?The prime reasons for the electricity crisis is that those in the Musharraf regime who made the feel good consumer oriented economic policies never thought about investing commensurately in massive generation to meet the manifold increase in demand for electricity, and power transmission and distribution
The Shaukat Aziz formula to keep everyone happy was Marie Antoinette’s simplicity itself: let everyone have an air conditioner,
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The man who is our new prime minister added to the problems by diverting funds from the existing independent power producers (IPPs) to the scam of the rental power stations (RPPs) where money could be siphoned off conveniently. What can be more cynical than Zardari’s appointment of the person who is most responsible for the present shortages to reduce the power gap as chief executive of the country?
What does loadshedding cause besides acute discomfort to a large segment of the population? Electricity shortages mean less of manufacturing as well reduced services,
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The hot summer days without lights and fans for extended periods cause acute physical discomfort, exacerbated by the mental agony that the common man faces daily, with reduced wages and/or bereft of a job and not having the means to pay for food for his family,
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Transfixed in the eye of the storm, the term "Catch 22" was probably invented specifically to describe the hapless predicament of the federal finance minister, Dr Abdul Hafeez Shaikh, damned if you will,
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Hafeez Shaikh could well look at the Argentine model. The success of the "Kirchnerism strategy" was based on fiscal sobriety and a flat refusal to repay much of the $100 billion in foreign debt on which Argentina defaulted in 2002. This default was brought on by excessive borrowing in the 1990s, the collapse of the Argentine peso and draconian austerity demands from the IMF. Does that sound familiar? Argentina restricted its debt in most cases to some 30 percent of its value but did not reach agreements with all its creditors. While it still can’t access international credit markets because of its massive 2002 debt default, Argentina has become a showcase in less than a decade. This surge from basket case to showcase was only possible because of increased domestic consumption, high prices for commodity exports and increased social spending. The bottom line was to renege on the debt. The poverty rate in Argentina was cut by half and the country became the richest nation per capita in South America.
The tightening of import restrictions in Argentina has caused many nations to accuse Fernandez of illegal protectionism. Increased state currency controls have led to hoarding of US dollars as a hedge against inflation or a possible devaluation of the Argentine peso. Some informed economists believe this model could be emulated by Greece and other indebted disaster zones. The recent Greek election was a near run thing for the Euro, under the Syriza Party socialists Greece would have been only too happy to try to leave the Eurozone.
Cristina Fernandez is keeping up her defiant nationalist stance,
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The standoff with the US continues. Among other things Pakistan wants an apology for the Salala incident and a transit fee of $5,000 per Nato container, the resumption of drone strikes are causing heartburn among the masses. The US government is reluctant to give that apology in a presidential election year, because the Republicans will use it to tar and feather Obama. What is of some mystery to Pakistan is why the US is reluctant to pay the transit fee. It is not huge, given that the US is spending far more using the much longer, more difficult Northern Distribution Network (NDN). The US has had something of a free ride for over a decade,
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Hafeez Shaikh is between a rock and a hard place. Without a deal with the US, the IMF will likely not give the necessary funds, Pakistan can probably last till October without going bankrupt, with an IMF infusion, we could possibly go on to December.
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