Gas price increase
BY raising gas prices by up to 113pc for six months, the coalition government has implemented another IMF-mandated prior action for the resumption of its stalled bailout package. Even if the hike had not been ‘imposed’, an increase in the rates would have been inevitable to save the two gas companies from bankruptcy.
The increase — to take effect from last month — will help the government recover Rs310bn from consumers in the second half of the current fiscal and slow down the build-up in gas sector debt. Another rise in gas prices is expected from July.
If the gas sector’s long-term sustainability is to be ensured, the authorities will have to move beyond periodic hikes in prices to linking gas rates to the global market. Indeed, this will be tough for both the industry and residential users of the piped fuel because it will involve the removal of massive, unsustainable subsidies.
But it is time that a quarter of Pakistani households connected to piped gas stopped their wasteful and inefficient usage while the rest of the population, mostly low-income people, are forced to use more expensive alternatives to cook and heat their homes.
Likewise, exporters must move to higher value-added exports rather than blackmailing every government into subsidising their inefficiencies.
Such a step should also help the government move towards the goal of uniform gas pricing nationwide, eliminating the cost advantage to Karachi-based textile and other export industries over their counterparts from Punjab and upcountry.
Pakistan’s economic issues are long-standing and their solutions — though tough — known to everyone. However, it is unfortunate that no government has ever had the political will to sort them out.
Whatever half-hearted ‘reforms’ successive governments initiated were implemented under pressure from international creditors. This has brought us to a situation where the global rating agency Fitch has downgraded Pakistan’s long-term foreign currency issuer default rating to ‘CCC-’ from ‘CCC+’, citing further worsening in liquidity and policy risks along with pressure on reserves.
The drop comes four months after Fitch revised down the ranking to CCC+. It said the downgrade reflected a sharp deterioration in external liquidity and funding conditions, along with the decline in foreign exchange reserves to critical levels.
The agency assumes a revival of the IMF programme but doesn’t rule out “large risks to continued programme performance and funding, including in the run-up to this year’s elections”. In its view, a default or debt restructuring is an increasingly real possibility as the country’s reserves drop to less than three weeks of imports.
With Pakistan’s credibility at its lowest point and the ruling elite showing no sign of a desire to change their lifestyles, it is foolish to expect the world to bail us out. Why should it unless we are willing to take substantial measures ourselves?
Published in Dawn, February 15th, 2023
Code of conduct
IT is telling of the vitiated state of Pakistan’s present-day politics that even outlining a bare minimum ‘code of conduct’ for our politicians, along the lines of what has been proposed by PPP chairman Bilawal Bhutto-Zardari, seems like a monumental challenge. To wit, the proposed code of conduct is meant to ensure that the political parties “do not cross the line while confronting each other”. The PPP plans to invite the PTI to join its discussion, even though an earlier effort to mend fences through a multiparty conference on Pakistan’s outstanding issues fell flat on its face. The idea is undoubtedly a good one, but it is doomed to fail in an environment where the government and opposition have no trust in each other and view every step taken by the other with deep suspicion. Though former prime minister Imran Khan had personally declined to attend the MPC, the PTI was still open to sending a delegation of other leaders with a little mollification. Instead, the government left it embarrassed after it ended up cancelling the event without offering any reason. In that context, it is unsurprising that the opposition party is already distrustful of this latest overture from another government party.
As Mr Bhutto-Zardari outlined his initiative, he noted: “If every party decides it will neither play nor allow others to play, the nation will be the ultimate loser.” This is hardly a revelation. However, our two recent governments — the incumbent, of which Mr Bhutto-Zardari is a part, and the preceding, led by the PTI — have demonstrated this reprehensible tendency with equal zeal. The PTI used to be widely criticised for abusing its powers and persecuting opponents through sham cases. The PDM government has proven no better. It has chosen the same despicable path of using the state machinery to browbeat political opponents. It has also shown a willingness to disregard the law in its desperation to cling to power, much like the PTI did towards its demise. If the country is to move forward from their mess, this will only begin with an acknowledgement that the way power has been exercised is fundamentally wrong. As the parties in power, the PDM and PPP have a greater responsibility in this regard. Will they rise to the occasion? Despite being considered the ‘mature’ parties, they have disappointed quite thoroughly thus far.
Published in Dawn, February 15th, 2023
‘Seditious’ utterances
THE PDM government appears hell-bent on clubbing its opponents, particularly those belonging to the PTI, with the big stick of sedition. The latest political figure to face charges of making ‘seditious’ utterances is former finance minister Shaukat Tarin.
The FIA on Monday filed charges against Mr Tarin based on audio clips leaked in August in which the former minister is allegedly heard advising the then PTI finance ministers of KP and Punjab not to return surplus funds to the centre in order to sabotage talks with the IMF.
Shaukat Tarin claims the clips have been ‘tampered’ with. Other PTI figures who have recently faced the sword of sedition include Fawad Chaudhry, Shandana Gulzar, Azam Swati and Shahbaz Gill.
The loose application of the sedition law, particularly to silence opponents, needs to stop. Mr Tarin’s comments — if proved to be true — were indeed highly inappropriate. He should have known better than to recommend undermining talks on such a sensitive issue, considering the fact he has served in government multiple times.
However, bringing these indiscretions within the ambit of sedition is simply absurd. A parallel investigation also needs to take place probing who bugged the former minister’s phone.
The fact that intelligence agencies, military and civilian, are listening in on private conversations is unsettling. Though it is true that, when in power, the PTI hounded its political adversaries by using the same unseemly tactics, the politics of vengeance and retribution must come to an end. All stakeholders need to step back and work towards bringing civility to politics.
The rapid-fire filing of cases against opponents needs to be done away with, especially on such grave charges — before the practice turns into an endless loop of revenge.
Moreover, the sooner the sedition law is done away with, the better, as rather than containing anti-state activity, this odious legislation is used to keep critical voices in check by both civilian and military rulers.
Published in Dawn, February 15th, 2023