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EDITORIAL: A Business Recorder exclusive reveals an impending power crisis projected at 3000MW from 29 June to 5 July due to: (i) shortage of re-gasified liquefied natural gas (RLNG), an imported fuel with Engro seeking dry docking of its LNG terminal and therefore not having booked the required cargo for one week though the cabinet committee on energy has yet to approve this proposal; in addition National Power Control Centre has demanded supply of 900MMCFD with 300MMCFD still not assured by the Sui Northern Gas Pipelines Limited; (ii) furnace oil stocks insufficient to meet the shortfall; and (iii) water shortages with the government considering diverting water from agriculture to the power sector that as per the Indus River System Authority requires approval from the Council of Common Interests (CCI) which was convened Monday indicating that the government appears to be fully aware of this impending crisis. Disturbingly, even if the available appropriate mitigating measures are taken, negative implications productivity - be it on agriculture, or industry - during that one week are likely; apart from the suffering caused by load-shedding on the domestic sector.

Covid-19 vaccine shortages have surfaced with centres closing down throughout the country as supply dwindles. Notwithstanding the efficacious role played by National Command and Operation Centre’s (NCOC’s) daily briefings and subsequent decisions as well as its exhortations to the general public to get inoculated there has been a dearth of vaccine doses and less than one percent of the country’s population has so far been inoculated. True, there is a global shortage of the vaccine with poor countries with limited resources, Pakistan is a case in point, having limited wherewithal to import sufficient doses to cater to its population yet there is an urgent need for the government to work with the private sector to ensure availability of the vaccine.

Pakistan Bureau of Statistics (PBS) data indicates that the share of food items in the total import bill rose to a historic 6.899 billion dollars year-on-year during July-April 2020-21 – a rise of 53.93 percent compared to the same period of 2019-20. The major culprits were sugar, wheat as well as edible oil imports with palm oil international prices witnessing a significant increase accounting for a growth in value of 36.4 percent. The government’s response has been to point out that output of all major crops increased this season, barring cotton, and that this would ensure lower imports and domestic prices. Sadly, in Pakistan market imperfections persist and the government’s efforts to proactively deal with these imperfections have so far not borne fruit in spite of the findings of the inquiry report on sugar and wheat which came as no surprise to anyone. In addition, the role of aarhtis (middlemen), that act as a bridge between the poor farmer and the market, is well known and prompted Finance Minister Shaukat Tarin to pledge interest-free loans to poor farmers that would enable them to purchase fertilizer, pesticides and other inputs through a syndicate of banks and microfinance institutions with the over-arching objective of breaking the generational bond between the aarhtis and the farmers. In this context, it is relevant to note that previous administrations had also introduced interest-free loans to poor farmers, which were hijacked by the rich landlords but one hopes that as a banker Tarin would know how to reach the target group and make this policy a success where it had failed in the past.

A government is required to take not only appropriate measures to forestall shortages but must also ensure that they are made in a timely fashion. It is the proliferation of such shortages that continue to plague the Khan administration with severe repercussions on the kitchen budget of households as well as on the productive sectors and are the reason why questions continue to be raised on the government’s capacity for good governance and a penchant for mismanagement three years into its tenure.

Copyright Business Recorder, 2021


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