Archive for March, 2018

Govt power policy failed to deliver: PEW

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Loadshedding started with the onset of summer
New power projects added to the circular debt, massive foreign loans

The Pakistan Economy Watch (PEW) on Thursday said the onset of summer has resulted in massive load-shedding across the country exposing serious flaws in the government’s power policy.
The tall claims of the PML-N leaders regarding eliminating power crisis failed to materialize which can have an impact on the results of upcoming elections, it said.
PML-N leaders knew that load-shedding was an important factor in the defeat of the PPP in the previous general elections, therefore, they made elimination of energy crisis a cornerstone of their strategy, said Dr. Murtaza Mughal, President of PEW.
However, he said, it seems difficult that the promise would be delivered as three RLNG based power projects in Punjab with a combined capacity of 3600 megawatts failed to start commercial production despite repeated extensions in the deadline resulting in massive losses.
Similarly, Nelum-Jhelum and Tarbela extension projects with a capacity of generating over 1400 megawatt also failed to provide electricity adding to the costs.
The failure has hit LNG imports which have resulted in fines and damages and the masses will pay the bill for the incompetence of the authorities.
Murtaza Mughal said that government tried to launch new power projects ignoring reforms and improvement in transmission and distribution system which has only added billions to the circular debt and loans.
It appears that the next government will have to bear the load of the mistakes of the incumbent government which is not ready to accept its failure and take action against those who are responsible.

In: Economy WatchAuthor: AAMIR JAVEDComments (0)

Devaluation to hit poor, boost the profit of influential sectors: PEW

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Imports to nullify the impact of little improvement in exports
The Pakistan Economy Watch (PEW) on Monday said devaluation will increase the burden on poor, increased foreign debt and liabilities while boosting the profit of some of the influential sectors.
Erosion in the exchange rate to the tune of 9.4 percent in just three months will hit man on the street while and damage education, health, and security environment, it said.
The devalued rupee is to take a toll on the economy while it is to improve the profitability of many influential sectors including textile, oil and gas and IPPs, said Dr. Murtaza Mughal, President of PEW.
He said that increased price of locally manufactured and imported goods will trigger smuggling and tax evasion helping the black economy to expand.
Repeated devaluation is in conflict with the claims of the government that economy has been revived through tireless efforts, he added.
Dr. Murtaza Mughal said that claim that eroded rupee will boost exports needs some verification as imports and more than double of the exports which can nullify the impact of the move.
The government should have studied the impact of inflation in advance and tried to contain it, he demanded.
He said that if the central bank hiked interest rates to contain inflation it will deal a severe blow to the shattered economy.
Devaluation can provide oxygen to the dying economy but it cannot revive it, he said, adding that key to the economic revival lies in the meaningful reforms which is not on the agenda of authorities.

In: Economy WatchAuthor: AAMIR JAVEDComments (0)

Plight of cane growers should be noticed: PEW

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Sugar mills mafia exploiting poor planters
Sugarcane support price mechanism malfunctioning

The Pakistan Economy Watch (PEW) on Saturday said powerful sugar mills mafia continue to exploit the sugarcane growers which must be noticed.
Increased production of sugarcane has failed to improve the quality of life of millions of people depending on the sugarcane crop as they get Rs100 to Rs120 per maund against the support price of Rs180 per maund, it said.
Growers are not getting the notified price for their produce while they also face delayed payments every year, said Dr. Murtaza Mughal, President of PEW.
He said that federal and provincial governments have frequently been accused to side with the millers are provide them subsidies to the tune of tens of billions of rupees which put the strain on the exchequer.
Murtaza Mughal said that uncertainty continues to hurt growers and millions of those dependent on them while authorities have failed to chalk out any plan to save them from abuse.
He said that support price mechanism should be altered, growers should be given incentives, while millers should be directed to pay half of the price while unloading the sugarcane.
The remaining half of the price should be cleared within few months while the growers should be allowed to use encash receipts issued from sugar mills at designated banks.
Owners of the sugar mills should not be allowed to delay crushing season or employ delaying tactics to increase profit on the cost of poor otherwise growers will lose interest in this important crop which will be against the national interests, he warned.

In: Economy WatchAuthor: AAMIR JAVEDComments (0)