Energy issue represents an opportunity for reforms

Pakistan's decision to begin raising oil prices this week by an unprecedented margin brings a few issues to the forefront.

The government's decision to end subsidies for different types of fuels marks a major step forward in sharply reducing the budget deficit.

But the risks from such a move are equally higher. Pakistan has been in the grip of an unprecedented rise in inflation during the past year, with food prices rising faster than ever before. Equally profound has been the increase in the price of a host of other commodities.

The average Pakistani household still finds itself badly stuck in the midst of high inflation on the one hand and increasingly few opportunities on the other. While the government has moved to hike fuel prices, it shows no signs of tackling other key challenges, notably the need to curb its own expenditure.

According to Qaiser Bengali, one of Pakistan's most respected economists, the government could end up saving at least Rs100 billion ($1.47 billion) just be scrapping organisations that serve little purpose, and by eliminating overlapping functions performed by more than one official body.

The challenge for the government as it grapples with a difficult time is indeed two-fold. On the one hand, the government needs to demonstrate that it is willing to tighten its own belt just at a time when it expects Pakistan's mainstream population to accept the stark reality of increasingly difficult times.

This is indeed a significant challenge at a time when Pakistanis have been exposed to consumerism in the past 10 years in a way never experienced before. Going forward, many Pakistanis, even from limited income groups, would yearn to emerge on top of and continue with this culture of consumerism.

Conservation

On the other hand, the new government must also intensify its search for alternative ways to economise on the use of energy. For too long, successive Pakistani governments have time and again practically failed to oversee a robust approach towards conserving energy use. Consequently, wastages have been taken for granted.

To quote one of the most glaring examples, the Water and Power Development Company, or WAPDA, by some estimates, oversees a loss of up to 40 per cent of its electricity stock, just through the phase when it is transported through the national power transmission system.

The principal issue, however, is also the quality of government that rules over Pakistan today. This is a vital matter in terms of assessing the quality of a government and its ability to tackle mounting challenges.

Pakistan is unfortunately once again ruled by a regime today that has yet to demonstrate its ability to conceptualise and undertake reforms in an unprecedented way.

The new government must demonstrate its ability to turn the corner by undertaking reforms of the kind that begin making a difference.

But the assessment of Pakistan cannot be and must not be de-linked from the prime objectives going into the future. The country's best interests require a careful assessment of the ways in which these profound challenges are to be met. Pakistan's future can not be secured without first securing the best interests of its people.

The issue of energy prices amply demonstrates both an opportunity for carrying out a series of unprecedented reforms and the example of a fundamental dilemma. The eventual resolution to this challenge holds an essential key in laying out the course for Pakistan's future.

The writer is a journalist based in Pakistan.