Unchecked

Just recently read an article by an accomplished senior journalist, a good friend, who had looked at the economic situation of the common man with a different microscope; apparently, he observed motorcyclists slanting, or rather laying down their motorbikes on the road to eke out a few additional drops of fuel - he concluded that this action evidenced the hardship of the entire populace subsequent to the recent price hike.
For the record, we were doing that very same thing three decades ago; so either it is our habit, or Pakistan has always been in an economic mess.
Nonetheless, price signals are meant to check consumption; to economize.
But as a nation we miss the point altogether.
For the fiscal year ending 30th June 2012, when international oil prices were above US$ 100 per barrel, our imports relating to the petroleum group were US$ 14.4 billion, about 36% of all imports; in 2018, while as a percentage of imports, petroleum group fell to 23.5%, we still imported US$ 13.3 billion worth - the problem is that during that year oil roughly averaged US$ 50 per barrel in the international markets.
Rather than taking advantage of low fuel prices and shoring up much needed savings for investments, we did the exact opposite: we started guzzling oil.
Whilst those associated with the petroleum and automobile sectors must have thanked their stars for this bonanza, the nation as a whole suffered a higher trade deficit and more external debt.
And all this time the opposition and opinion makers across the board wanted the government to reduce fuel prices even more - utterly awesome!
But before moving on, a short break to brag!
A couple of weeks ago, in the article titled "The Plan", a concern was tabled that under the IMF program we were likely on the path to doubling our debt, getting deeper into recession, and significantly marginalising the disposable incomes of the middle and lower classes; this was done satirically, of course, for security reasons - mine.
An article at Foreignpolicy.com posted on 7th June 2019 argues that over the past year Egypt's debt has increased five-fold, debt servicing is now eating up 58% percent of the budget, and that Egypt will soon be bankrupt, moving towards total state failure; consequently, the living standards of ordinary Egyptians are plummeting as elites line their pockets.
"Meanwhile, the International Monetary Fund has a lot to answer for. The IMF has manipulated the structure of the Egyptian economy; it posts growth rates for Egypt, but these are exaggerated by levels of debt in the same way that one might exaggerate their income by borrowing beyond their means", extracts from the aforementioned article.
Egypt has been listening to the IMF for one year; we just started.
Is someone out there listening?
I hope so.
Getting back to our penchant for consuming recklessly, oil is not our only sin.
We imported US$ 56.5 billion worth of goods during the fiscal year ending 30th June 2018, and are going strong in 2019 till April, with imports totalling US$ 44 billion.
If not the only sin, all kinds of oils are our specialty!
Our import of palm oil was a whopping US$ 1.9 billion during fiscal year 2018, an increase of 5% over last year; more than the population growth.
Worse still, miscellaneous food item imports were US$ 1.9 billion as well during this period - apparently we even import our burger patties!
As a nation we will soon be obese; because we are not stopping in 2019 either!
And we also love having tea, all of which we import; with lots of sugar which, fortunately, is mostly produced locally - albeit producing sugar is a huge waste of a scarce resource, water!
We are chic and hence love wearing branded apparel - our imports of other textile items for the year ending 30th June 2018 were US$ 1.5 billion; and we continue to remain stylish in 2019.
We definitely love our fancy phones, simply because we imported US$ 0.74 billion worth during year ending 30th June 2018; what is mind boggling is that after more than two decades of mobile telephony, we still cannot make a single cell phone in Pakistan.
Obviously, because we are so modish, we must also travel in style - we imported road motor vehicles worth US$ 2.2 billion in 2018; notwithstanding that the domestic automobile sector, which, by the way, imports most everything and only assembles in Pakistan, is also booming.
And the government should spend more on roads so we can whizz around in our flashy cars; what are they doing with our taxes that we love to pay?!
We should get rid of the PIA who cannot provide the services that we expect and deserve; we therefore prefer travelling by Emirates and similar foreign airlines - and who cares if our import bill for travel services for the year ending 2018 was a whopping US$ 2.3 billion?
Well, we bloody well should care; we cannot print dollars to pay for this lifestyle, and are too lazy to work hard and manufacture domestically.
So, who is at fault?
For my money, both: the State and the people!
The populace, because we have lost sight of our traditions and have been brainwashed to believe that quality of life alone is the numero uno objective and purpose of living.
The State, because it should not have allowed this reckless consumption; sitting on the fence cannot work for long, the bogey man in the form of current account deficits, currency depreciation, and inflation will eventually come calling with a vengeance, at which time the voters will blame the very government that pampered them.
But can the State have done anything?
Well, if the State can enforce one dish at weddings with closure of all activities by 10 PM, which I for one greatly appreciate, why can it not change our other wasteful spending habits?
The next generation won't even know that traditionally wedding dinners were served after midnight, and that too, was a buffet fit for royalty!
However, price signals are the only thing that will work for a populace perhaps today comparable with spoilt brats.
Sometimes price increases is a strategy, obviously while simultaneously insulating the deserving vis-à-vis their necessities; consumption cannot be allowed to continue unchecked.
(The writer is a chartered accountant based in Islamabad. Email: [email protected])