Pakistan Calling

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Bosses within the telecommunication sector of Pakistan deserve all the laurels that have been heaped on them this past week. But they haven’t done it alone. Of all the experiments our government undertakes, sometimes (just sometimes) it appears they can manage to do things right after all. And as over a hundred million phone users will testify, Pakistan’s telecom industry is light years ahead of even the most advanced economies in the world. But just how did it get here? And did we at any point consider whether this level of success was ever possible? In Pakistan?

First and foremost, recognition for the strides we have made is due to the architects of the modern telecommunications industry who created the optimal regulatory environment for this sector to thrive. Faced with inefficiencies that gave us expensive services and poor customer care throughout the nineties, the government deserves kudos for not only announcing a clear policy on telecommunications deregulation in 2003, but then sticking to it in the years to follow.

Furthermore, by nurturing private enterprise instead of forcing it out, the government created the ideal environment for competition to flourish, and as investment in telecommunications surged, success was inevitable not only because of the wisdom of the policy in itself, but the ability of a lean institutional framework to adapt to a change in direction when it became necessary to do so. And we haven’t fared too badly for it.

If perceptions are any measure of our successes, a recent survey conducted amongst several emerging markets in Asia gave Pakistan the highest ratings for having transparent licensing regimes, spectrum allocation, interconnectivity and competitive practices. According to the 2011 Telecom Regulatory Environment (TRE) survey Pakistan saw an increase in almost all dimensions including fixed market entry, mobile access and mobile inter connection. In 2010 our regulator also received acclaim for being the most progressive Telecom Regulator in South Asia. It’s no surprise then that Pakistan ranked highest for the best regulatory regime among the South Asian countries.

But we didn’t get the highest score of in the TRE survey just because our phone calls and television adverts are becoming cheaper by the day. Indeed, apex regulators such as the Pak Telecom Authority (PTA) are a rare breed worthy of becoming the gold standard for institutional design as worsening economic conditions force the government to find leaner ways to do business.

But the institutional design is just half the secret of our success in this sector. The other half relied entirely on the government’s inability to control the social transformation made possible once we all started making cheap calls. To a large extent, telecommunications got away from the stranglehold of government before it could be throttled, making it at once the beneficiary of what the government did, and what it didn’t do.

For a shining example of how the government weaves society together with one hand only to unravel it with the other, look no further than our energy sector. And scratch the shining part from the last sentence for the only light that has been shed of late seems to come from WikiLeaks’ Pakistan cables. The leaked documents reveal an acute insight into the institutional landscape characterised by a haphazard mix of bureaucracy that cannot coordinate policies due to overlapping and contradictory roles, and much critique of organisational structures that prevent government agencies from operation freely and efficiently in the power sector. .

According to the cables, the unbundling of the power sector has not been successful as it resulted in institutional overload. After creating fourteen corporate entities, three power generation companies, one national transmission and power dispatch company, and nine distribution companies, it appears autonomy over finances and decision making is still non-existent. With a total of six ministries and over forty agencies involved in running the energy sector, there is an obvious need to reassess the usefulness of these organizations and eliminate duplication of responsibilities. But the government seems to have no desire to streamline the energy sector.

Perhaps the government needs to consider that the telecom and energy sectors are both functioning within a uniform system of governance. Yet the disparities between the two compel us to take a closer look at the telecom sector, and tease out the lessons that can be learned by others.

The accelerated growth in the telecommunications sector may have unleashed a social transformation, but it is insignificant compared to what could be possible if we sorted out our energy sector as well. One thing is for certain. We have but to look in our own backyard to see how we have done things right. The task before us now is to replicate it wherever possible.

 

The writer is a consultant on public policy.