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Why do you think the only thing to come out of emergency cabinet meetings – to do something about these protests over inflated electricity bills, of course – is the same old option of letting poor, wretched, protesting consumers pay in installments? It’s because that’s all they’ve got.

You don’t really have to be a power sector or even government policy expert to understand that the caretaker setup has zero leverage here. It could, for example, provide immediate relief – subsidies, tax/levy cuts, etc. – but even if it has the constitutional cover to do so, it would be at the cost of the IMF bailout program and a much worse fiscal crisis, complete with hyperinflation, worse unemployment, possibly default and bigger and bloodier protests just around the corner.

It could go a step further and mobilise the finance ministry to make up for power sector relief by putting the squeeze elsewhere; getting more creative with indirect taxes, for example. But, even if the Fund agrees, what good would it do to cajole angry protesters back to their homes only to force them onto the streets again with a vengeance and an added sense of betrayal?

Or it could simply admit that it’s helpless in all this, that it has no policy space because of the ironclad agreement with the IMF – how do you like the SBA (standby agreement) now? – and factor in whatever harm protesters will do to themselves, their electricity bills and the country as a necessary correction, in market lingo, as the caretaker setup focuses on its number-one assignment – holding elections.

Right now, though, it can do nothing at all because something gave the information minister (read government) the idea that a phone call with the IMF would provide a roadmap to relief “within hours”. Now it must first wipe the egg off its face and follow protocol by submitting its request in writing, then wait for the Fund’s board to find time to fit it in its agenda, and then wait longer yet for a (most likely) rejection.

Meanwhile, barring a miracle, the deadline for August bills will pass next week with most protesters having already burnt theirs after blocking roads and cursing the government. And if authorities feel that getting the IMF to agree to payments of the same (inflated) bills in installments will count as a win, then it’s just not reading the pulse of the people correctly.

This sort of implosion at the very bottom of the food chain occurs not when the average Joe doesn’t want to pay exploitative taxes any longer – everybody’s helplessly suffered all the corruption and mismanagement since forever – but when he/she/they simply cannot. That’s why layering the bills is a non-starter.

This space has repeatedly cited three statistics to warn of a furious mob revolt that these bills might just have triggered. Of the 195 countries in the world, Pakistan stands at number five in terms of population and counts in the top then in both poverty and illiteracy.

This is a very toxic mix in the best of times, but when you have record inflation and unemployment, threatening sovereign default the minute a harsh IMF program is suspended, you don’t need more than a cursory knowledge of history to know that even a small spark can light a very big fire of public discontent.

Especially when there’s so much discontented public (5th largest in the whole world), most people are poor and hungry, and they’ve started to (literally) run out of money.

This is just a case of the state never being able to, nor interested in, putting two and two together. It’s the fruit of an oppressive, parasitic social/political structure built around a cocooned, untaxed and undertaxed elite, too used to making up fiscal shortfalls by further taxing the already taxed, expecting the honest to forever pay for the theft and corruption of the dishonest.

And now it’s run its course. The elite is powerful and protected, but much smaller in number than the hordes that were first forced to pull their children from school, then struggled to put two square meals on the table, and now have no money to pay their bills; with nothing to suggest that anything will get better for any of them anytime soon. Soon, inevitably, some of them will begin to starve, as will their children, and that’s when no amount or manner of top-level assurances will be able to put a lid on protests, which will grow incrementally venomous.

The demonstrations over electricity bills, in clichéd terms, are just a symptom of a much deeper anger. Expect more poor people – who’re ordinarily too tied up to waste precious time protesting on the streets – to spill out when petrol prices jump again shortly. The poor have run out of money as well as options. The only thing left is revolt.

And so it begins.

Copyright Business Recorder, 2023


Comments are closed.

Sabir Aug 31, 2023 09:58am
Nature always takes its course and makes corrections in its own way if we don't do it amicably.
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Tariq Qurashi Aug 31, 2023 10:29am
Shahab has painted a very scary picture, but I suspect an accurate one! As a nation we have "cried wolf" so many times that people have become skeptical, but in this case I think the wolf is really at the door!
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Taimoor Ashraf Aug 31, 2023 10:46am
1993. IPPs. Benazir Bhutto's government. End of story.
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Arif Aug 31, 2023 11:18am
IMF is not the bogeyman. Blame those who sign power agreements which are not actually Government bonds with 17-25% return , that too in USD . Better to default and renegotiate everything.
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KU Aug 31, 2023 11:39am
And still, the West Pakistan Company will not take any steps to curb the perks and privileges of the Raj servants nor stop electricity and gas theft. Successive governments have lied through their tenures and enjoyed the corrupt-fest with legal cover. The people with naive political loyalty do not realize the heist that they suffered at the hands of their leaders and continue to do so. The recent news of the import of 9 lac tons of wheat import from Russia, in the next few months, should be a slap on the face of the liars who professed bumper wheat yields this season, but knowing their shameless status, it won't have any impact.
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zaya zaya Aug 31, 2023 11:56am
This country has no expertise in negotiations internally or externally. This painful outcome will fix their brains if ever there was any in the politicians and bureaucrats, who have been giving the Golli for decades to the people of Pakistan, and who themselves have been in a trans for 76 years electing this class of people and believing in them. Thank you Shahb shb for being honest!
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Fatima Sep 02, 2023 04:32pm
Allah will provide
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It begins…

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