#DevTalks: Access to Power/Electricity and the Infrastructural State in Pakistan

DISCLAIMER: This webinar transcript was loosely edited and there may be inaccuracies.

Abdurrehman Naveed: Good afternoon everyone, and welcome to the Growth Lab's Development Talks. My name is Abdurrehman, and I'm an MPP candidate at the Harvard Kennedy School. We're delighted to have Professor Ijlal Naqvi, from the Singapore Management University for a session that largely focused on his freshly minted book, "Access to Power." Professor Naqvi is an associate professor of sociology and the Associate Dean for curriculum and Teaching at the School of Social Sciences of Singapore Management University. He studies governance and development in the Global South, using infrastructure as a lens on state building and the citizen's engagement with the state on an everyday basis.

Ijlal Naqvi: Thank you so much for that generous introduction, and thanks all for turning out for this talk. I'm really pleased to be here. Abdurrehman said basically everything you need to know about me. I teach in Singapore. I'm a sociologist, and I study the electricity sector in Pakistan. but I use it in social science way [inaudible] So I look at it as a way of how states matter in the everyday lives of ordinary citizens. Right? So that for a good. Thanks to the good folks who invited me, the South Asia Caucus, the Growth Lab, for organizing the invitations. A couple of things that I'm going to talk about. First, sort of this is a sort of problem-driven sort of body of research. It came from very personal experience, to do with the electricity experience for ordinary people in Pakistan and in other parts of the global south. Right. And this question of the things that government does it the order of individual people on a regular basis and to try and address that in some way, those are kind of some of the aspects of what drove this research. I'll tell you a little bit about what that problem looks like. I'll give you sort of an overview of the theoretical framework that I put into place to address that, that's what I call the infrastructural state. And then there's the empirical work that links up as both has sort of three levels of analysis: one is at the national level and below it you find cities, and then lastly, by the individuals experience and sort of encounter between bureaucrats for service delivery. I'll close this up with this idea of governance isn't version compromise. Right?

Ijlal Naqvi: So what is the problem? So we have summarized that is Pakistan desperately wants to provide enough electricity, but it usually can't. And that's been more or less true since, frankly, the 75 years of Pakistan's existence. But this challenge and some version of it as being top of the political agenda or close to it for at least 30 years or longer. And the idea that electricity is important it's not new or novel to anyone in Pakistan or Pakistani policymaking. Estimated impact of the others providing electricity is about 2% of GDP growth per year, and it's been a key focus of foreign assistance in Pakistan at least since the early 1990s and before that, as well. Alright, before I get too much further, in this room at least, do you know what load-shedding is? Right? Good number of people are raising their hands, I think. Right. So if you don't know what load-shedding is, load-shedding is what happens when a country doesn't have enough electricity. Right. So the way this works is that essentially it's a rationing mechanism that one area will get electricity supply and the next one will not. So if here in Cambridge you have  electricity, then Somerville is missing out. And when the hour passes, Cambridge's supply will be cut off and Somerville will have a turn. So this mechanism exists because there's an inability or whether that's a simple shortage of the amount of capacity that there is in terms of power plants or a willingness to run them for cash flow reasons. Right. So that's basically what I'll be getting into today. And there's a part of this talk, which is it's less mystery than tragedy. Pakistan is a developing nation, has no lack of ways in which service delivery is substandard or disappointing or insufficient for the well-being of its people. So we're not terribly surprised that electricity supply falls into that category of things. So this talk starts to do to look into that in more detail. So I want to think about not just what's wrong with electricity supply in Pakistan, but also what we can learn by studying it as it exists. So although all the empirical material we present things through with Pakistan, so this chart is meant to summarize that Pakistan line here is just below the line of best fit for GDP per capita for low and middle income countries and electricity losses is a key indicator of the quality of electricity governance stuff you're talking about. So if you look at the other countries that I've called out on this chart of South Asian nations, right. So Pakistan pretty comparable to India a little bit better on this particular metric, doing much worse than Bangladesh and significantly better than all which anyone familiar with South Asia. It's not entirely surprising. So the capacity governance functions in a very similar manner to a lot of other things that we're interested in terms of key development indicators.

Ijlal Naqvi: Okay. So the theoretical framework that's going to be not just like how approaching this empirical problem, but some of the claims. The first thing is to talk about what is wrong, right? So it's a critique of the dominant paradigm approaches to the governance, and particularly in terms of how to be applied to the power sector governance reforms. Okay, so I'll do this in three ways. First is that I like to think about the statement of the fields. Second thing is to think about material structure, material infrastructures as a point of entry for studying the statement, how it matters in ordinary people's lives. And the third thing about how Pakistan works.

