Misdirected anger?

EDITORIAL: Authorities will have to be very careful about how they handle the turbulence created by the protests over electricity bills.

First of all it is crucial to understand that these are nothing like the political rallies and protests that the country has got used to over the last few years.

Uprisings like these, instead, erupt when the most vulnerable lot that languishes at the grassroots runs into existential trouble. And that’s exactly what has happened to far too many Pakistanis at once as their electricity bills for the month of August suddenly bloated so much; in some cases exceeding the incomes of entire households.

There’s no question of allowing anybody to disrupt the public’s peace, block roads and destroy property, of course, that is why it is extremely important for the state to intervene very seriously and strongly in a number of ways. And as it rounds up those that have crossed the line, it needs to be quicker and a lot more transparent about the nature of the problem and the timeline to improvement, if any is at all possible. It also needs to be explained to the people as to who is really responsible for their suffering.

Reports of protests outside the offices of power distribution companies and harassment of some of their workers have led the K-Electric, the only integrated power sector entity that generates and distributes electricity to clarify that power distribution companies have a very strict and regulated working environment and they have nothing at all to do with setting electricity tariffs, which is the domain of the sector regulator, Nepra (national electric power regulatory authority) and the government of Pakistan. Therefore, by directing their anger towards these outfits the people are actually protesting in the wrong manner and in the wrong direction.

In fact KE, a private entity, does not even enjoy government cover in losses that add to the circular debt. Hence it has no contribution to the build-up of the massive circular debt in the power sector.

People must no doubt push the government to address inefficiencies and corruption and plug leakages in loss-making Discos, but making life difficult for their workers, if the government does not provide immediate relief, is not the right way to do it.

Just last year the government raised taxes twice, following IMF’s (International Monetary Fund’s) conditions to trim the circular debt, yet the debt still increased, leaving the people that much worse off with nothing to show except bills that a lot of them can no longer afford to pay.

Right now the country is going through a transitional caretaker setup, but all leading parties must be well aware that whoever wins the next election will have to focus on this issue as soon as it takes charge. They also know by now that merely tightening the screws on existing taxpayers is a self-defeating policy, and until the problems in transmission and distribution, especially unchecked theft and corruption, are checked, the debt is only going to bloat further, and electricity bills along with it.

Meanwhile, authorities will also have to do something about public sentiment, which is expected to get incrementally worse considering rising inflation, unemployment and interest rates with further upside will continue to raise temperatures in the coming months. This is going to be very difficult because the one thing needed to calm nerves in such times – fiscal space – is the one thing that the government does not have.

The nearest prospect of fiscal stability is months away – that too if the standby agreement is successfully completed. Till then belt tightening will be the order of the day. It is now up to the caretaker government to find ways of keeping households and businesses solvent enough to survive.

Copyright Business Recorder, 2023