Pakistan’s economy is anticipated to experience a slump of 3.5 percent in fiscal year (FY) 2023 (ending 30 June 2023) as devastating floods, and restrictive monetary policies continue to put pressure on the economy. However, amid critical efforts to tackle substantial fiscal and external imbalances, the growth in FY2022 is expected to have reached 6.0 percent, the Asian Development Bank (ADB) reports, recently.
According to the Asian Development Outlook 2022 Update, gross domestic product (GDP) growth in Pakistan in FY2022 was driven by higher private consumption as it witnessed an expansion in agriculture, services, and industry— especially large-scale manufacturing. But in FY2023 — as well as climate disasters and Pakistan’s policy efforts — ADB’s projection about lower growth reflects double-digit inflation.
The spike in inflation is dominantly propelled by high energy prices. As winter approaches, there is word circulating about the shortage of gas in Pakistan. Of course, the citizens will ultimately pay the price in the form of non-availability, which assuredly has to be paid by someone. This leads to the question of whether the national government possesses the ability to properly address this shortage.
After all, the reason why Pakistan faces a shortage of the one resource that was found in abundance in the country is largely thanks to the decisions made in the last quarter of the century by these very same government entities.
So the current crisis can safely be called an end to an abundance. We are living at the end of what could have seemed an era of abundance — the end of the abundance of a product that seemed always available in Pakistan.
The reality, perhaps, is that there may be no real shortage of natural gas today, or oil, or coal. Yet, we are unquestionably in the midst of an energy crisis that has largely resulted from regional shortages artificially created by government restrictions on the production, distribution, and usage of them.
Many will oppose this assertion by maintaining that such decisions were necessary due to climate change considerations. But also undeniable is the fact that Pakistan was already struggling with a building energy crisis even before Putin began massing troops along his country’s border with Ukraine.
The regressive policies and voluntary dependency were all a choice, without external coercion. And all of these play a major role in creating the energy fix that Pakistan finds itself today.
Now, the entities who chose to artificially intervene in the energy markets, to decide winners and losers by national edict are promising their populations that the next round of intrusions they propose to impose on the energy markets will one way or another resolve the problem.
What this translates into for a layman is a bitter but compelling slice of truth about the energy shortage. We have the wrong class of people making these really important energy policies and decisions for the common man. All of them are a part of the global elite, the affluent and powerful of the society who can influence almost anything for the developing economies – and the rest of us.
These are the people who travel by private jets and luxurious yachts that serve to host exotic climate conferences at which such decisions are frequently made. Of course, their lives are minimally impacted by such decisions, if at all. They are unaware of the appalling hardships and cohort of human deprivations their decisions will inevitably cause if not rectified – for the poorest of citizens who are not privy to the trappings of Western elitism or the supremacy that stems from the holding of high public office. Case in point, Sri Lanka, once prosperous, now has completely shrunken during 2021; or Pakistan, where regular blackouts of 12 hours or longer have become a way of life for many.
In fairness to us Pakistanis, we have little choice today but to at least appear to be addressing the predicament all of us see coming. We are, after all, responsible, for irresponsible production, distribution, and consumption. One can only hope that we make better decisions this time around, however, our track record thus far is not at all reassuring, and our options at this late point are sorely restricted.
Now, the entities who chose to artificially intervene in the energy markets, to decide winners and losers by national edict are promising their populations that the next round of interventions they plan to impose on the energy markets will one way or another resolve the problem.