Ijlal Naqvi: So this idea of Pakistan works is to take us away from a conception of Pakistan in countries like it perpetually in terms of weakness or lack. Right. Let's step away from that and think of what it is and to whose benefit it actually functions. So this notion that governments reforms routinely fail. The quote I put up here is from the in Sussex, it's from 2010, But I don't think it's dated. I think it's still relatively valid. And this big audience, I think it's worth saying that me at least in how I approach critiques of development. Lant Pritchett, Michael Woolcock and Matt Andrew's I mean, you're saying so much and this idea of problem driven, iterative development, when I introduced this as a problem that I want to address, you can see some of the legacy of those kinds of approaches that are that are present. So it ties into why I don't want to approach this purely in terms of of lack, because you have to deal with what is there and what is present in Pakistan. If we're going to have an effective approach to addressing this problem, where I deviate a little bit from from that approach is in how useful I think the institutions of International Development Assistance are. That's chapter three in the book or the article in Journal of Development Studies. If you're interested in getting more into that right.

Ijlal Naqvi: This idea of the state as a set of nested fields. The critique that I had on the previous slide was very much about formal institutions and governance reform as an approach which focuses primarily on formal institutions, formal in terms of rules oriented. Right. And so the ineffectiveness of that, and particularly what is implemented from a top down matter, that's what's really been demonstrated in plenty of literature around governance reforms. So let's step away from that and away from institutions as a form of rules. And take it towards an idea that is very common in sociological literature, that is. Fields, Right. So what our fields fields are arenas of conflict when you frame it in that manner. There's a couple of things that get highlighted. One is that it's about power. And the second thing is that there are other actors present in this field with who are in relationships to each other. So it's relational and it's about power and it's about conflict, right? So the outcome is going to be what results from the jostling of different actors with their own strategic interests vying for advantage within this environment. And then the outcomes of interest, right? These systemic characteristics. They're emergent, which means that they arise organically from the interaction of the different parts.

Ijlal Naqvi: And this framing, particularly for the state. So the state is a set of nested fields, hierarchically nested like Russian dolls, each within the next. And then there's a hierarchy, which in my case I broke it down to the visual encounter at public offices, a city level where you look at neighborhoods across the city at a national level, which were really interesting as a provincial perspective, at least within Pakistan. And these levels, the dynamics at different levels are going to inform each other. They're going to filter into each other and shaping the possibilities for the kinds of governance of thing. The second point that I want to bring up in terms of how approaching a study is to think about the use of material infrastructure. So material infrastructures, electricity is one example. Right. They embody, reinforce and enact social and political power. They've been built out by governments and they reflect priorities and imperatives that exist within certain policies at different points in time. And there's another aspect to them, which is the materiality of the infrastructures in question. By that I mean electricity is different from water, is different from roads, is different from rail systems. Right.

Ijlal Naqvi: So what are some of the characteristics of electricity in particular and how they matter? One is the speed at which electricity will move across space. Literally the speed of light, which means it flashes across space. It annihilates distance. And when an electricity grid exists, all aspects of that electricity grid have to be in sync with each other. They need to operate at a particular frequency. That is the good management of that grid and variation in that frequency. It can be the beginnings of a catastrophic breakdown, which would lead to a cascading set of errors that brings down the entire grid. Right. So this is again, when we're thinking about the entire space that's covered and the way that the different. Uh. The different sort of sub-units exist within the whole. Right. I'm encouraging you to think of them as a whole. Right. That they may have different levels of sort of integration, but they're all part one full. And this will be a test of electricity, in particular in a tradition of science and technology studies. It has a long tradition of being sort of key to modernity and to understanding of how modern states and systems are built out. And one example of this is the first electricity consumer, the prison system. That's Thomas Edison operating in lower Manhattan. And so as Thomas Edison is building out the electricity grid, the first consumer who's hooked up to that network is Drexel Morgan and Company, the Wall Street financiers. So Edison is doing two things right. One, he's always conscious that the grid that he is instituting has to operate at a efficiency or at a cost that is more effective than the alternatives because he wants. Secondly, he needs this person to pay, to bring in the cash flow, which is going to fuel the successful operations of this group. And lastly, he's bringing a powerful stakeholder to the system, which is established. Right. So infrastructures like electricity are both cause and effect of social change.

Ijlal Naqvi: Lastly, this idea that [inaudible] works. So, the unevenness of the state across its territory at different levels of analysis is not an absence. The state isn't absent in these areas where you might think of it as weak. It's very much present, but the terms of the integration of that territory are different in different areas. So I'm drawing an idea here, which is inequality by design, that the inequality which has resulted is the consequence of strategic decision making along the way. It wasn't a masterplan or a blueprint, but the decisions that led to this kind of inequality and unevenness are conscious and deliberate. Right? So this brings you to the idea that we're going to study the place as it is, not in contrast to some idealized other. But to look at how it works and whose benefit, ok?. And the argument that I'll be making here is one about the reduction of relations of domination that exist within the way Pakistan works and the space is integrated into the whole.

Ijlal Naqvi: Right. How do I do this? Primarily in terms of the graphics, or is that for the four years that I lived in Islamabad between 2008 and 2011, I spent a lot of time sitting with the ordinary sort of line officers of the industry supply company. I watched them do absolutely everything that is in the normal purview of their collection. Like when a new connection that you file, you have a complaint, you haven't paid your bill, you get to reconnect your meter, reconnected, all of that kind of thing, as well as maintenance and the reading meters, that kind of thing, and follow them around to do all that. I talked to people who worked in the electric utilities at all sorts of levels, the policy level, the very, very ordinary level of going around with these guys to read the bills as they write down meter reading, which that system.

