Reforming at gunpoint

THIS could be a case study in how not to do things. Common sense tells us that when problems are left to fester for long, they can grow in scale and complexity. Having postponed inevitable adjustments for long periods of time, a moment arrives when the necessary adjustment has to be undertaken in panic, in a short period of time, without the luxury of staggering out its impact, or embedding it within a larger package of reform measures. This is exactly what has happened with the recent gas price hikes. It is hard to tell whether the hikes applied so far are enough to arrest the growth of the circular debt in the gas sector. My hunch is no, it is not, and more hikes may need to be applied in the future. But even without that, what has happened in the gas sector is almost a case study in how not to do things. It has been known since at least the early 1990s that Pakistan’s domestic gas supplies would peak somewhere close to the year 2010. By the early 2000s, these were no longer projections, but empirical facts that were coming into view, about the moment when domestic gas supplies would enter their period of decline.