EDITORIAL: It’s no surprise that 2024 is turning out to be like any other year, at least as far as affordability of life for the average Pakistani is concerned, and retailers and wholesalers continue to defy official price lists and keep rates beyond the reach of consumers already struggling with inflated power and gas bills. And the same old script is playing out this Ramazan as well, as retailers finally release low quality fruits and vegetables that were deliberately hoarded to jack up prices, regardless of the effect on their quality.
The reason, as always, is that officials of the price regulatory machinery are asleep at the wheel and nobody’s doing anything about it. It turns out that they do fine the odd retailer now and then, but have a habit of leaving wholesalers untouched, where the problem has its roots. That, of course, leaves the former to make up for those so-called losses by overcharging consumers all over again. And the cycle keeps repeating itself.
It’s a shame that the government is blind to the reality that this is not just a market pricing problem any longer. While a large majority of the population being slowly priced out of the market for essential items is a very serious concern in and of itself, right now artificially raised inflation also threatens to eat into the interest rate regime and keep industry crippled at a very sensitive time.
Higher taxes and tariffs inflated gas and electricity bills stoked cost-push inflation and kept the State Bank from reducing interest rates at the last meeting of its MPC (Monetary Policy Committee). Now, with the next meeting due on March 18, persistent food inflation is once again souring expectations of a rate cut, throwing the stock market into a tailspin in the process and eroding all the gains of early March.
There are wider implications as well that nobody is talking about. About 40 percent of Pakistan’s population hovers just above or under the poverty line. This segment, along with the middle income class, has suffered to no end because of the high inflation of the last few years.
Now a lot of them have come to the point of struggling to afford life’s most basic needs. And history is full of terrible examples of such suffering spilling over into violent public discontent; a fact about stubborn high inflation, especially food inflation, that our policymakers ignore at very grave risk.
Let’s not forget that Pakistan’s people face this unfair situation for no fault of their own. They are subject to this cruel social structure simply because government after government did its bit to ruin the economy and leave it drowned in debt.
And it’s the people that must now pay the price, quite literally, for the structural adjustment that is necessary to keep the economy from defaulting. Yet there’s only so much that can be squeezed out of them. Clearly, things have reached a tipping point. And it is shocking that the state can do no more than “take notice” as nothing changes.
Copyright Business Recorder, 2024
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