Is Pakistan heading towards economic suicide? Protests are going on over high electricity charges, C which started in Pakistan-Occupied Kashmir earlier in August, and have spread like wildfire across Pakistan. In many cities and towns, the protests have taken a violent turn. There is a call for civil disobedience on social media and videos of mosque loudspeakers in Pok urging people not to pay their bills.
Peshawar, Karachi, Lahore, Multan, and Rawalpindi, have all seen people blocking roads, burning tyres and chanting slogans against the hiked electricity charges, which have brought hefty bills for July for households and businesses.
On Tuesday, the country’s interim Information Minister, Murtaza Solangi, said the Energy ministry had finalized a list of proposed measures to provide relief to the people, and this would be presented in a federal cabinet meeting for approval.
Two days ago, the caretaker Prime Minister, Anwaar ul Haq Kakar, held an emergency meeting and directed authorities to take“concrete steps” within 48 hours for a cut in the power tariff.
What are people saying in Pakistan?
The protesters have refused to pay the exorbitant electricity bills for July, saying they were already struggling amid high inflation and unemployment and experiencing high load-shedding. The massive bills will deal a crippling blow to many businesses, trade unions have said.
The Jamaat-i-Islami (JI) has announced a nationwide strike on September 2 over the power tariff issue. According to the Pakistani news agency Dawn, average electricity cost has “more than doubled for low- to middle-class households since May”.
Reason Behind Electricity Price Hike?
The hike is the result of what Pakistan agreed to for a $3-billion bailout by the IMF in June. Under a host of regimes to boost fiscal discipline, the IMF has asked Pakistan to shore up tax revenue. The bailout deal could be signed only after eight months of tough negotiations.
Kristalina Georgieva, Managing Director and Chair of the IMF said in a statement after the deal, “The anticipated improvement in tax revenues is critical to strengthen public finances and to eventually create the fiscal space needed to bolster social and development spending…
In parallel, the authorities urgently need to strengthen energy sector viability by aligning tariffs with costs, reforming the sector cost base, and better-targeting power subsidies.”Thus, in July, the power tariff was hiked at different rates for different categories of customers.
Apart from the IMF deal, another reason Pakistan’s authorities have cited is the elevated international energy rates in June. But there are other, structural problems at play.
“The bad news is that electricity prices in the country will continue to climb even after a downturn in international fuel prices as long as there is no move to undertake long-standing power sector reforms to sharply cut system losses,
Control the allegedly rampant corruption in the distribution companies, stop widespread power theft by the powerful, and, more importantly, Reduce reliance on imported fuels by shifting to local fuels for generation and encouraging renewable energy”, an editorial in Dawn.
What Is the Government Saying?
On Sunday, PM Kakar said the government would take a re-look at power subsidies enjoyed by some institutions even as the common man struggled.“We will not take any step in haste that will harm the country. We will take measures that won’t further burden the national exchequer and will facilitate the consumers.
It is not tenable that while the people face difficulties, high-ranked officials and the Prime Minister continue to consume free electricity paid for by the taxpayer,” the PM added.While the government has so far not given any details about the steps it will take to provide relief to people,
Dawn quoted sources as saying that among the proposals being considered was converting the bills into installments, and balancing them out against the lower power consumption in winter. Some tax reliefs are also being considered.
THERE IS NO SILVER LINING YET
Inflation is increasing at a time when factories and businesses are firing employees. The current crisis has killed the hope of many young people who are now desperate to leave the country.
Over eight lakh Pakistanis left the country in the first six months of this year, creating a new record. Of them, a lakh were highly-trained professionals, including doctors, nurses, engineers, information technology (IT) experts and accountants fearing Pakistan heading towards economic suicide.
The annual inflation rate had reached an all-time high of 37.97% in May.
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