Ijlal Naqvi: And then lastly. I worked as a power sector reform consultant on a USAID project, the Energy Policy Project, based on pure water power for a year, trying to implement some of these ideas, which I had learned through my dissertation research and then into that work, as you can probably tell, but that's another story. Okay. So at the national level, I want to start the empirical portion of the talk where I'm looking first at national level and in the city, in the individual. So the key theoretical concept here is one of state capacity, which Michael Mann talked about in terms of infrastructural power. What this breaks down to is can they state do what it intends to do? Can it actually deliver on these core functions of statecraft? The taxation is one that's often mentioned in this regard. Just to give you sort of a counterpoint, it's like what else we can look at. But the indicator that I'm going to be looking at is using the electricity grid as a way to study this challenge is thiis: transmission and distribution losses. So that was the Y axis on the chart that I showed you earlier. And transmission distribution losses are the units of electricity which enter a system. They're supplied to consumers, but they're not built. Okay. So that means that no bill is ever provided for a certain number of units which are sent out through the system. So there's two versions of losses. The first is technical losses or basically engineering problems, which is that you send electrons down a wire. There is resistance. And so you have a certain amount of losses from that point of view. That is 3% or less, by and large. The rest are some kind of managerial issue to do with how this electricity is not being billed. And that's the sort of governance problem of interest which I'm focusing on. The losses of box number about 20% in 2015. That's the average across the entire country. And it's not much different at the moment.

Ijlal Naqvi: All right. That's the average for the entire nation. Okay. So this chart does a lot of work for me in terms of understanding the national level analysis. So do a little bit of attention to this. And on the left you have what I was just talking about in terms of transmission, distribution losses. How much is billed. And so here you can see the contrast that exists across different regions of the country. These big lines, they represent the provincial boundaries, and the thinner lines are the geographical boundaries of the regional electrical utilities, the distribution companies or discos. So what should jump out immediately is that most of the country you're hearing here is operating at one level of performance, which is typically well above 20% losses, 30% even in this region in green. This is the Punjab. This is operating much better. So we're heading in the direction of the claim that I want to make about the terms of citizenship and the incorporation to state are fundamentally different. Right. So here this is the argument that's being made here. It's kind of strengthened by the chart of this side. And the difference is if those are units that aren't built, this is units that are neither billed or paid for. So this is acknowledging that many bills are issued but simply never paid. And the utility will continue to operate on that basis despite those bills not being paid. And here you can see. How high a proportion that is. So this means that like 75% or just 75% of the unit supplied budget are neither billed nor paid. And in other parts, it's 43% or 64%. These numbers vary, but in the Punjab, the numbers are still very strong that the the people are fundamentally being charged for the activity that they consume and they are paying them. And these. This distinction. Right. The regional distinction for people familiar with Pakistan, this sounds a lot like existing stories about differences across provinces. Right. That the Punjab is the dominant religion. And it is. It's the most populous, about 50% of the country lives in the Punjab. It's the most industrialized. It's the wealthiest. Right. And there I'll add a caveat that Karachi Electric, this little corner down here serving the city of Karachi is kind of an exception to both the study and the general terms of the argument that we're making here. I can talk about Karachi separately, if you'd like, but this difference in sort of the terms of incorporation for electricity versus for the Punjab versus the rest of the country, people are well aware of it in the sense and you can see it reflected in, for example, the below two regions that I just mentioned, where the electricity infrastructure is an explicit target of the insurgents in Baluchistan, whose grievances include the specific fact that their resources are utilized for the benefit of other aspects of the country from whom they feel that they don't sufficiently benefit. Right. They were then the targets of some of their actions have included the great infrastructure that's based there. Right.

Ijlal Naqvi: So we could also take away this title. And if we weren't talking about electricity. We could be talking about almost every sort of governance indicator of interest in Pakistan, Right? They have this similar pattern of distribution across the space. If it was maternal mortality, for example, or functional literacy in fifth grade, it would have a roughly similar geographic distribution across the space. Okay, So one thing to mention is that most of the resources which serve power generation, in particular, the power plants, those are located elsewhere in the natural gas and also the hydro electric power plants. Right. They're not located in the Punjab, which is the sort of density of population and economic centers of the country. But the power generation sites are elsewhere. And so this is a picture from a flight out to a dam located in South Waziristan, and it's called Gomo Zam. It's a small dam, but it illustrates some of the things that I'm interested in. So you can see the landscape, which is very harsh, very arid. And this small multipurpose dam that's built there, there's a reservoir that's filling up. This is water that can later be distributed for irrigation, such like the Chinese flag there for the Chinese contractor that's working there, paid for by USAID on a Pakistani government project. And this is the other the view of the dam from the other side. It's not fully complete at the moment. It's not generating power, but it is working in terms of flood control, which was very relevant that year, because in 2010 there were floods for which this dam already served its purpose. And then downstream will be the areas which will benefit from the irrigation. Right. So that dam only generates 17 megawatts. It's not a big deal in that sense. This is Sahiwal coal fired power plant. This is 1700 megawatts. This is a big deal. It exists in this town called Sahiwal, about right in the heartland of the Punjab, the agricultural sort of center of the country. And it is an absolutely massive thing that you can see this thing from at least ten kilometers away down the road as you're driving down. It looks visibly like it's been dropped on this pancake flat landscape from above by some alien sort of function. That red and white striped tower is over 50 stories high. Right. Which is the tallest structure of its type, tallest built structure for at least 500 miles around. And this it's a very high tech piece of construction that uses supercritical coal technology. And it's it's built by a Chinese joint venture. It's kind of a lead element of the Belt and Road infrastructure investments in Pakistan like the China-pakistan economic corridor. So it's important for multiple reasons. In that way, getting access to the plant was very difficult from an administrative perspective, but the engineers who work there are delighted with that plant. They're happy to talk about it. They're very proud of their achievements and what they've done and what they've built.

