows a wayward course. Perhaps the CEC was irked by the fact that he heard of the president’s decision on television and was not informed of it beforehand. Maybe he believed that the oath taking might not turn out to be a very smooth affair. Whatever the real reason, we have another hiccup in a dispensation riven by doubts and uncertainties.

Rough justice

THE killing of a person in a Gujranwala village at the hands of an emotionally charged police constable the other day is yet another reminder of how religious zealotry can lead to irrational, even criminal behaviour. The person was beaten up and thrown out in the street by his family members after he reportedly burnt some pages of the Holy Quran in a fit of anger. Only a man who had taken leave of his senses would commit a sacrilege like this. Someone needed to find out why he had done so, if indeed he had actually carried out the act as alleged. But a policeman was called out who, outraged by what he was told, summarily shot the man. Clearly, mob hysteria was at work, with a man being killed without being tried.

The bizarre episode reminds one of similar incidents in the past where blasphemy-accused were either lynched or shot dead by one zealot or another even after they had been acquitted by a court of law. That this time round it happened to be a police constable who took the law in his own hands and administered rough justice is a cause for even greater concern. It shows how by our constant display of religiosity, promotion of sectarian passions, and flaunting of personal piety we can distort Islam’s values of tolerance and forbearance beyond belief and turn a religion of peace into an instrument of harassment and persecution.