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Pakistan power shortages keep growth prospects dim

A lack of electricity capacity means the economy can't get off the ground. The textile industry is hit especially hard.

August 31, 2011|By Alex Rodriguez, Los Angeles Times
  • Munir Ali, a machine operator at Abdul Latif's textile plant in Faisalabad, waits for the power to come back on. Rolling blackouts are common because the government can't meet the nation's electricity needs.
Munir Ali, a machine operator at Abdul Latif's textile plant in Faisalabad,… (Nadeem Ejaz )

Reporting from Faisalabad, Pakistan — The machine operators lean back lazily on rolls of cotton fabric, shooing flies from their sweat-soaked tunics as their boss, Abdul Latif, paces between rows of silent electric looms covered in lint.

The textile plant owner knows it's just one of several rolling blackouts that will darken his plant today, as they have every day for four years. Along his street, other textile plants have either closed or begun selling their looms for scrap. Latif scrapes by, but the outages have cut his plant's output in half.

"The situation is very bad," Latif says. "We're losing contracts because of these outages. We can't deliver on time. If it continues like this, we may have to shut down."

One of Pakistan's biggest scourges has nothing to do with suicide bombers or militants wielding Kalashnikov assault rifles. Because the country cannot produce the electricity needed to support a population of 177 million, the government intentionally shuts down power in staggered intervals, often for hours at a time.

The rolling blackouts are most frequent during the summer, when the whir of air conditioners in 100-plus-degree heat boosts demand for power. Apart from districts with top government and military offices, virtually every neighborhood and village suffers.

The stopgap policy prevents the country's moribund economy from getting off the ground. And as long as the economy sputters, millions of Pakistanis remain mired in poverty and joblessness, leaving the country's disaffected youth vulnerable to recruitment by Islamist militant groups.

President Asif Ali Zardari's government has given Pakistanis little reason to hope for a solution anytime soon. This summer, government officials said that it would take at least seven years to build up the electricity generation capacity needed to eliminate the blackouts.

Various factors explain Pakistan's power woes. During Gen. Pervez Musharraf's rule from 1999 to 2008, strong economic growth fueled an upsurge in consumer spending that had Pakistanis flocking to stores to buy air conditioners, refrigerators and other appliances. But Musharraf failed to pump money into boosting generation capacity to keep up with demand and the country's booming population.

Zardari inherited the massive gap between supply and demand, but his cash-strapped administration hasn't moved fast enough on hydroelectric dam projects and has yet to shore up the country's aging distribution network.

Other factors make the situation even worse. About 15% of the electricity generated is lost to theft, says Ejaz Qureshi, a spokesman for the state-owned Pakistan Electric Power Co. In addition, the government often fails to pay its bills to private power producers, which means those companies can't buy sufficient fuel for their plants. At times, they cut off electricity to the offices of government agencies that owe them money.

The havoc wrought by the shortfall is particularly acute in the country's textile industry, a pillar of Pakistan's fragile economy.

Faisalabad, Pakistan's third-largest city and home to its textile sector, has seen 200 of its 4,000 textile plants close in the last three years because of the blackouts, says Wahid Raamay, chairman of the city's Council of Loom Owners and a plant owner.

During that period, 100,000 workers have been laid off, about 10% of the city's textile work force, Raamay says.

Plant owners forced out of business face a grim future. In a country where many people distrust banks, many plant owners sell their personal property — gold, jewelry, cars — to buy the machinery needed to start the business. If their plants close, they may find themselves at rock bottom.

"They all used to have good cars, good homes, and now everything has disappeared," Raamay says. "Now they ride motorcycles to get around."

Five months ago, Malik Mohammed Kashif was forced to shut down his plant, lay off 80 workers and sell his 66 looms to scrap dealers.

On a sun-baked afternoon, Kashif strolls through his darkened, empty building and winces as he speaks of the future.

"As for me, I'm finished," says Kashif, a 30-year-old father of four. "With the shutdown, we lost $350,000, nearly everything we had. We're at the bottom now because of this."

This summer, public anger over ceaseless power outages boiled over. In Mianwali, in Punjab province, throngs of demonstrators calling for a stop to the outages clashed with baton-wielding police in early July. Two people were killed and 22 were injured. In Karachi, four people were killed during protests and work stoppages in early June that brought sections of Pakistan's largest city to a standstill.

In Faisalabad, the extent of blackout-induced layoffs in the textile industry has reached the point that plant owners often work the looms alongside their laborers.

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