Ijlal Naqvi: So this line, in that campus, there's a billboard there which talks about what was what they've done, the Sahiwal spirit. So it's easier to read on my notes. But the first line, what it says is, "The patriotic spirit of being loyal to the party and winning glory for the country." Right. Which party? Which country? Not Pakistan. Right. Is the Chinese Communist Party and China. Right. But it's meant in the spirit of like they are actually terribly proud of what they've constructed. So this is a weird power plant for multiple reasons, not least because coal is being used that is imported and it's brought in to Karachi, which is a thousand kilometers away, and the coal is put on a freight train and sent up there to Sahiwal so that it can power local areas, which is very expensive relative to, you know, transporting electricity rather than coal. But that's the way it's being built. Okay. So to bring all of that together, there's this diagram that breaks out the different aspects of the electricity system, generation transmission, distribution. So you have coal fired power plants and that sort of thing over here. Generation, for some reason, I'm happy on the side of the table. And if they're going to run effectively, the rest of this circuit needs to function. The national grid, the electricity needs to get sent out through the transmission system to reach people. It's going to do that through the distribution companies. Right. And this goes responsibility to make consumers pay. So they have to handle the losses. If there's too many losses, that's a problem that needs to be addressed. Our purchasing agreements. These address the fact that imported fuels typically cost foreign exchange to do cost foreign exchange. So you're vulnerable to fluctuations in global energy markets, and you're also vulnerable to the fluctuations in foreign exchange prices. All of those things within the power purchasing agreements are passed through. It's not the Chinese company that's running Sahiwal coal power plant, which is going to bear the cost of increased coal prices, for example. Right. That's passed through to the Pakistani state. Who has the option of passing it through to consumers. So they can do that. But as you can imagine, the political costs of doing that are substantial. Right. So what typically happens is that accumulates in the form of debts. So when losses are too high, when entry prices fluctuate or foreign exchange prices move in ways that makes power production more costly, it's typically the Pakistani state that's picking up the burden. So that accumulates in something that's called circular debt. It's not circular. It's just an accumulation of debts that cover arrears within the system because that money has to be supplied so that these guys can then go around and produce the next round of power. Okay. And these subsidies are absolutely massive but cumulated sort of government inputs into the power sector to cover for the shortfall of cash flows was at various points in the last ten years, close to 10% of the federal budget. Right. Absolutely enormous. All right.

