It is not circular debt, stupid!!

Don be fooled by the meetings, committees, reports and more meetings. None of them is going to solve the energy crisis that is fast turning into a big devil. After hours and hours of loadshedding, riots and political bashing, the government found respite in the expected safe haven of addressing the circular debt through more money injection - Rs400 billion in the latest case. There is no doubt that power generation will considerably improve following the massive money injection in the system which would ease off the inter-corporate circular debt. Will Rs400 billion eradicate the root causes of the energy crisis? The answer is a big o. This is not the first time that the government finding its back to the wall has decided to seek hide in dealing with the effect and not the cause. Multibillion rupees had been issued previously as well, hoping against hope that it would solve the problem - but it did not and the circular debt stock is as fat as it was three years ago - nearly Rs300 billion. Recall that the government had been under the IMF programme for most of its tenure and still it could not comply with the Funds requirement of revamping the power sector, of which eradication of the circular debt was a major task. Merely clearing the stock for a short run and resting on hopes has not done the trick in the past - nothing suggests that the result would be any different this time around. What is even more worrisome is the fact that Pakistan does not find itself under the IMF arrangement anymore, which gives it even more leverage to toy with the power sector. That the circular debt stock will be back to humongous proportion is beyond doubt, as tariff rationalisation will undoubtedly take a back seat now when the IMF sword does not hang anymore. The thing to understand is that the circular debt is not the real problem - it is a mere consequence of graver issues that have largely been left unaddressed. It is not that the government is unaware of the problems either - it is just that it does not have the political will to take tough decisions. The solutions are well-documented too, the Energy Expert Groups recommendation report is a testament to that, but it appears that the report is tasting dust in the cupboards of the power ministry. The government needs to deal with the inefficiencies in the system, which range from the inefficiencies in the power generation system, the infrastructural loopholes, the obsolete bill collection system and non-payment by government entities. The sooner it happens; the better it will be, or else Pakistan will see another round of massive loadshedding, riots, meetings, PIB issuances and the show of triumph - strictly in order. Raja Pervez Ashraf infamously made public statements in his days about eradicating loadshedding within six months and he made a mockery of it. Naveed Qamar was heard making statements on nearly the same lines that after this step (money injection), loadshedding will end. And horses can fly.