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ISLAMABAD: Former Special Assistant to the Prime Minister (SAPM) on Power and Petroleum Tabish Gauhar has said that unchecked “sniper attacks” from within the government itself only contribute to further logjam in the decision-making process and an unwillingness to think and act “outside the box”.

Sharing his reflections of one year of public service on twitter and with this correspondent, Gauharm who resigned as SAPM on September 13, 2021 after reportedly developing differences with his Cabinet colleagues on incentives for refineries at the CCoE, mentioned the prevalence of the “Establishment” mafia within the “Deep State”, fear of NAB, rent seekers, lack of policy consensus within the government, media and apathy of bureaucracy in decision making.

Gauhar, who was initially appointed as SAPM on Power, stated that the energy “problem” of Pakistan is complicated, yet, widely analysed. Sectoral experts interested in specific, technical solutions may already have seen his internal letter of July 23 that was written in “good faith” but was somehow leaked and unnecessarily rubbed a few people the wrong way, he contended.

According to him, the letter contained nothing extraordinary or novel and when he first met the PM in September last year, he told him that he did not need more Advisors, because they are a dime a dozen, everyone already knows what needs to be done, and what’s actually required are hardcore executioners duly authorised to do the needful.

Tabish Gauhar resigns as SAPM on Power and Petroleum

He further stated that an average consumer of electricity or gas needs a reliable supply at an affordable price, and a satisfactory level of customer service. The government’s role is not to pick winners or losers but to formulate the right policy and regulatory framework and provide a level playing field for private sector participants which implies the State must/should prevent collusion, price manipulation, artificial shortages, etc. through effective regulation, and maintain the tools and ability to “intervene” as and when required to handle volatility - just like the Central Bank occasionally does to manage the dollar/rupee parity.

For instance, he said, there is no reason for any Prime Minister to officially set petrol and diesel consumer prices every 15 days. With multiple buyers and sellers, why can’t this be determined by the sector participants (Oil Marketing Companies (OMCs), refineries, traders) on the basis of demand and supply, via an energy commodity exchange?

He gave examples of PSO (a majority state-owned company) setting the pricing benchmark as the largest player, the government intervening through its strategic petroleum reserves to manage occasional supply volatility and providing targeted subsidies as per its socio-economic policy, and OGRA and Competition Commission of Pakistan acting as vigilant regulators.

Gauhar argued that to implement the structural reforms, however, requires a government with strong political will and ability to relinquish centralized executive power - at least in the energy sector.

“Whilst everyone laments the vested interests, and so-called “mafias”, allegedly resisting such structural reforms, I found the lack of policy consensus within the government to be the biggest culprit,” he said, adding that “once we enter campaign season for the 2023 general elections, it will become even harder to take any bold decisions regarding such essential reforms. Sooner or later, though, I believe that deregulation /decentralization is the only sustainable policy prescription for any future government.”

Gauhar argued that unless a newly-elected government hits the ground running on reforms, Pakistan’s existing 5-year electoral cycle is not conducive to long-term structural changes that often suffer from “growing pains” and do not involve “ribbon cuttings” for public applause. The elusive political consensus on key sectoral issues such as the weighted average cost of local and imported gas has been another missing variable in the art of deals.

Incentives for refineries not approved by CCoE

A case in point is the huge reluctance in Islamabad to allow the provinces a front seat role in co-owning and co-managing the loss-making federally-owned power distribution companies.

“We just cannot efficiently run, say, Sepco from Islamabad! And of course, political interference in our utility companies on transfers & postings continue unabated, however much the PM might discourage it,” he continued.

According to Gauhar, trying to structurally reform a sector as sensitive as energy under the constraints of an IMF program that too amidst a pandemic-induced economic slowdown, is a tough balancing act. Several politically difficult decisions (such as the elected government ceding control to the independent regulator to automatically notify consumer tariffs) had to be taken as “prior actions” to remain in the IMF program, and to qualify for continued funding from the likes of World Bank. However, the multilaterals’ uncompromising insistence on reducing subsidies and increasing tariffs will soon face the reality test in Pakistan.

“It is an affront to any country’s sovereignty to plead with foreign bureaucrats on the timing and quantum of tariff increases but we, as a nation, let them in to do our own dirty work and heavy lifting. Rhetoric aside, negotiating from a position of weakness is never easy and unless we are willing to walk away, and pay the consequent short term economic price, our leverage is rather limited. We will any how find out soon enough,” he said.