Ijlal Naqvi: And behind this. Is a sense that this single grid serves a singular identity for the state, but it's a thing that's a Muslim nation with a very singular interpretation, a single language, and the integration into the whole right serves this one identity, ethnicity. And the particular operates in opposition to the idea that this nation has a singular identity. Right. And this is historically terribly important within Pakistan as a founding idea later in 1971 at Bangladeshi independence. Right. And it's the primary axis of political opposition for, for example, the insurgents who I mentioned previously. Okay. So I have enough time to give you a little bit of the city and the individual level, of which my opinion, probably the more fun parts of the book, because then you get the stories about people's real experiences. So what these pictures represent is electricity infrastructure. This is in Lahore. These wires look terrible. A lot of this jumble is actually sort of fly by night cable TV operators rather than electricity operators. But the consequences, the trouble that's made for maintenance is, is just the same. This is in Karachi, where you have something called, is referred to as Kunda, which means hook. So this is how electricity is stolen in the classic sense. Right. You're going to get a soda bottle, cut it in half, put a metal wire through it, a bare metal wire, look it up to your live overhead transmission line, which is exactly as dangerous as it sounds when you're pushing it around with a broomstick or whatever is relatively easy to do. But monsoon storms, which come every year, knock these things down. People always die from electric shocks, other executions that result. Right. But this thing, I mean, it's so visible, right? You can't do this in a sort of secret way. You're probably either operating in an environment where law enforcement is not going to be very functional or the people are being paid off in different manners. So where I did my fieldwork was in Islamabad. And electricity infrastructure looks like this. And yes, the sidewalk looks all kinds of messed up. But underneath that is the best electricity distribution system in Pakistan, because underground, if something's underground, it's actually much, much more complicated to tap into it. And the chances of unfortunate accidents are much worse. But these distribution boxes serve like, you know, this clinic, the Dunkin Donuts, that's just down from there. Right. So this is the electricity, electricity distribution in Pakistan, sorry, Islamabad, but this is a residential neighborhood where, yes, these leaves will mess it up. But that distribution box is going to serve the houses that are around there. So the the focus of this little point is to talk about country, about these which are squatter settlements. Right. So this is sort of all the way down to the bottom of social hierarchy. These groups and it's all about at least are primarily Christian as well, which means that they're minorities in a in a religious sense, and they're squatters, which means they don't have legal land title. So you don't have legal land title means you can't get formal services from the state. They desperately want that. Right. They're practically quoting Hernando de Soto here. Right. Give us formal land title so that we can improve our lives in these in these descriptive matters. But they're prevented from doing so. So in an episode where the existing company was actually trying to crack down on them, it ends up in a negotiation with the utility because what they're saying is like this inhumane process for you to deny us electricity. How are we supposed to live without this sort of basic service? And that moral claim is very important because it's the basis for the negotiation which takes place subsequently. And what happens is that the company asks the community to basically form a committee of their own in which the electricity company will have like one proper connection. And then it's like you all handle the distribution within this area on your own, including bill collection, which is completely against the license of the distribution company, whose job it is to do exactly those things, and it cannot be passed on to a paying consumer. So they manage this set of informal arrangements and they'll do things like provide welfare to people if they think they needed some flexibility in payment and so on. Right. But at the same time, individuals are still trying to formalize their arrangement with the state and some of them succeeded. And in this instance, the family that succeeded ended up falling victim to something that's called overbilling. So because it's a they were basically given a bill which represented about $200 worth of consumption, which is far more than that family ever could have done with their, like one light bulb and a fridge and a fan. But it's a way to compensate for the fact there are so many losses in the system that the bureaucrats will hide the losses effectively on a family like this. So this family ends up retreating from the formal meter that they've worked so hard to get and going back to the communal metering system because they feel like they're protected, a kind of safety in numbers sort of idea. This retreat from formality is present elsewhere. In a in a displacement that happened where a country body was moved due to a government construction project. They were actually awarded plots of land in this upper middle class neighborhood. And what they did was they sold that land because the value of that land and the formal title of that land, was so out of all context with respect to their livelihoods and their well-being that they used that money for education, for health care, for everything else they needed, and they moved back to a country body. Right. So I'm pushing this idea that formal systems aren't necessarily an improvement for the people who are working with systems.

Ijlal Naqvi: So this is at the other end of the social hierarchy. This is a steel mill owner I spoke with who has an MBA from the US. His Land Rover is parked outside. And what he's talking about is that that in his relationships with the state, which are strictly formal, right, he has I mean, this is an entirely legal operation that to have relationship with a government officer means that he's paying them. Right. But this is the key part, that he's not getting them to do anything that isn't permitted. He's paying them to deliver on the terms of the rights that he has per the formal contract with the state. Right. That's what he's paying them for. So this idea of informality is wrapped into everything that these guys are doing. Okay. Running out of time. There's only one example from the individual level. But what I have here is there is a contest that takes place around this line superintendent, who's handling some paperwork for a question that that arises due to some of his requests for a new connection. Right. So the issue is like if you're in you connection as far away from the existing grid work, then you have to pay extra. And he's refusing this. So but when he's refusing it. Right. What he says is he's explaining that. And in the last sentence. Right. He switches to English. So what's the significance of English here? Right. It's a claim for a register of power. He's invoking the fact that the rules are written in English. But all the conversation around this is happening in either vernacular or in Urdu. Right. And [inaudible], who's the fixer in this case, he's like a third party operating on behalf of some unknown, powerful individual, says, Don't start your English with me. And then he swears it, right? And [inaudible] backs off. So this the street level bureaucrat is just simply not in a position to enforce legal structures in the face of powerful opposition. And one more reason why that those formal structures won't work from the top down. Okay. So I'm going to have to wrap this up. But let me touch on this. Like, how do you get things done? The communal aspect of it, these other examples are from from military officers, from sort of the middle class housing development. And [inaudible] is where my parents live. It's a cooperative housing society. Right. You don't want to be stuck dealing with that one on one relationship. The group actually has a lot of benefits for you in the sense that the governance that emerges from these different types of interactions is a negotiated compromise with all these different variables within there. And that formality isn't an unqualified improvement. I'll skip that. That the rational legal core to the Pakistani state is is fundamentally weak and operates at best in subordination or is one of the multiple factors with the relative power of the different actors involved. This is coming back to the theory of the field that I wanted to put in there. All right. And that this emerging compromise that results is influenced by the different levels of interaction that I was talking about, the individual, the city and the nation. Right. So I'm trying to give you an infrastructural lens on on state building that through this particular aspect of infrastructure, you see state building and state capacity, that the unevenness that you see at a horizontal level is, is by design, reproducing relations of domination. And the fact that there's a hierarchy here where the formal institutions and governance reforms are written from above. But many of these problems are actually generated and sustained from below. So very few pathways for disciplining the state from below. That's it. That's the cover of the book. But at least it's in Widener, if not all good bookshops everywhere and hope you'll get a chance to take a look. Thanks so much for listening to my talk.

