What ruling should a donor agency give a country with crippling energy shortage, cheap exports, expensive imports, dysfunctional tax collection machinery and hemorrhaging public sector enterprises? There’s no novelty in ADB’s annual development outlook. Yet listing Pakistan’s problems as they stand, its complicated web of debt, deficits and corruption, is a sobering reminder that minus IMF partnership, other bi- and multi-lateral agencies will no doubt distance themselves from Islamabad.
And here’s the simple thesis. Persistent energy shortage has shaved a good three to four percentage points off the GDP number in the last couple of fiscals, hence the compromised growth rate. The bank’s prescription – investment – is no doubt the right medicine, but energy problems (among other things) rule out foreign interest, while government borrowing does a good job of crowding out indigenous initiatives. And of course, the country needs a business plan. Which brings us right back to energy, without which any plan will be words on paper at best. There’s also mention of PSEs losing untold billions with nothing to show. Yes, that too must be checked.
The government’s version is a lot less imaginative. First we inherited a broken down energy sector from the previous government, then vicious floods wreaked havoc on the GDP number. Just why these constraints failed to prevent the finance minister from boasting ambitious targets at the last budget, or how natural disasters keep political appointees anchored in PSEs is, and will remain, without answer. Now, so close to the next general vote, it is foolish to expect movement on anything that might upset party cadres, so we can forget about checking leakages. Yet the energy problem will pose a big question when people go to the polls. For some time now general elections far and wide have been vote-out events instead of vote-in features. Failing to get a handle on persistent power failures, the election is as good as lost. So something might just get done there. Did the ADB mention that?
