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K-Electric tariff
Editorial July 17, 2017
Nepra did the right thing to ignore the pandemonium. Now it must do
the right thing once again when deciding the tariff. And the right
decision is the one that puts the public interest ahead of the private
interests of the investor. K-Electrics present management has skilfully
presented its arguments in a way so as to argue that its interests are
the publics interest. Strictly speaking, whether or not the utility is able
to finance future investments under a given tariff regime is of no
interest to the consumer. It is a little disingenuous of private-sector
parties to argue that their future revenues somehow embody a public
interest. The tariff should indeed be performance-based, as the
management is arguing, and not contain guaranteed returns, since the
companys business includes distribution, and it should be incentivized
to raise efficiencies. That is where the revenues to pay for future
investments should come from. When deciding the matter, Nepra must
recall its role as the voice of the public interest, and keep that as its
fixed point in the determination. Whether the present investors can
offload their shares onto another purchaser under the new
determination, or future investments for system upgradation should
not be a matter to burden the public with.
Understanding CPEC
Shahid Kardar July 17, 2017
It can be argued, with some justification, that beggars are not choosers
and these loans are on terms that are the best we could hope for under
present conditions. But, if indeed they are (although warped domestic
tax structures and distorted priorities make it difficult to raise and
allocate resources for such investments) why are the details not in the
public domain as is usual these days even in the case of a hitherto
secretive institution like the IMF?
The cost per megawatt of these coal-based power plants has also not
been shared to enable a comparison with international standards. This
is important because, as explained, the returns are a guaranteed
percentage of the equity, incentivising over-invoicing of imported
equipment, enabling not just the recovery of the investment upfront
but also furnishing a guaranteed return on this over-invoiced amount!
What is uncertain is the impact that CPEC could have on our growth
rate, given our weak global competitiveness owing to our deformed tax
structure, poor governance and lack of skills. It limits our ability to
integrate into Chinese-driven value chains. A greater worry would be
the possible folding up of many of our businesses, not being
competitive. As things stand, without a competitive industrial (perhaps
even the agricultural sector), we may have to be content with, like the
good rentiers that we are, simply collecting toll taxes for our much-
marketed strategic location.
Finally, given the precarious health of our external sector (with the
current account deficit accumulating at a frightening billion dollars a
month and the import bill programmed to increase by an additional
$3bn by end 2018 on LNG/coal projects) and no visible signs of possible
improvement, we would, as night follows day, be negotiating a new
IMF programme, latest by the second half of 2018.
Lest we forget, the IMF has no currency of its own, nor does it manage
one. It essentially lends in US dollars which is also the currency for
discharging CPEC-related obligations. If political analysts are right in
asserting that the Americans are not happy with our Afghan and
regional policies and our attempts to get closer to the Chinese, will
their monopoly over their currency and their clout in the Fund provide
them a leverage beyond just a role in the finalisation of IMF
conditionalities?
Media reports claim that the review is in its final stages and the
administration could release it late this month, after sharing it with the
US Congress.
Secretary Mattis also said that Senator John McCain, who heads the
Senate Armed Services Committee, has a key role in formulating the
new US policy for Afghanistan and Pakistan.
Since then, Congress has adopted several measures binding US civil and
military assistance to Pakistan to the severing of its alleged links to the
Haqqani network. Some of these measures also require Pakistan to
prevent militants from using its soil for launching attacks into
neighbouring countries and to release Dr Shakil Afridi, who helped the
CIA trace Osama bin Laden at a compound in Abbottabad.
The strategy and you know, what is the main effortand what is a
supporting effort. And in the supporting efforts is where you often find
the most nuance and, as a result, where you have to sort things out in
the interagency, said Secretary Mattis while explaining what was
causing the delay.
He also confirmed recent media reports that key Trump aides were
exploring the possibility of replacing US troops in Afghanistan with
private military contractors.
A futile martyr?
Umair JavedJuly 17, 2017
The second reason for the fight is to take the victimhood or martyr
route. No ruling party leader will ever cite this as a reason, for largely
understandable reasons. Nevertheless, it does seem to be a popular
view among analysts. It helps provide a scholastic perspective, if you
will, on why the prime minister is stretching out his tenure in such
acrimonious circumstances.