Abdurrehman Naveed: Professor Naqvi to thank you so much for that fascinating presentation. There are so many questions I have, but try to limit myself and then open it up to folks. It's seen a lot of conversation about feedback or the China-Pakistan economic corridor as being the panacea for Pakistan's power sector. But not much has changed in terms of the in terms of the lived realities and the day to day experiences for most people on the ground. You talk about this in your book towards the end of of of what CPEC is and what it could have been. Could you speak more to the spectrum and some some of the challenges that Pakistan faces and how we need to structure future engagements with players in a more nuanced way?

Ijlal Naqvi: Sure, CPEC is vitally important and it's, something that I struggled with, at least in part of writing this book, because I did my field work long before CPEC was even envisioned. And so as the book went into sort of the review cycle, they were like, Hey, what about CPEC? I'm like, Yeah, I'd be delighted to look into that for you. And went back to to learning more about it. But it is the example that I showed. I think I want to differentiate between infrastructure and infrastructural power. Right. So it's a tremendously important piece of infrastructure. The 1700 megawatt power plant is the first example of that. Some of the CPEC projects in terms of the energy sector, but it doesn't represent the Pakistani state's capacity to do anything within its territory. Right. And I think that it still matters for a lot of our corporate governance in this issue, because the coal fired power plant has certain shortcomings. Right. Like I mentioned, that it's imported coal and so on, which still means that you're exposed to international energy markets. But frankly, what it displaced was even worse. What it displaced was high sulfur furnace oil power plants. And those are so filthy that it makes coal look good and they're even more expensive to run. So the plants did what they were intended. It's just that in that cash flow diagram that I showed, you're only looking at one side of the equation, which is the left hand side where the generation, the power plants are. And it's fine to improve that and to lower the cost of production, but it doesn't attend to the fundamental shortcomings which exist on the other parts of the diagram, particularly within the distribution system. Because so long as each unit is sold as a loss, so long as you aren't able to control the distribution system in terms of billing and collecting on those bills, you can improve certainly by reducing the cost of power production, but you won't attend to the more fundamental challenges the debts will continue to accrue. So I have I think it's the next slide. It's this one, right? So this is a headline from 2021, right? Where all of a sudden. Right. The power capacity was beyond what was supposedly needed within Pakistan. So these plants had been built out, which was always the intention, but there was still load shedding at times because it was all to do with the price of electricity. It was all to do with the fluctuations in international energy markets. And despite the fact that capacity had increased so much, you could not actually supply electricity to ordinary people. So there's much more attention that needs to be done on the the payment side of it, which is which is much harder to do. It's nice to like invite Chinese investors in to come and make a 1700 megawatt power plant. Engineering companies are ready and happy to do it. You fence it off, put a special military unit there, and nobody's going to bother them. They do their construction. The engineers are very proud of themselves and they did the job they were intended to do. Right. But engaging with ordinary people for service delivery, being responsive to them, showing up, making sure that the infrastructure is well maintained. These are much harder tasks and they address relationships of power which are part and parcel of Pakistani governance on a much more fundamental level. So, so long as those questions are never addressed. Right. And we build new power plants, right. The fundamental problems will still remain. So that I think, is an entirely different sort of level of challenge, which hasn't yet been tackled in appropriate way.

Abdurrehman Naveed: And just building off of what you said, the distribution company or the discos that we call them are at the heart of Pakistan's power sector mismanagement. And one of the repeated calls we have seen from technical experts is to privatize these discos. Now, how do you see the role of privatization based on your work? And what lessons can be learned from Pakistan's experience with privatization, with Karachi?

