Dawn Editorial 5 November 2020
Rescuing industry
THE government’s decision to slash electricity prices for all industrial users while announcing some additional incentives for small and medium enterprises could prove a life-saving measure for many. The industry was desperate for help because of the impact of Covid-19 and struggling to retain — and possibly increase — the share of the country’s stagnating exports in international markets. The industrial energy package also anticipates a significant boost to domestic economic growth and employment as it will act as a major incentive for companies to once again operationalise their existing, idle production capacity. With electricity 25pc more expensive in Pakistan than in other countries in the region, our exporters had long been lagging behind their competitors in global markets. Some would argue that the energy bill of the firms is only one of the many factors responsible for jacking up their costs and affecting their competitiveness globally, yet the reduction in electricity rates is a move in the right direction. Now the government can focus on other issues such as taxation and labour productivity to enhance the country’s industrial competitiveness and improve the quality of products.
The relief package eliminates peak hour rates from the electricity tariff of the entire industrial sector — a concession that in all fairness should also be extended to domestic consumers — and allows a 25pc relief in power bills on the additional consumption of units for the next three years. It further slashes the tariff for SMEs on the consumption of additional electricity to Rs8/KWh for 10 months, till June 30 next year. The package is estimated to cost the government around Rs20bn to Rs30bn, which is money well spent in light of the overall impact on the economy, growth, jobs, exports and taxes. Besides, the potential increase in power consumption will help the government utilise unused and idle generation capacity, especially during winter, as many companies which have shifted to gas-based, cheaper captive power will now return to the national grid. Thus, the government should not find it very difficult to sell the package to the IMF with which it is negotiating to revive the $6bn bailout package.
Apparently, the relief package is part of a larger plan to fix the country’s inefficient and erratic power sector, liquidate the circular debt that has grown to Rs2.3tr, reduce the size of the annual fixed capacity payments of Rs900bn being made to the IPPs (the capacity payments are estimated to rise to Rs1,600bn by 2023 if nothing is done to contain and reduce them), and decentralise power distribution to the provinces by doing away with electricity subsidies and cross subsidies for different consumers. The ultimate objective is to create competitive wholesale and retail electricity markets in the country where consumers would have the option to switch from one retailer to another. The job may be quite difficult but it is not impossible.
New NSS rule
FOR many Pakistanis looking to park their hard-earned savings somewhere reliable, from where they can meet their periodic financial needs, National Savings Schemes are usually the investment of choice. Returns from these are not among the most lucrative but that is offset by the fact that they are comparatively low risk and less susceptible to the volatility of other investment avenues such as the stock market. Small and medium savers in their retirement years constitute a large pool of NSS investors. There is much consternation among these senior citizens in particular over the changes the government has recently made in the nominee rules for NSS, making the payout procedure vastly more cumbersome. The step has been taken to comply with a Sindh High Court judgement of Aug 23, 2016, ordering the payment of NSS dues to ‘legal heirs’ as required under the Muslim Law of Inheritance rather than to ‘nominated persons’. According to the new procedure, the certificate purchaser/investor will no longer be able to designate a ‘nominee’ to whom the funds would go in the event of his/her death. Instead, the payment of the principal amount and the profit thereon, if any, would be disbursed to the legal heirs according to the succession certificate issued by a court in light of Sharia law.
The legal system in this country is already stretched way beyond its limited capacity; there is a backlog nearly 2m cases long and proceedings move at a glacial pace, particularly in civil courts. This burden needs to be lightened, not added to. The new procedure would also constitute an unnecessary complication where there is no dispute over the payout among the legal heirs of a certificate purchaser/investor. This paper over the past few weeks has received numerous letters from readers expressing their distress over the change in rules. The circumstances of some of them are such they cannot but worry over what is certain to be an extended ordeal for their nominees after they themselves are gone. The Supreme Court should revisit the issue and take a view that is both compassionate and practical. One way out, which would achieve the same result as that desired by the government, is to go back to the nominee system but have this individual give an undertaking that he/she will, when the time comes, distribute the proceeds from the NSS in accordance with the inheritance law.
Stolen relics
THE return of 45 artefacts to Pakistani authorities in New York by the Manhattan district attorney’s office should be a moment to celebrate. The relics are valued at around $250,000 and include sculptures of the Buddha from the Gandhara period. The return of these artefacts follows a lengthy probe by the US Homeland Security Investigation office into the collection of Nayef Homsi, described as a “known trafficker involved in illegal looting, exportation and sale of ancient art from Afghanistan, India, Pakistan and other countries”. The Pakistani consulate in New York played a commendable role by pursuing the case of the artefacts and ensuring the return of these cultural and historical treasures.
However, it is an unfortunate fact that the trafficking of such significant relics continues to be a thriving business in the region. Equally regrettable is the lackadaisical attitude of the Pakistani authorities that have failed to clamp down on this illegal trade of antiquities and dismantle the network that sells heritage items to foreign art dealers. Given this disinterest, what will be the fate of these recovered items once they arrive in the country? Post-devolution confusion has added to the woes of conservation and management of antiquities in the country. KP and Punjab have passed their own amended versions of the Antiquities Act of 1975, but Sindh and Balochistan have lagged behind in formulating legislation to protect important heritage sites such as Mohenjodaro. Robust and updated laws and coordinated provincial action can help check the rampant pilferage of cultural items and address the current lack of clarity over ownership of cultural property between the centre and the provinces. But laws alone will not protect archaeological heritage. The country’s history predates the events of 1947 by centuries but this is not reflected in the approach of officialdom that has hardly attempted to create a sense of pride in the public. This must change if the secrets of long-buried civilisations are to be showcased as a sign that Pakistan can protect its own.
