fueling the future - Woodrow Wilson International Center for Scholars

Shahid Javed BurkiGiven the belief that the country could do well in the future, why didthe Musharraf administration allow power shortages to develop, a situationthat was certain to hamper growth as had happened in the past?Why, as had happened in earlier periods, was the government onceagain resorting essentially to ad hoc measures to deal with the situation?This essay will attempt to provide answers to these questions.The main conclusion to be offered here is that as in several other sectorsof the economy, there was a serious failure of public policy. Thegovernment once more was failing to address a deep-rooted structuralproblem in the economy.This paper has five parts. The first provides an overview of the energysector before shifting the discussion to the electric power sector.It highlights some of the main differences between Pakistan’s energysector and those in other developing countries at the same stage of development.The second part of the paper focuses on what I have called“the weight of history” to explain the current energy problem. Overthe last six decades—in fact since the country gained independence—no serious attempt was made by a succession of governments to supplyvarious forms of energy to different types of consumers. There was acolossal failure of public policy in this respect, which left the countrywith weak institutions, inappropriate pricing policies and insufficientpublic sector investment that contributed to what appears to bean inexorable march towards another crisis. The third part analyzesthe current demand and supply situation in the power sector, the mostimportant component of the sector of energy. It highlights some of thecosts that will be imposed on the economy as a result of the anticipatedincrease in the demand-supply gap. The fourth part looks at the currentadministration’s strategy for addressing the situation. This strategyis incorporated in the Medium-term Development Framework, 2005-2015, 1which is a weak document in terms of laying down what the governmentneeds to accomplish in order to address the various structuralweaknesses the economy faces in the early 2000s. The fifth part willindicate some of the new technologies Pakistan could exploit in dealingwith the problem of energy, including the enormous potential ofthe under-tapped agricultural sector.| 36 |