Financial globalisation and WAPDA
Before financial globalisation, electricity generation, transmission, distribution and retail supply functions were performed by the Water and Power Development Authority (Wapda) till the early 1990s. Wapda was a compact monopoly and performing all these functions in a reasonable manner. Like other developing economies, Pakistan was facing loadshedding in the peak season, which was quite normal. The World Bank proposed to the policymakers in Islamabad to follow the international trend of privatisation and deregulation in the power sector. This proposal was even supported by the International Monetary Fund (IMF) at that time. The policymakers followed their advice and framed the Power Policy of 1994. They allowed independent power plants (IPPs) and the first IPP came into operation in 1997. This was the first foreign direct investment (FDI) in the power sector. Most of the commentators, analysts and economists welcomed power production in the private sector on grounds that it will bring...