Ijlal Naqvi: Yeah. So those are those are great questions. And Karachi Electric's a fascinating example. I actually started looking more at Karachi subsequent to the fieldwork. But I think one thing that's apparent is that when these calls for privatization exist for the distribution companies, nobody's interested in privatizing the distribution company that serves Baluchistan or the northwest of Pakistan. Right? They're only interested in the most industrialized, high functioning areas anyway. So it's almost like, what is the point? Those are those aren't the problem. That's not where these the issues are being generated from. So in some sense, like it's a commitment to privatization, which is almost more ideological rather than addressing the core issues at work. But that's with respect to current calls to privatize. The history of Karachi Electric is rather fascinating because it's privatized around 2000 or 2005 at least. It goes under private management at that point. It's owned and then sold again in 2008 to a Dubai based private equity group. Right. And I don't think it's unfair to say that this company was looking to sell what they had bought on to other buyers. Those other buyers never emerged. And for many years subsequent to its sale and going on to private management, Karachi Electric was like a horror story as like a cautionary tale against privatization, because privatization didn't accomplish anything. In fact, the vast workforce was so aggravated at the threat of sort of being made redundant, losing their jobs. They were rioting, they were violent, they destroyed equipment, they antagonized and harassed superior officers within the Karachi electric system. And then there's a point around 2012 where something that's entirely external to this environment changes, which is that the gang war, which was dominant within Karachi ends, right? That's basically a paramilitary operation which comes to fruition. And there's a particular political party which was most associated with this kind of neighborhood level protection rackets, which is more or less sidelined. Right. And with the exit of this political party and the end of that kind of gang violence, there was an opportunity for a different kind of governance into which Karachi Electric, that the company that was never sold then steps into and starts working really effectively. So they implement this thing, which was actually a collective punishment mechanism. They said that areas that don't pay for electricity will now receive more loadshedding. They won't get power. And the areas that do pay for electricity, which are the wealthy areas, will get more power. And so when they introduced this policy, I was actually in the Ministry of Water and Power. We thought that for sure that they were going to be essentially violence and riots and reprisal to this, but nothing of the sort happened. People were actually relatively accepting of it. It was kind of like, okay, fair enough, but we're stealing it anyway. So off you go. And then over time, they modernize their own organization sufficiently that they're able to operate to hold to that standard and to improve the built infrastructure within their environment and to conduct these improvements in a way which engages with community actors in a very organic, like locally sensitive manner, which is like we're talking about a private equity company here. But they they accomplished all of this. So there's a lot to learn from Karachi Electric, but it hasn't been well understood and studied at this point. So at the top level, they've produced results which are fantastic, but they put in a lot of hard work to achieve that. And it didn't happen in under entirely circumstances of their own control. So my own response to the idea that privatization is the only way to carry these companies forward is like, I feel like it smacks a little bit of an abandonment of the Pakistani government's responsibility to its own citizens, right? You can't simply step away from service delivery and claim that the private sector is the panacea that's going to address all of your issues. So I have some strong reservations about it in terms of how it's proposed for the other parts of the country.

Abdurrehman Naveed: Your work is fascinating because you straddle different areas. You look at these problems at the city level, you look at the inter-provincial dynamics of of of the issue at play. And then you also look at the federal and sort of where it all aggregates together and just sticking to the point of of how the federal decision making apparatus works. Some commentators, such as I think mirrored Bernstein and I'll paraphrase what he said is that the decision making architecture is fundamentally broken. And I think the point that such commentators have made is that we have made decisions which are sticky, which are lumpy, which have 20 to 30 years of consequences such as locking the cells in with Sahiwal Coal or setting up these natural gas combined cycle plants, which at the time, given the natural gas prices, seemed like a no brainer. But seeing what we've seen for the past few years are now pretty much not been running more. Right. So given your experience at the federal level, how do we how do you see the decision making architecture, not just in terms of the bureaucracy, but also the political players at play?

Ijlal Naqvi: That's a really big question. So I think, you know, what you summarized in terms of from those comments. I mean, that's spot on. We're living with the consequences of decisions that were made a long time ago. And if you take, say, about coal as an example, its precursor is the HUBCO project. Right. So that was a 1200 megawatt power plant set up in around 1992 with massive amounts of World Bank backing. And the thing was not run right. They chose not to run it because as soon as you made decisions based on what's called economic dispatch, you prioritized the lowest marginal cost producers in your generation system. You wouldn't run HUBCO. So this enormously important, politically important, like, you know, multilateral funded project was basically not running because it was an efficient and effective, so different version of that problem with. I think that's the single biggest, like bad decision making aspect of power sector generation is not those so much as the fact that these things are not made with competitive bidding. So when power plants are built in Pakistan, they're not done on the basis of competitive bidding. So at the same time as the 1995 mid 1990 reforms happened in Pakistan, Bangladesh was doing the same thing. These reforms were being pushed by the World Bank in multiple countries. And so Bangladesh did some very similar things, but they did competitive bidding and their costs were substantially reduced as a result of the competitive bids. And you see that much more present in India, for example, as well. So when Pakistan chose not to do that, it had long term consequences. And we're still dealing with. Right. I'm afraid that like electricity I described as being top of the political agenda, but not these days, at least when we're still arguing over whether or not to hold elections within 90 days as the constitution dictates. So it's one I think it's valid to say that this is one aspect of the larger kind of political dysfunction within Pakistan. That's kind of my rationale for studying it. It informs our understanding of the larger state at work, and it doesn't operate independently from it now.

Abdurrehman Naveed: Wonderful. Well, at this stage, I'll open it up to the audience for any questions or comments.

Attendee: Can you please talk about the energy mix in Pakistan? Because there's this huge talk about not taking advantage of hydroelectric potential and there's like disputes among the provinces of like we aren't able to take advantage of the hydroelectric potential we have in our countries.