He further stated that much is said and written about our federal bureaucracy being a major impediment to reforms and the government’s progressive agenda. He maintained that for the politicians, it’s often the “Baboos” that are overtly or covertly responsible for subverting the people’s will, in league with some nebulous “mafia” operating within the Pakistani “deep state”.

“Whilst such paranoia may have some justifiable basis, I had the opportunity to work closely with some of the finest and most dedicated civil servants produced by our system. People of integrity, extremely intelligent and diligent, putting in long hours (including weekends), often taking big decisions and risks without any assured support from the system, and yet, often belittled by their political bosses and the public at large,” he said, adding that we should not paint the entire bureaucracy with the same brush, because the bureaucracy too reflects our society’s ethos, and Pakistan needs many more professionals to join the civil service as a matter of first choice.

In his opinion, public sector companies’ bosses have done far less damage to Pakistani economy than the well-known private sector rent seekers who extract their pound of flesh from the exchequer by exploiting their unfettered access to the corridors of power in Islamabad, to this day.

Talking about media, he said, the role of media (TV, print, and social) in any democratic society cannot be overstated. But in Pakistan’s “free-for-all media environment” with an army of armchair “experts” pronouncing judgements on the decisions and motives of the public office holders, it can be a force for both good and bad. It is now conventional wisdom to judge all executive missteps with a 20/20 hindsight lens, as either borne out of ineptitude or corruption.

Copyright Business Recorder, 2021

Comments

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Rana Altaf Oct 03, 2021 12:30pm
The policy should be controlled by Govt. His version of deregulation is a mafia demand I believe. However, the only solution for the Government to shut down all LNG and Imported Coal Power Plant and move to Local Thar Coal energy solution. The LNG importd or contracted be used for Fertilizer and Textile `Industry plus Demestic Consumers. Further Bunder Island project can be link to Thar by Train and Steel Industry be established in Thar as China is closing its steel industry but in Thar Coal and water when mining is done the water is extracted and electricity is available in limitless which can meet all the international demand of steel. So this extracted water can bring a billion tree revolution in the Thar and you can also say it a green revolution with coal
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Rana Altaf Oct 03, 2021 12:33pm
Further, this can make current account balance into surplus for every and all the vehicle can be converted into electricit and no petrol import is required for future. This can be achieved in two years time frame. When there is surplus balance of payment then there is no inflation as the currency will not fall. So, Thar is the Source of Revolution and make Pakistan Prosporus.
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Rana Altaf Oct 03, 2021 02:52pm
The Existing Coal Power Plant can also be relocated to Thar and LNG Plants recently permitted be closed and discontinue reset assure the LNG Price which is sky rocketing will never fall. Further coal prices are also sky rocketing which were are importing and paying huge amount of foreign exchange. This will make our balance of payment surplus, the rupee will be strong and prices of commodities will be start falling as our rupee get strong as our rupee get stong. The inflation will be reversed. The cosumer / poors will be happy because they will get every thing cheap. The voter will be happy and PM will always win election.
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Usman Oct 04, 2021 01:44am
It's not the Government Business to do Business means that the Government Should Privatize all State Owned Enterprises and create a healthy Competition in the form of Deregulating all Sectors like the Deregulation of Telecom industry.
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Amjad Oct 04, 2021 02:42pm
Agreed there is no quick fix to the energy woes and secondly vested interests sitting each milimeter of the way.
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Rana Altaf Oct 04, 2021 07:41pm
I would add here that this is price time to sell the Steel Mills as China is closing its steel industry and price of steel is sky rocketing. These 3 months are best time or blessing in disguse for Pakistan to sell the steel mill. Any one who will purchase it can get a pay back period very short becuase the Iron Ore price is at bottom and there are time time increase in steel prices. This the most profitable asset for this time for investors. The Govt should move very fast to get the things done because every day is very important.
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M M Alam Oct 06, 2021 06:35am
@Rana Altaf, Agree with you. The age of fossil-fuel abundance is dead. Dwindling investment in oil, gas and coal worldwide means high prices are here to stay. We are emitting a fraction of CO2 vis-a-vis OECD countries. Best time to invest in Thar was yesterday. Even today is good enough. Energy crisis in UK , China , India are cases in point. We can worry about global warming later, when we survive the energy crisis. Time to go for Thar cosl is now or never.
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