A strike in the “City of Lights”

June 16, 2011

Pakistan's aggressive drive to impose neoliberalism in the pursuit of profit has sparked a determined resistance in Karachi, reports Adaner Usmani.

FOR ALMOST 50 days, Karachi--Pakistan's "City of Lights"--has played host to a trenchant display of working-class militancy. Some 4,500 workers from the Karachi Electricity Supply Corporation (KESC) have found themselves waging a rearguard battle against management's decision to sack them from jobs many have held for decades.

A 20-day hunger strike was followed by days of continuous protests, one citywide strike and an open-ended protest camp since June 9 on the road ringing the corporation's headquarters.

KESC, controversially privatized by the dictatorship of Pervez Musharraf some six years ago after more than 50 years of public ownership, has been run since 2008 by a management team appointed by Abraaj Capital, a UAE-based private equity firm.

And despite lofty proclamations that competent, foreign investors would solve Karachi's electricity woes, all signs suggest that the current ownership's methods are par for the private equity course. Its commitment to turning a quick profit promises dark times ahead--for workers and consumers alike.

KESC workers and supporters camped out on the road in front of the company's headquarters
KESC workers and supporters camped out on the road in front of the company's headquarters

The recent protests have their origins in a late-December decision to declare thousands of workers (drivers, sanitary workers, security guards, office attendants, etc.) "surplus" to requirements at the corporation--despite public promises made amid the fanfare of the original takeover that all 17,000 employees of the utility would be well looked-after.

Management's move to hire thousands of subcontractors in their place renders the rationale transparent. Many of the fired workers enjoyed reasonable salaries and relatively generous benefits. Their replacement by a low-wage, casualized workforce is an unambiguous example of what private ownership portends.

It's worth noting that management's strategy is illegal under Pakistani labor law, which sets fairly stringent conditions on the use of contract labor (i.e., only permitted for jobs that aren't permanent in nature). Of course, in a country whose constitution calls on the state to "ensure the elimination of all forms of exploitation and the gradual fulfillment of the fundamental principle, from each according to his ability, to each according to his work," Pakistanis have long since understood that rights are only as good as the movement that demands them.

Unsurprisingly, given the current weakness of the trade unions and the left, employers systematically make use of casual forms of employment in order to escape a whole host of legal obligations to their employees (i.e., pensions, benefits and collective bargaining).

MANAGEMENT'S INITIAL moves were met by concerted resistance waged by an alliance of the labor unions that represent KESC's workforce. The early signs were promising--amid large public protests, Karachi's political class scrambled to curry favor with the city's masses, ordering the 4,500 rehired.

Yet events soon illustrated either the extent of the politicians' impotence or the shamefulness of their opportunism. A few days after the workers had celebrated their "rehiring," KESC's CEO clarified that the announcement was political theater, and the 4,500 wouldn't actually be spared.

These events form the backdrop to the recent escalation. In the immediate aftermath of the initial announcement, the workers had sought and received from the National Industrial Relations Commission (NIRC) a stay order formally blocking the firings. But absent any commitment to enforcement, this mattered not a jot to management. Once the political storm over the protests subsided, it soon proceeded with its plans uninhibited.

The exhaustion of the legal road moved the trade unions to escalate. The hunger strike was launched in late April, but after this and the subsequent protest camp were summarily ignored by management and Pakistan's politicians, the struggle hit its peak last week, as the city was shut down by the union's call.

Management and its ideologues in Pakistan's intelligentsia made hay over a few incidents of violence and intimidation, but the facts are before us: a city of roughly 20 million, regularly plagued by ethnic strife and tit-for-tat violence, ground to a halt on the call of a trade union. Certainly, much of the strike's success is owed to the sympathetic stance taken by several political parties--without their organizational infrastructure, the action would have been impossible.

Nonetheless, this was a significant event in the history of the Karachi working-class (the squeamishness of many liberals aside, who have since condemned the workers for causing unnecessary hardship and collaborating with ethnic and religious parties).

The strike was followed by a decision, taken only a few days ago, to move the protest camp from the Karachi Press Club to KESC's headquarters. This is where the workers find themselves today--camped out in front of a management that has proved singularly intransigent. Several factors suggest that the days ahead will be difficult ones.

