Much of the developing world is sailing into two big shocks.
The first is about energy. We have been reading about it in the context of countries like Pakistan.
In the last month, when the heatwave gripped South Asia, Pakistan’s towns and cities went without power
for 4-6 hours a day. Rural areas fared even worse – they didn’t have electricity for as much as 8 hours a day.
The reasons for the protracted and frequent outages are fairly straightforward. Over the years, Pakistan’s dependence on imported fuels like gas has increased. As the Dawn wrote
in its previous tenure, the PML-N government further compounded matters. “(It) attempted to overcome the power shortages… by inviting foreign investors and lenders to help establish a series of power projects which would offer them guaranteed returns.” Most of these plants, it wrote, mainly run on imported fuel.
The downsides are not hard to spot. In recent months, not only has the dollar strengthened
against other currencies, the Pakistani rupee has fared particularly badly, losing as much as 30% of its value against the dollar in the last 40 months.
Among other things, this pushed up power generation costs
. Discoms fuelled the spiral further, wrote Dawn, “failing to contain line losses and improve recoveries”. Then came the post-pandemic economic rebound and Russia’s invasion of Ukraine – both of which pushed up oil and gas prices
, making power generation increasingly unaffordable for the country. As Bloomberg reported
, “(Pakistan’s) energy import costs doubled in the ten months ended April.”
Things got so bad that, despite their scale, even the power cuts proved insufficient. The country needed further reductions in power consumption. And so, last week, not only did the new government roll back
its decision to boost its work week from five days to six, it said Friday might become a work-from-home day