Islamabad seems a bit too busy these days. Last week, there was celebration of a circular debt restructuring deal that took nearly six years to finalise. In the past few weeks, Prime Minister Shehbaz Sharif has undertaken trips to two of the most influential and powerful allies and partners.
The latter trip, to Washington, received more press for obvious reasons. His niece in Lahore has undertaken trips of her own. The International Monetary Fund (IMF) is completely engaged, invested, and seems a bit too agreeable these days. The stock market is booming, and the rupee is nicely settled.
But look beneath the surface and tempers start to flare. It took six years for the circular debt restructuring deal to reach some sort of conclusion. In this time, four governments changed hands, and even more finance ministers switched seats. The slowness of policy and its subsequent implementation boggles the mind, especially when one realises that we are perhaps living through the fastest-paced change the world has ever seen. In the past decade, the global economic order has shifted more than ever before. From Covid to regional conflicts to AI, the world has grappled with relentless change.
Why is this relevant for Pakistan? The answer is simple. The clichéd call for consistent policymaking no longer holds. What is now required is agile policymaking. When Pakistan introduced the net-metering regime, the prevailing price of solar panels justified the incentives. But, as mentioned earlier, rapid global shifts have changed the equation. The net-metering framework no longer makes sense in its current form. Pakistan’s response? Policy changes were suggested, even brought to the table. The result? Instead of agile reform, files were allowed to gather dust.
There is no doubt that Pakistan faces a crisis in its energy sector. Tariffs have started to come down, but for one simple reason: a favourable exchange rate and some global stability in energy prices. Remove either from the equation, and Pakistan will once again scramble like a headless chicken to find a solution.
The argument being made is straightforward: any government can introduce policies and soon realise they are not working. What matters is how quickly those errors are corrected. Agility, the speed with which change is implemented, is what marks the difference between failure and turnaround. Ask any business, and they will say that the more agile they are in adapting to fast-changing environments, the better they can protect their bottom line. Imagine if Pakistan’s military response to India had lacked agility. You do not even want to imagine that.
But from an economic policymaking perspective, Pakistan does not believe in agility. For decades, the auto sector needed competition. It took one decent policy to introduce more players and expand competition. It was simply bad luck that the market size did not grow as expected, but Pakistan was never blamed for its policy on that front. In other cases, especially the power sector where agility is essential, implementation is nowhere to be seen.
The answers are available and workable, but perhaps other factors are at play. Either way, the public continues to suffer. Grid consumption is falling. The Debt Service Surcharge (DSS) continues. Now imagine falling battery prices, a very likely scenario in the near future, and you are left with idle capacity.
You want to pursue the privatisation of DISCOs. How about also pursuing the implementation of policies that are staring you in the face?
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