Daily Times

The PML-N government has succeeded in satisfying the IMF in the review meeting in Dubai, thereby getting the much needed third tranche of $ 545 million of the $ 6.5 billion loan pledged to Pakistan. However, whether the PML-N has succeeded in satisfying people at home does not seem much of an issue for the government. The IMF is happy with the country’s growth prospects on the basis that the GDP has grown by 3.1 percent compared with 2.8 percent last year. They are confident that the government, if it keeps to its present course, would be able to mend its finances and plug the holes in the tax net. The jury is out whether this is simply wishful thinking. The IMF would be happy because the conditionalities they have attached to the funding have been accepted. The energy problem that the finance minister has described as solved or on the way to being solved, still afflicts people back home in the form of load shedding. Dar informed the IMF that the country is no longer facing unannounced load shedding. Further, that the electricity distribution companies are being made efficient to cut back on line losses. He surprised many by saying that his government is making laws to stop electricity pilferage. Is this what the reality is?

The reality is that the country is in a far deeper mess as far as the energy crisis is concerned than it was during the PPP-led government. The PML-N government had perhaps played on the sentiments of the people of Punjab, especially Lahore, during the tenure of the previous government by claiming that the province was being subjected to discriminatory load shedding. The 1,700 MW added to the national grid that the PML-N government boasts of is in fact the result of the previous government’s projects. The reality is that the government has succeeded to get the third tranche from the IMF not through economic growth as such, but by saddling the common man with more financial burdens through increasing the prices of electricity and reduction of subsidies. According to reports, the government has agreed with the IMF to withdraw subsidies completely other than to consumers using less than 200 units per month. The silence the government has adopted while raising the electricity tariffs and in agreeing to the policies of the IMF will redirect the anger of the people towards the PML-N come summer, when inflation generally and load shedding coupled with high electricity tariffs will draw protesting crowds onto the streets. If subsidies do have to be withdrawn, this should be done as gently as possible, relying more on changing the energy mix to a more affordable one, rather than attempting to do away with subsidies overnight. Too rapid a withdrawal of subsidies will increase the already considerable problems of the citizen, trade and industry. *