Ill-conceived policy
PRIME MINISTER Imran Khan has announced a major list of incentives for the construction industry aimed at boosting the economy at a time when the adverse impact of the coronavirus is wreaking havoc across all sectors. The prime minister vowed to open allied industries to strike a balance between economic activities and efforts to contain the pandemic. On the face of it, the logic of incentivising the construction industry is a sound one. It will spur activity across a wide spectrum of sectors, attract investment, generate jobs and provide economic sustenance to those who need it most. The prime minister has been speaking of the benefits of a growing construction industry, and the government’s Naya Pakistan Housing Programme is also aimed at producing such a beneficial effect for the economy. Yet there is a problem.
The announcement is fraught with risks. At a time when the entire world is prioritising lockdowns so that people can stay indoors and away from each other in order to suppress the spread of the coronavirus, the prime minister’s policy will have the opposite effect. By incentivising the construction industry and encouraging it to start its activity, the government is getting people out to work. It is not just a question of those who will be working at construction sites but also all those citizens who work in allied industries who will now be forced back to work. In essence then, the federal government is diluting the concept of a lockdown and asking thousands of Pakistanis to run the risk of either getting infected with the virus or infecting others. This is not just bad policy, it is outright dangerous.
Similarly, giving tax breaks to investors makes sense in certain circumstances, but here the government has essentially allowed people to whiten their black money by investing it in the construction sectors. By all standards this amounts to giving holders of black money an amnesty scheme without the government gaining anything from penalties. This goes against everything that Prime Minister Khan has stood for and it negates his principal argument that the corrupt should not be rewarded for their corruption. The no-questions-asked decision has to make sense within a larger policy construct whereby there is sound economic, political and ethical justification for allowing the black deeds of people to be whitened without any cost at the altar of ill-conceived policies. The prime minister should be cognisant of the fact that, by going ahead with this policy of reviving the construction industry on the terms and conditions specified, he runs a real risk of undermining his own standing as a crusader against corruption. He may want to rethink the move before it starts to take a toll on his politics and on the health of Pakistanis at large.
Capacity payments
A MASSIVE wheel was set in motion last week when the Cabinet Committee on Energy decided to begin the process of renegotiating capacity payments with LNG terminal operators and the independent power producers. Hundreds of billions of rupees are at stake in the process and the move is no doubt going to lead to deep concern among the sponsors of the projects involved. The committee, chaired by Planning Minister Asad Umar, who has only recently taken charge of this crucial committee, made the decision in its last meeting on Thursday to begin the process of this renegotiation which can take up to three months to complete. The reasons given were fairly obvious — to help decrease the burden of power sector payments on the government, rationalise fuel costs and better manage the circular debt. In their initial responses to the idea, the IPPs have said that a contract is a contract, and that they are already so tight regarding liquidity, due to the repeated government failure to abide by its payment terms, that any renegotiation will leave them financially destitute and unable to continue operations.
Over the years, the government of Pakistan has earned a bad name for itself for its failure to abide by the terms of long-term contracts entered into with sponsors of multibillion-dollar projects, but it is not difficult to see that this time it is different. The weeks to come will be some of the most difficult that the country has ever seen, and the question that every Pakistani needs to ask is ‘what can I do to help’. This is not the time to say ‘a contract is a contract’. All the resources of the state are required to shoulder the cost of the struggle ahead, to pay for massive increases in health investment and run social protection programmes for the poor and unemployed that could cost hundreds of billions of rupees every month. Moreover, power consumption has fallen sharply and fuel imports, in price and quantity, have also nosedived, causing capacity payments to climb since they are often indexed on off-take. This is nothing rational or moral about making capacity payments at a time when the state needs its resources for an intense battle against a global pandemic. Without the people, there is no economy, no power consumer, and no payments’ stream. The IPPs and LNG terminal sponsors should understand this.
Digital help
AS the Covid-19 challenge continues to test the limits of healthcare infrastructure around the world, tech giants like Google have rolled out new features with the aim of helping both citizens and governments. Google’s efforts include a crucial SOS Alert that connects people with the latest news and safety tips from the World Health Organisation. The tech company is also active in removing misinformation on platforms like YouTube and Google Search to limit the harm to unsuspecting users on the lookout for ‘cures’ and ‘remedies’. In these unprecedented circumstances, artificial intelligence tools developed by some Silicon Valley companies are combing through coronavirus research databases to uncover new insights into the global pandemic. The role of technology and these platforms in this exceptional crisis is undeniable. Yet the companies at the helm of this technology have a huge responsibility towards citizens.
Google’s recent release of location reports for 131 countries, including Pakistan, is helping health authorities assess if people are abiding by social distancing orders, with the tech giant saying it has published the reports to avoid confusion about what is being provided to the authorities. Undoubtedly, these companies are the gatekeepers of data belonging to millions of citizens across the world — data which is used to generate profit through targeted advertising. For this reason, they must responsibly fight disinformation and aid governments and researchers wherever they can to help the world tackle the coronavirus outbreak. However, they must be cognisant of the fact that sharing any citizen data with governments means treading a fine legal and ethical line. China, Singapore, South Korea and other countries have asked residents to use technology to track their compliance with quarantines, but privacy activists argue such measures can compromise individual liberties. The anonymised geo-tracking of citizens can go a long way in helping governments enforce distancing, but it may also be open to misuse. As some experts have noted, technology can save lives, but if implementation unreasonably threatens privacy, more lives may be at risk.