Ijlal Naqvi: Yeah. You're right. We're not. Because the map that I showed of the provincial differences and the fact that the, you know, the primary access of sort of political grievance in Pakistan is across these provincial lines. It applies very much to the way that these big dams are constructed. So the big dam is located typically in the in the northwest, but it's in the lower riparian whose agricultural concerns are not being met, by the way, that the water is distributed in the timing of the water distribution. So, I mean, it speaks to the inter-provincial relationships that I mean, frankly, just what you're asking follows from the previous question about the level of political dysfunction that exists, the inability to coordinate between provinces about the relative priorities of these various things. So any multipurpose dam has to weigh out these different things, like, you know, the water release, timing, the the usage of water for power generation versus the fact that if you're if you're if you want flood control, then you have to keep the water at a lower level anyway. And this kind of of tension, I mean, opposition to big dams is far from it's not just Pakistan, right? There's many, many examples from India and elsewhere on the World Commission on Dams famously sort of argued about the way that the the claims of dams, big dams are never met. And in Pakistan specifically and like in [inaudible], for example, in in a seismically unstable region, there's very good reasons for the opposition to that. And also now it's so mired within the tensions of provincial politics that Kalabagh dam is the most famous example. You can even raise that name without sort of the parties rising up in opposition. And it's to do with, I guess, this sediment, that history of political opposition to federal impositions of one perspective on like you're going to do this development project because we see it is in our interests and who gets the benefit from that and other parties feeling essentially left out and have grievances which they can justify and have been sort of mobilizing around for a long period of time. So, you know, there's a whole host of sort of like political infighting reasons why we can't do that as well as like good reasons related to how I relate to the way those dams function, but separate from renewables and sort of the wind and solar and stuff like.

Ricardo Hausmann: Thank you for a great presentation. I want to look at your book. I'm sorry I arrived late and you may have covered these issues before I arrived, but my my question would be, you know, many countries mess up electricity and for example, they messed up electricity more than cell phone service. And so there must be something weird about electricity. But one of the things that people have thought about is that, and there is this timing consistent hold up problem that you want to like promise investors whatever to justify investments. But once the investment is in place, you don't want to enforce the needed tariffs to make the investment viable. And the investor cannot cannot take the investment away because it sunk and that as a consequence, there is never enough strike political equilibrium, political will, to collect. And in the absence of political will to collect, there is no way of sustaining the investment except for massive fiscal transfers that then eat up into into everything else. So in the end, there's no solution unless you are able to somehow force people to pay. Is there a, I mean, involving communities. I mean, I found interesting your discussion of of this private equity company that found a way to use some social network store to guarantee enforcement. But what's in the political decision to enforce a people's obligation to pay?

Ijlal Naqvi: Yeah. So the enforcing those decisions is very difficult, right, Because in electricity doesn't sit apart from a nonfunctioning educational system or a non functioning health system, for example. These are the same ordinary people who are not well served with all these other sort of basic things. I guess one way...

Ricardo Hausmann: But they're served with cell phone service.

Ijlal Naqvi: Yeah. But, you know, quite clearly, like and most of it is is prepaid, Right? You paid your hundred rupees in advance. And you know that the system functions that way. And I think we can look at both ways in which payment systems can be made more effective, because the Karachi example actually shows that that's viable. And it's represented like when I visited Karachi to look at the electricity distribution system there. One thing which was apparent is that you see the Karachi linemen working on a on the infrastructure. He's got safety boots on, a safety helmet, he is in uniform. There's like a truck with like functioning equipment. And you look and most of the rest of the country, what is it? It's like you've got a guy in flip flops with, you know, not climbing a rickety bamboo ladder that's swing. And it's like, you know, one of the metrics that appears in the annual reports is the number of deaths from sort of linemen, deaths from working on the infrastructure. So Karachi is doing different aspects of this problem very well. There's a lot to be learned there as we're doing it. I think the second way that we can respond to this is like there are decentralized solutions, which I think would be quite effective in there. Yeah. Which like how does one allow, like, you know, the cutting of bodies, for example, the example that I'm giving is a little bit dated because now you're not quite so dependent on connection to the grid for solving your low level electricity needs. Right. If I put a solar panel on my roof, I can charge a mobile phone, I can run a phone, I can have a light at night, you know, some sort of like modicum of things that I can become independent of these of these big systems. And I think that there's a way there to at least achieve some of the welfare sort of well-being and human development aspects of the problem that's otherwise missing. But this other thing you mentioned about fiscal transfers, that's a that's a crucial aspect of this problem. And while you were looking at sort of the time that the investor has to stay in place to get their returns, the other thing that happens is that when these big projects are built out. Are you really bringing hundreds of millions of dollars into a governance environment like Pakistan without some of that money going here and there to enable that transaction to take place? Those things happen at the time of construction, right? Later, when we're talking about operations and servicing that in a fiscally responsible manner, it's probably a different government by now. Right. So you're handing on the problem down the line. So at each of these steps, like I mentioned, HUBCO, right. Who's dealing with the problems? It's the government five years later. Who's dealing with the problems of the 1994 power policy? It's the government, you know, three or five years later and you know who's dealing with Sahiwal coal? Well, first it was PTI, and now it's the PML-N again. But the the the people the idea of like being forced to take responsibility for managing that service delivery environment is missing. And what I would stress was there's not enough accountability from below. If there was more accountability from below, I think you'd be able to see much more responsiveness and effective service delivery. Right. And so long as we have systems where that's largely avoided, that won't be the case in Pakistan. So I would say.

Abdurrehman Naveed: All right. Please join me in thanking Professor Naqvi. Thank you so much for joining us.

Ijlal Naqvi Thanks for coming.