Business Recorder Editorials 5th August 2026

The power sector’s unfinished business

EDITORIAL: The latest debate surrounding Pakistan’s power sector offers a useful reminder that reform is seldom a linear process. Within days, the Power Division defended its reform agenda by highlighting a sharp reduction in distribution company losses over the past two years, even as it acknowledged a Rs61 billion increase in circular debt during FY26.

At the same time, Nepra, the power regulator, questioned whether the reported improvement in losses reflected genuine efficiency gains or merely the shifting of losses to high-theft areas through extended load shedding. The contrast is striking, but it need not be contradictory.

There is little doubt that meaningful progress has been made. The power sector inherited structural weaknesses that had accumulated over decades, with mounting circular debt, poor recoveries, excessive losses and an unsustainable subsidy burden. Against that backdrop, improvements in DISCO finances, tighter fiscal discipline and a significant reduction in the circular debt stock over the previous fiscal year deserve recognition. Give credit where credit is due.

Be that as it may, reforms cannot be judged solely by accounting outcomes. They must ultimately translate into a more efficient electricity system, lower financial losses, improved service quality, and, over time, more affordable electricity. It is on these metrics that difficult questions continue to arise.

Nepra’s observation that reported reductions in losses may partly reflect heavier load shedding in high-loss areas rather than genuine operational improvements deserves careful consideration. If accurate, such an approach may improve financial indicators in the short run, but it cannot substitute for investments in modern networks, improved metering, stronger enforcement against theft and better governance of distribution companies. Persistent outages merely suppress demand without addressing the underlying causes of inefficiency.

Equally concerning are the regulator’s observations regarding transmission constraints. Pakistan has invested billions of dollars in expanding generation capacity, much of it based on relatively efficient technologies. Yet the inability to fully evacuate cheaper electricity from the south continues to force reliance on more expensive generation elsewhere in the system. Consumers inevitably bear the cost through periodic fuel cost adjustments, reinforcing the perception that efficiency gains at one stage of the value chain are being offset by bottlenecks at another.

The increase in circular debt also illustrates the complexity of the challenge. The Power Division attributes the deterioration primarily to a reduction in budgeted subsidies rather than weakening operational performance. If that is indeed the principal explanation, it demonstrates how dependent the sector remains on timely fiscal support even as operational indicators improve. Financial sustainability cannot rest indefinitely on budgetary allocations, particularly in an environment of constrained public finances.

This points to a broader reality. Pakistan’s power sector reforms have entered a more demanding phase. The relatively straightforward measures—tariff rationalisation, renegotiation of power purchase agreements, improved recoveries and fiscal support—have largely been undertaken. The remaining reforms are institutionally more difficult. They involve modernising transmission infrastructure, restructuring distribution companies, strengthening governance, improving operational autonomy and creating incentives that reward efficiency rather than merely limiting losses.

The profound challenge now is one of credibility. Policymakers, regulators and sector institutions must increasingly rely on a common set of transparent performance indicators that command public confidence. Conflicting narratives about whether losses are genuinely falling or merely being relocated do little to reassure consumers already grappling with some of the highest electricity tariffs in the region. Independent verification, greater transparency and timely publication of operational data would go a long way towards narrowing this trust deficit.

It also bears repeating that reform should not be viewed as an end in itself. Its ultimate purpose is to provide consumers with reliable electricity at the lowest sustainable cost while ensuring the sector remains financially viable. If tariffs continue to rise despite improvements in sector finances, consumers will inevitably question whether the promised benefits of reform are reaching them. That perception, whether entirely fair or not, cannot be ignored.

Pakistan’s power sector has undoubtedly travelled some distance over the past two years. Yet the journey is far from complete. The next chapter of reform will be judged less by reductions in headline numbers than by whether the underlying inefficiencies that continue to burden consumers are finally addressed. Only then will the sector’s progress become both measurable and broadly credible.

No double standard on hate speech

EDITORIAL: The Australian Federal Court’s decision to uphold the finding that Senator Pauline Hanson engaged in racial discrimination by telling fellow Muslim Senator Mehreen Faruqi to “piss off back to Pakistan” is a significant affirmation of the principle that hate speech has no place in a democratic society.

The court rightly recognized that expressions intended to humiliate, intimidate, or marginalize individuals on the basis of their identity are not protected simply because they are framed as political opinion or personal expression. As the judges aptly observed, restricting abusive and insulting language can strengthen, rather than weaken, the free exchange of ideas by ensuring that vulnerable groups are not silenced through intimidation.

The judgment reinforces an important principle: freedom of expression is not an absolute right.

Every democratic society places reasonable limits on speech that incites hatred, discrimination, or violence against individuals or communities. Such limitations are essential to preserving social harmony, protecting human dignity, and ensuring that public discourse remains respectful and inclusive.

However, this commitment to combating hate speech must be applied consistently rather than selectively.

While racial abuse directed at an individual because of ethnic origin or religious identity is rightly deemed unlawful, similar standards should govern speech that deliberately insults Islam and its revered figures under the guise of artistic freedom, satire, or unrestricted expression.

Across many Western democracies, offensive remarks targeting racial or ethnic minorities increasingly attract legal and social consequences, yet deeply offensive depictions of the Holy Prophet Muhammad (peace be upon him), desecration of the Holy Quran, and other acts that wound the religious sentiments of nearly two billion Muslims are frequently defended as exercises of free speech.

Such inconsistencies suggest that some forms of dignity deserve legal protection while others do not. For Muslims, love and reverence for the Prophet Muhammad (peace be upon him) and respect for their sacred symbols are inseparable from their faith and identity.

Deliberate insults directed at these sacred figures are not intended to foster meaningful debate; they are calculated to provoke, demean, and inflame emotions. Far from enriching democratic discourse, such provocations deepen social divisions, fuel resentment, and undermine the very values of mutual respect that pluralistic societies seek to uphold.

The challenge, therefore, is not to suppress genuine debate about religion, history, or public policy. Open discussion and respectful criticism remain indispensable to democratic life.

The issue is whether societies should permit expressions whose primary purpose is to insult religious communities and their revered personalities while simultaneously prohibiting comparable abuse on racial grounds. The Australian court’s ruling offers an opportunity for broader reflection. If, as Senator Faruqi observed, “hate speech is not free speech,” then that principle should apply universally, without distinction between race and religion.

Equal respect for all communities requires equal protection against deliberate expressions of hatred, ensuring that freedom of expression remains a force for dialogue and understanding rather than a licence for intolerance.