For one, the CEO of KESC, Tabish Gohar, is well-connected to the Muttahida Qaumi Movement (MQM), the quasi-fascist party that dominates Karachi's political scene. Whatever the public posturing of the city's politicians, this relationship probably immunizes management from the threat of significant sanction.

Secondly, since third-party contractors have replaced the 4,500 workers, the disruptive effect of their protests is scant. While management has cited the protests (and alleged acts of sabotage) as the principal reason for elevated levels of power outages in recent weeks, it is difficult to take this seriously. Of course, this in turn means that--absent further escalation or other pressures--KESC's management is in a position to hold out indefinitely.

The same can't be said for the union. While the 4,500 workers have thus far shown remarkable solidarity, months of unemployment in a society without a social safety net have obviously taken a toll, especially since most of the workers were the principal breadwinners for their families. Their commitment to turning out at the picket line, day after day, is a great credit to their struggle, and a testament, more generally, to the unflinching willingness of ordinary people to fight in the face of extraordinary odds.

WHATEVER THE eventual outcome, the battle over KESC serves as a stark illustration of the barbarity of Pakistani neoliberalism. KESC was simply the latest in a slew of hundreds of public enterprises that have been handed over to the private sector in recent decades. The process began under Zia-ul Haq's dictatorship, but slowly. It took its real victims in the 1990s and 2000s, as the Pakistani economy was mortgaged to international financial institutions like the World Bank and International Monetary Fund.

KESC's recent track record illustrates the pitfalls of this policy shift. For one, the decision to sack thousands of workers in the context of an economic recovery is not only unethical, but economically counterproductive--as any reasonable economist would tell you (not that there are many around, mind you), high levels of employment in the public sector is good, counter-cyclical commonsense. This logic, it goes without saying, is precluded by privatization.

Moreover, the elevation of profit-making above other imperatives is simply incompatible with responsible management of the utility itself. For example, in recent months, Pakistan's natural gas producers have failed to adequately supply KESC. The company has, in turn, refused to run its alternative sources of energy at full capacity, citing the high cost of furnace oil (an increasing proportion of which, under recent adjustments to the tariff, is passed on to the consumer anyway).

As a result, most areas of Karachi suffer hours and hours of power outages--in recent weeks, many neighborhoods have been without electricity for the majority of the day. While it's true that the government bears a share of responsibility for the city's woes, it's no less true that much of the problem is intrinsic to the logic of private ownership: installed capacity is only as good as the money it can make, not the needs it might serve.

Ideally, in a country like Pakistan, utility companies would supply their services on aggressively pro-poor terms, charging the rich much higher rates than the poor. While there is some pro-rating in KESC's payment structure--for example, charging a higher rate for consumers that consume a lot of power--this is far from KESC's priority.

Instead, management's commitment to steadily raising tariffs in recent months has meant increasingly unmanageable bills for Karachi's poor. Meanwhile, elite neighborhoods are exempt from the worst of the load shedding precisely because their need for electricity is backed by an ability to pay.

It is in the context of this widespread disenchantment with the utility company that the workers' struggle enters its endgame. The promise of an alliance with Karachi's disgruntled residents is a real one (best illustrated in last week's strike), but it remains to be seen whether this can be leveraged to significant, sustained effect. On the other hand, there is the danger that management will succeed in scapegoating workers for the power crisis--KESC's website is plastered with condemnations of the disruption caused by "miscreants."

Only a few days ago, the Sindh High Court ordered that the protesters be dispersed. It's encouraging that the police have thus far not acted on this order, but it probably speaks to the readiness of the establishment to wait the workers out.

Either way, the coming weeks will be pivotal. A victory for KESC's workers, on the heels of a successful struggle in Pakistan International Airlines (PIA) some months ago, would be a great boon to the trade union movement.

But whether they win or lose, these workers' heroic struggle makes clear that, in a Pakistan otherwise dominated by news of bombings and war, the path to a more humane society will have to be paved by a working-class movement that is, despite everything, still alive and kicking.

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