EDITORIAL: It took the government four months of runaway inflation to realise that disbanding the National Price Monitoring Committee (NPMC) for no apparent reason was not a good idea.
And now Planning Minister Ahsan Iqbal, who’s been a busy man lately, has issued orders to revive it to keep a close watch on prices of essential commodities, especially food, and recommend action against hoarders when and where necessary; which is probably the only thing it can really do in these circumstances.
Much of the high prices are caused by the international commodity super cycle, spikes in electricity and gas tariffs on orders of the IMF (International Monetary Fund), relentless devaluation of the rupee, and, of course, unforgivable hoarding by special interest groups, also popularly referred to as mafias.
No committee can do anything about gyrations in Brent crude because of the Russia-Ukraine war, of course, or how much the IMF will twist the government’s arm with its ‘prior conditions’, or even the slide of the local currency. But NPMC can do a pretty good job of monitoring wholesale and retail price differentials in different districts and also spot the notorious bad boys that manipulate market prices at times of just such uncertainty.
Food price inflation over the last few years, especially, has displayed trends where the same items are sold for markedly different prices in markets just a few kilometers away from each other. And the only reason is willful distortion of prices as authorities conveniently look the other way, as usual.
Reviving the committee so soon after sending it packing was not without embarrassment for the government. But it was still important not just to check prices but also to give the impression that it’s going the extra mile as inflation breaks records just when unprecedented floods are wrecking the whole country. But with more climate-related damage expected, and domestic politics all but compromising the IMF programme as well, there is still a lot of uncertainty in the market.
And it’s in precisely such circumstances that hoarders are busy greasing palms and buying influence for their own windfall. It’s just that things are so bad now that in making their own killing they’d, quite literally, be killing a very large number of people that they’d only be fleecing in ordinary times.
That is why the government needs to be on top of its game when it comes to clamping down on hoarding and artificially jacking up prices. Because that is the one area that it can still do something about as it waits for international trends to turn in its favour.
Most estimates, including the IMF’s, see inflation peaking at around 20 percent by the end of this fiscal year. While there’s still quite a while to go before it starts falling, even if these estimates are true, it must be ensured that no non-market factors are allowed to add to this burden. But that would require a lot more than just getting the price committee up and running again.
Remember it used to meet every Monday in the PTI (Pakistan Tehrik-e-Insaf) government, but that didn’t make it very effective in terms of controlling or even discouraging hoarding. So clearly a lot more than lifting the shutters is needed. These problems will be a lot more pronounced in flood-hit areas, where the writ of the law is already weak as all arms of the government are busy in relief work.
Yet it’s the government’s responsibility, at the end of the day, to make sure that nobody is allowed to steal from the people in the form of artificially raised prices; that too of essential food items. So far this administration, even more than its predecessor, is falling all over itself in controlling inflation. And it should know that what hurts the people between elections tends to hurt governments at elections.
Copyright Business Recorder, 2022