I’ve had a running argument with my friends M. Aslam Hayat (one of the creators of the Fund) and Parvez Iftikhar (first CEO of the Fund) about whether it’s possible to have an effective, efficient universal service fund. My position has been that that such a thing can function for a few years, if well designed and with political commitments, but that it’s a matter of time before they go bad. As we used to say when we were designing Sri Lanka’s fund in 2003, when the cheese is out, the rats are inevitable.
I have pointed to the successes of the Pakistan Fund in its early years in many of my talks, but I have always qualified the claims being made of its behalf. Looks like I have more qualifications to make to the worldwide advocacy of universal service funds, supported by people who should know better.
Newly elected government has shocked the telecom industry by moving over Rs. 50 billion of Universal Service Fund to Ministry of Finance to pay off circular debts.
Sources familiar with the matter said that Economic Coordination Committee (ECC) has decided to shift all the money from Universal Service Fund accounts to Ministry of Finance to pay off debts, primarily to resolve energy crisis.
Sources said that – theoretically – Universal Service Fund will be able to get the money back from Ministry of Finance when and if it ever requires.
Experts, on other hands, consider this is a theft from telecom industry and that USF money – which telecom operators pay for the development of telecom service in far-flung areas of Pakistan – will never be recovered. They said that disbursements of funds to USF will take ages due to tiring procedural requirements in the government sector.
It merits mentioning here that previous government had also considered moving the USF money to National Consolidated Fund.