This is apropos a letter to the Editor ‘Power transmission as ‘service’’ carried by the newspaper on Wednesday. There’s no doubt that the federal government would never have agreed to this arrangement if the World Bank hadn’t put its foot down.
And since we’ve finally reached the point where no manner of progress is possible unless it is lubricated by foreign exchange provided by these institutions, the government and its agencies no longer have any choice but to play along.
The ongoing back-and-forth with the IMF (International Monetary Fund) for release of the remainder of the EFF (Extended Fund Facility) money is a similar, though more complicated, issue. Even things like central bank independence, market float of the rupee, and an end to ad hoc tax cuts and subsidies have had to be forced out of the government; delaying inevitable reforms and making them much more painful than they had to be.
Nobody needs to be reminded, least of all the federal government, that the power and its inefficiencies and losses, not to mention the circular debt, are among its biggest problems.
And institutions like the World Bank will simply stop throwing hundreds of millions of dollars into it if the government itself is non-serious about reforms that cannot be pushed any further down the road. So far we’re still struggling with the basics, like misrepresenting power transmission as a good instead of a service and misallocating tax revenue breakdown. Things will work and move much faster if there is more seriousness at the very top.
Hopefully, the government’s latest interactions with the Bretton Woods twins would have removed any doubts, if some still persisted, about being shipped out of their lending regime if it didn’t shape up. The IMF bailout is already in peril and if things don’t change projects funded by the World Bank could also disappear.
Yasir Khan (Islamabad)
Copyright Business Recorder, 2023
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