THE Water and Power ministry is angry with the regulator, Nepra, for making claims in its annual report that the ministry finds highly objectionable. Specifically, Nepra has stated that 70pc of power meters installed in people’s houses appear to be overstating their bills. It did not exactly go out of its way to clarify that it was talking about time-of-use meters only that constitute less than 3pc of total residential meters installed.

The report also claimed the government appears to be engaging in favouritism when deciding which power plants to run and which ones to idle when planning its power generation, without adding it did not have the capacity to do a technical audit of the individual power plants, meaning it actually lacked the technical ability to make a judgement on which power plants are suitable to run and which ones aren’t.

For its part, the ministry took the highly unusual step of publicly disagreeing with Nepra’s report, taking out ads in the newspapers saying that Nepra’s judgements made no sense. Ministry officials, in private conversations, have not hesitated to use the word ‘corruption’ either when describing Nepra’s motives for putting out an annual report that is highly critical of the ministry’s performance.

What is complicating the ministry’s efforts, though, is the fact that the newly inducted chairman Nepra, under whose auspices the annual report has been put out, was selected by the government. Did the government make a mistake in nominating this person to the post? Or is this just another case of a stout individual, known for his refusal to back down in the face of political pressure, simply trying to do his job?

The petroleum minister is similarly upset with Ogra, the oil and gas regulator, for its refusal to toe the line on LNG imports. The government wants to use Pemra, the regulator for broadcast television, to instruct all channels to refrain from airing commentary critical of the Saudi Arabian government’s handling of the Haj stampede, invoking an article of the Constitution which prohibits commentary that could damage relations with friendly countries. Strange that this article was not invoked when the Kerry Lugar Bill was being vilified, for instance, unless somebody wants to argue that America is not a ‘friendly country’. If that is the case, then why does Pakistan take so much aid from them?

A strong and independent regulator is necessary in an economy that is increasingly being driven by the unaccountable sway of private-sector investors.

The Rangers just used the State Bank like a post office, basically ordering a directorate of the central bank to forward a letter demanding all account specific details connected with a number of detained individuals be handed over immediately. The State Bank complied, but refrained from asking the banks to ‘ensure compliance’ with the orders, basically passing the buck to the banks to decide for themselves whether they wish to comply or not.

Across the board, we are seeing increasing recourse to treating the regulators as if they are attached departments of the government. Any regulator that may show signs of independent action, which is what they are supposed to do, puts itself at risk of retaliatory consequences.

But then consider the alternatives. The amount of power that any given regulator exercises is huge, and if those powers were to be used to the hilt for political purposes, they could do a great deal of damage to the government. Imagine if the Higher Education Commission were headed by a strong-minded and vocal individual at the time of the whole fake degrees scandal. Imagine if the State Bank had started to get really muscular about government borrowings back when those borrowings from the State Bank were very high. Imagine if Pemra were to invoke this article more often, considering that there is no real working definition of a ‘friendly country’, it could mean the press can be stopped from discussing any foreign policy matter in a manner that could damage relations with any country the government sees fit.

Likewise with the SECP, which could if it wanted, send shockwaves through the stock market simply by opening an inquiry into the affairs of any of the big brokers. Or Nepra could set tariffs with a less lenient view of the requirements of private-sector investors, or better still, stop acting like a purely tariff-setting body and actually take up its duties as a power-sector regulator in earnest.

The Competition Commission was on its way to becoming a strong and independent body, with judicial powers to impose penalties, until the Competition Act was amended to grant right of appeal to the high courts, instead of the Supreme Court only, which effectively defanged it. A lot of its orders against powerful lobbies have subsequently been stayed by the Lahore High Court.

A strong and independent regulator is necessary in an economy that is increasingly being driven by the unaccountable sway of private-sector investors, who bring with them a rapacious appetite for returns on the cheap. But there is something in the manner in which our state functions, something about its politics and its relationship with big business that inhibits the operation of an effective regulator.

What that ‘something’ is can be difficult to put one’s finger on. In some cases, it is a will to not disturb the status quo at a time when it is already being rocked by frivolous and motivated politics. At other times it is a will to protect the rents of a given section of the business community. At other times, it is the preservation of a government strategy which is built, at least in some measure, on painting a rosier than thou picture of the economy. Sadly enough, though, the end result is always the same: a political economy designed to preserve and advance the interests of the elites.

The writer is a member of staff.

khurram.husain@gmail.com

Twitter: @khurramhusain

Published in Dawn, October 15th , 2015

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