By: Khalid Zakha
Who bears responsibility for the soaring electricity bills? Is it attributable to electricity theft, corruption, the cessation of subsidies due to pressure from international financial institutions, the allocation of free units to employees of the electric corporation, mounting debt, a shift in policy from state to private ownership, or the policy failures dating back to the Pakistani government’s decisions in 1958? Political parties have been engaged in point-scoring for political advantage by claiming success in eliminating electricity load shedding, yet they fail to disclose the associated costs: the exploitation of the public’s hard-earned money by Independent Power Producers (IPPs). Their emphasis consistently leans towards privatization, constructing a narrative that nationalization is a curse responsible for Pakistan’s social woes, poverty, and underdevelopment. Many Pakistanis buy this narrative.
However, there appears to be a reluctance to engage in discussions about policies aimed at alleviating poverty, unemployment, exorbitant utility bills, lawlessness, and deteriorating economic and social conditions. This reluctance likely stems from vested class interests. Instead, political parties endeavor to divide the masses, fabricate trivial issues, and distract them from real issue. There’s a notable absence of dialogue regarding the economic, political, and social policies that have led Pakistan to the brink of bankruptcy.
The issue of IPPs has contributed to circular debts and financial strain on the people of Pakistan for nearly three decades. Questions linger regarding why contracts were signed with IPPs for 4500MW when the electricity shortfall was merely 1200MW, and why taxpayer money is being squandered on unused electricity. The identities of these IPPs, as well as their financiers and overseers, remain obscured.
Returning to the origins of the staggering electricity bills, it appears that they are intertwined with policies implemented by the Pakistani government in and after 1958. This marks the inception of international financial institutions’ influence in Pakistan. This influence aimed at institution-building, creating agencies with financial autonomy from local governments and political institutions, thereby serving as conduits for the agendas of international financial bodies.
Furthermore, the Harvard Group, led by Dr. Mahbub ul Haq, played a significant role in aligning Pakistan’s economic strategies with the global capitalism. This trend persisted across successive regimes, including military dictatorships and civilian governments.
The legacy of borrowing from international institutions, particularly the IMF, traces back to General Ayub Khan’s era in 1958 and has continued through subsequent administrations. Over time, what began as grants and soft loans evolved into high-interest loans with stringent conditions, culminating in the implementation of Structural Adjustment Policies (SAP) in 1981. These policies have exacerbated poverty and economic instability, perpetuating a cycle of borrowing to service existing debt, compounded by currency devaluations. The privatization drive initiated in the late 1970s and early 1980s has contributed to unemployment and reliance on external entities. The collective outcome of these policies is reflected in the unbearable electricity bills, unemployment, poverty, food insecurity, economic insolvency, and social deterioration plaguing Pakistan. Mere changes in leadership are unlikely to effect meaningful change; a comprehensive reassessment of policy with a focus on pro-people initiatives is imperative.
Tuesday, May 5, 2026
