Self-inflicted economic crisis

Enough has been said, written and read about the problems in the country. The blueprints are elementary in developmental economics textbooks. It doesn't require rocket science knowledge to uplift a debt-stricken country with a GDP per capita of $1,700 to a more respectable $3,000 per capita.

While the economic solutions are plenty and multipronged but require political will and resolve. Hence, the much-needed economic turnaround has been delayed repeatedly. Policymakers - politicians and bureaucracy have been catering to their self-interests, playing to the gallery and are bereft of novel economic ideas. Someone has to communicate that 1980s policies of basic infrastructure needs would not set the platform for high growth in the 2020s. There are several elephants in the room.

Firstly, the gas and energy sector. Power generation needs to avoid imported fuel at all costs. Import bill fluctuation, stemming from volatile oil and LNG prices, creates an unsustainable balance of payment crises for Pakistan. The focus needs to entirely shift towards low variable costs generators, such as nuclear, hydel, Thar coal, solar and wind. Indigenous Thar reserves are a mega powerhouse and a success story with tremendous economies of scale and deceleration of input costs.

Similarly, hydel with water storage is the need of yesterday. Many Pakistanis are already using cylinders for gas. People in the lowest income strata should be sold gas at cost and compensated with monetary compensation through Ehsaas or Benazir Income Support Programme.

Secondly, hand over the electricity and gas distribution to the provinces and private sector (please). There is no (genuine) incentive for the discos to improve their performance, i.e. theft, recovery, line losses and smart metering.

These employees have no significant monetary incentive to rampant corruption. Illegal kundas and kharchi concepts have paralysed the efficient system altogether.

In addition to incompetence, political patronage is a key ingredient to malfunctioning, leading to a heavy burden on the federal exchequer. Discos should be privatised and listed on the Pakistan Stock Exchange with employee stock ownership plans. Profits should be shared for the social development of the district, city and province.

Thirdly, energy exploration must be expedited on a war footing basis. The last decade has seen Pakistan's production decrease from 4 billion cubic feet per day (bcfd) to approximately 3bcfd, while unconstrained demand is nearly north of 6-7bcfd. The top energy exploration companies have been trapped in circular debt due to the government's unwillingness to recover costs - let the market function - and have been ignored with the advent of ever-mobile imported RLNG.

Even the latter has been stuck in limbo with no new RLNG import terminals set up due to the unavailability of pipeline capacity, which in turn is contingent upon Suis or geopolitically sensitive Russia-Pak North-South pipeline. The country is blessed with massive recoverable gas reserves, but those require constant exploration activities and cash-rich balance sheets of energy conglomerates.

Fourthly, perennial ignorance and indifference towards the export sector have crippled the country's ability to finance imports, constantly relying on overseas Pakistanis to support 230m people back home. Unsustainable energy policies - price and availability - coupled with constant currency volatility have kept the country's export potential capped.

At 7 per cent of GDP, $30bn yearly exports are not enough to finance the country's food and energy bills, let alone pay for machinery, raw material and intermediate goods.