Powerless
A Familiar Sight: Darkness in Pakistan. Photo: AFP
It is not normal protocol for World Bank vice presidents to make presentations. But this was a special occasion: it was March 2005 and Pakistan’s new-found prosperity was at risk. So as General Musharraf sat to listen at the Presidency in Islamabad, Praful Patel, vice president of South Asia for the World Bank, and not one of his juniors, delivered the news: unless proactive policies were adopted, Pakistan would face a major energy crisis in three to four years.
As a former World Bank vice president, Shahid Javed Burki was also there for the presentation. He remembers that day clearly. “At the time, there was talk of an energy surplus. But really, there was none.” GDP was increasing rapidly and the country’s appetite for energy was eating into whatever excess production capacity was there.
The presentation had an impact on Musharraf. Afterwards he invited Burki, who had served as Pakistan’s finance minister from 1996 to 1997, back to his office. “Do you know this man Patel?” the general asked Burki of the Ugandan of Indian descent.
“Very well. He was junior to me at the World Bank. In fact, he showed me his recommendations before he presented them to you.”
“Should we take his conclusions seriously?” Then, right there, upon hearing Burki’s “yes,” the then president and general called Prime Minister Shaukat Aziz on the phone. The general gave the order: get moving on this.
* * *
Few positive moves have been made since then. The proof is in the magnitude of the current crisis. Electricity shortages nationwide hover around 3,500MW. As a result, loadshedding is a daily occurrence. Business and industry has been stifled across the country. And as always, ordinary Pakistanis suffer the most. According to a Gilani poll conducted by Gallup Pakistan in July, 83% of Pakistanis say they have been affected by loadshedding, while a staggering 53% of the nation claims to live without electricity for more than eight hours a day.
Power shortages are just one part of the overall problem – money is another. The rising price of oil in the global markets was a factor in pushing Pakistan to the edge of bankruptcy in 2008. Oil imports alone have cost Pakistan almost $21 billion in the last two years. In the process, Pakistan’s scarce foreign reserves plunged from over $16 billion in 2007 to a low of $6.7 billion in October 2008. Islamabad went running to the IMF for a multi-billion-dollar bailout and turned to the newly created Friends of Pakistan with another begging bowl in hand.
The financial woes of the government have crept into the energy sector too. The entire industry is saddled with debt, as most players struggle to pay their bills because they can’t collect on their own receivables.
The economic costs are being felt across the country. Last year GDP growth was a paltry 2%, exports missed budget targets by 19.5% and inflation was 20%, far off the government’s budget goal of 12%. Jobs, poverty reduction efforts, social programmes and quality of life are all on the decline.
The energy crisis has metastasised across the nation. And it is, without a doubt, the worst energy crisis Pakistan has ever seen.
With Pakistan’s 62nd birthday around the corner, the government is scrambling to find fixes. Like an intravenous drip, it is slowly trying to inject new power into the national system, megawatt by megawatt, just to keep the economy alive – and denizens calm. Islamabad has promised that 600MW of electricity would be added in August. Late last month, the Federal Minister for Water and Power, Raja Pervez Ashraf, announced that rental power plants would be operational by the end of the year. These in combination with a group of new Independent Power Producers (IPPs) will, said the honourable minister, help end loadshedding by the end of the year. Lower winter demand for electricity will undoubtedly help in potentially reaching this promise too. But guaranteeing a quick, permanent end to power outages is an impossibility in the current crisis. As soon as summer rolls around again, demand will, once again, skyrocket. In summer months, a one-degree-Celsius increase in temperature can raise electricity demands by 40MW on KESC alone, says its chief operating officer. Of course, loadshedding may also be lower by next year as businesses and industries continue to slow down or shutter up, reducing overall industrial and commercial demand in the country – in 2008-09, large-scale manufacturing declined by a bone-crunching 7.7%.
Besides promising to end the country’s miseries, Minister Raja Pervez Ashraf has also been reminding voters of who to blame: not him. He insists that the past regime should have built the electricity-producing infrastructure. They didn’t. And now we are suffering.
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here’s to four years of KU fun:)
The statistics are shocking. The topic is so pertinent no matter how much is written and said about it.
The article is captivating, even with such a mundane and overdone topic.
Hats off! Now let’s hope something ACTUALLY is done – we all know what a long shot that is.