Lets run with this logic for a second and assume it is part of the reason
for his stand. How does the ruling family intend for it to play out? The
prime minister faces disqualification through three possible routes. The
first is the court ruling on his character under Article 62/63 of the
Constitution. The second is on the basis of his role in an offshore
company in UAE thus a conviction for mis-declaration on his 2013
nomination papers. The third is a NAB reference in an asset-beyond-
means case and a conviction after trial and appeal. In all three
instances, the prime minister will be evicted from office based on the
JIT report.
Once this happens, the party will have greater room to weave a story
about victimisation, establishment conspiracy, and threats to
democracy. One can expect these cries to be tied to Pakistans
economy and an emergent narrative of how national development was
once again curtailed by a venal opposition. At a more subliminal level,
the dog-whistle idea of Punjabi voters being victimised for reposing
their faith in the PML-N will also rear its divisive head.
Following each of the three dismissals between 1988 and 1996, a large
section of voters in Punjab leaned away from the outgoing party the
victim and in favour of the party they thought was being supported
by the establishment. This was underscored by a growing trend
towards the PML-N in general, which manifested in the heavy mandate
of 1997.
In 2002, many senior and mid-tier politicians jumped ship and formed
the PML-Q. Nawaz Sharifs victimisation and eventual exile did nothing
to sway their sentiment. Voters split their loyalties between the PPP
(that seemed to be close to a deal with Gen Musharraf), and the PML-
Q, while the rudderless PML-N only retained a small but vocal segment
in urban seats around the GT Road belt.
The worst suited to compete in this context is a party without its leader
in play, heading into an election in an advanced state of uncertainty.
This is where the PML-N now finds itself. It may weave a narrative of
victimhood, but the historical odds of that narrative swaying voters are
low. Fight or flight, the party is now facing an electoral future looking
shakier than at any point in the past 15 years.
umairjaved@lumsalumni.pk
Twitter: @umairjav
Pakistan must maintain good relations with all the countries involved in
the Gulf dispute, yet a prolonged stand-off will only increase pressure
to pick sides. Our ability to resist such pressure is doubtful; while
parliament in 2015 voted against involvement in the Saudi-led
intervention in Yemen, there were reports that Pakistani security forces
were involved at the behest of Saudi Arabia in quelling Shia uprisings in
Bahrain in 2011.
Pakistan has long believed that it can navigate its way through Middle
Eastern conflict scenarios by playing a mediation role. But the Saudi
tack does not leave much room for mediation; with its coalition of the
UAE, Bahrain and Egypt and its aggressive list of demands, Riyadh
seems to have adopted an are you with us or against us approach
(doesnt that sound familiar? Remember how that worked out for
Pakistan vis--vis another ally and benefactor?)
huma.yusuf@gmail.com
Twitter: @humayusuf
Inmates or bosses?
Hajrah MumtazJuly 17, 2017
The writer is a member of staff.
GIVEN the countrys situation vis--vis militancy and violent extremism,
each instance of a perpetrator of terror or crime being arrested and
brought to justice is to be welcomed. There are unfortunately not
enough successes on this count, but one case that went differently, at
least initially, was that concerning a man called Shaikh Mohammad
Mumtaz and another named Mohammad Ahmed.
It can be guessed that the situation in other prisons may not be too
different. Over the years, several instances have come up where well-
connected prisoners have been found to be in touch with or even
continuing to work with their outfits whilst technically under detention.
One wonders why, under such circumstances, then, Pakistans prisons
continue to hold any inmates at all, except for those that are powerless
to engineer escapes for being fry that is far too small.
The answer is found in the CTD report about the Karachi escape. It
muses:
As is quite clear from the circumstances that have prevailed for years,
militant, extremist and criminal outfits often manage to run rings
around law-enforcement agencies here, the impunity with they
operate only being bolstered when a new tool used by the law is
proved ineffectual, or when cases such as the one being discussed
come up.
Yet, spare a thought for the law enforcers, particularly the civilian ones
and especially the lower-ranking personnel that constitute the bulk.
First in the line of fire, they have little reason to believe that the
strength of the institutions they represent will be expended on their
behalf in their hour of need which, on the streets and in the
corridors of overcrowded prisons, is never very far. Further, in a
country where corruption at the highest ranks has for decades been an
open secret, how much incentive would there really be to remain
staunchly upright in the face of all temptations?
As a friend remarked regarding the CTD report, when in the country
generally it is quite obvious that lunatics are running the asylum, why
become fastidious over prisoners running the prisons?
hajrahmumtaz@gmail.com