With his pix
Waheed Hussain
Inflation is a headache for every Pakistani. Price hike is affecting mental health of citizens. There is no remedy, no solution except adding up the cost of living. As expected, the prices of petroleum products have been increased up to Rs. 20 per litre. The fresh price of petrol stands at Rs. 290.45, while the diesel has been fixed at Rs. 293.40 per litre. One may like it or not but the fact of the matter was that, the International Monetary Fund (IMF) Standby Arrangement (SBA) program was responsible for the massive increase in the petroleum products. Similarly, the electricity and gas rates have also been jacked up due to IMF latest 10 months $3 billion (SBA) program. Whatever, the former coalition government agreed with the ‘Fund’, the same has been implemented to continue working with the IMF, otherwise, once again voices of default would start falling on our ears. Holding the caretaker Prime Minister Anwar ul Haq Kakar responsible for putting this additional financial burden on the public was not a fair opinion.
There were two aspects of this issue, first increase in petroleum products, electricity and gas prices and its negative impact on the masses. The second was bad economic and financial policies, decisions and management by the successive governments pushing the country into bitter crisis. Every new government tried to address the issue of economy by taking loans from international financial institutions including (IMF) and friendly countries. Various governments completely failed to increase exports, attract foreign direct investments and remittances. It seemed that getting loans have been the easiest path that all the financial managers opted to run the governments and complete their tenure.
Whenever, the prices of the petroleum products were increased, there were immediate raise in the public transport fare. The cost of transportation of various goods goes up. The factory owners, wholesalers and the retailers (shopkeepers) without wasting a minute increase the prices of products including the daily used food items.
It’s being observed that the rates of flour, rice, sugar, cooking oil, pulses, milk, spices vegetables, mutton, beef, chicken and other products have increased from 300 to 500 percent in the last few months. The cost of living in the country especially in big metropolitan cities like Karachi, Lahore, Islamabad, Peshawar and Rawalpindi have gone up.
In the last two months the public have witnessed 300 percent increase in the electricity bills. A family which used to receive Rs. 10,000.00 electricity bill in July 2022, this July the bill was increased to Rs. 35,000.00. Actually, the IMF has directed the government to reduce the circular debt of power and gas sectors, which has crossed the figure of Rs. 4000 billion. This amount was piled up, due to bad management of the energy sector by the successive governments. However, the political pattern in the country was that every new government used to hold the previous government responsible for the failures, yet, it has failed to bring any reforms or changes in the policies, rather committed the same blunders in handling the energy sector. The result was that the public was forced to pay for the land and generation losses, theft, and massive corruption in the electricity and gas departments.
Persistent political considerations-favoritism have completely turned the energy sector dysfunctional. The sector has been bleeding, so now the public was bleeding too by paying huge amount of money through unjustified utility bills. The masses were taxed for the crimes committed by others.
The prices of the petroleum products have been increased because of two reasons. First the devaluation of the rupee against the dollar and secondly, extra revenue generation agreement by the government with IMF by imposing Petroleum Development Levy and other taxes. It has been reported that in the current financial year, the government was tasked to collect extra Rs. 1700 billion through the PDL tax on the petroleum products. Apparently, we have experienced and observed that most of the people including the politicians blame IMF for the price hike in the country. What the IMF demanded was that the government should stop providing all kinds of subsidies to various sectors including the power sector and keep a fine balance between its income and expenditure.
The government should reduce the budget and current account deficit. The government spending should be according to the income generated in the financial year. It should stop borrowing money from the lending agencies and entirely depend on its own resources. So, what was wrong with the advice. We need to set our house in order. The problem was not with the (IMF) or any other international financial institution or the friendly countries from whom we have been taking loans.
The problem was with the successive governments and their financial managers, who could not provide any alternative solution. They always opted for the loans. Today, the biggest issue was payments of loans or interests, which needs billions of dollars. In the current financial year government needs $24 billion for the debt servicing. Since we don’t have the dollars, therefore, the governments were forced to take loans for paying the previous loans and this cycle of payments had put unbearable burden on the public in the shape of price hike.
There was a question to all the previous finance ministers and bureaucrats siting in the finance ministry that if the IMF was the only solution to economic and financial ills, what they were doing for years and years serving the government.
Just getting loans from the IMF and put the entire burden on public was madness and criminality.
We must increase our exports to generate dollars. It needs comprehensive trade, commerce, industry and investment policies. It needs to reduce the discount rate providing extra funds to the business community to invest in the new technology for producing the best quality products to compete in the international markets. We need to reduce our imports at least the food items which consume $10 to $12 billion a year. Pakistan is an agriculture country; it should focus on improving its production to meet its own food requirement. We need to move to the alternative energy sources. The furnace oil, gas and coal power generation were very expensive. Most of them have been imported by paying billions of dollars. Hydel and solar power systems were very good options. We need to focus on the information technology (IT) projects and move on to hi-tech industry. Our Chinese friends can help us in these sectors. There were hundreds of ideas to improve the economy and get rid of the loans, but what we really need was the political stability in the country. The power struggle among the political parties and various stakeholders have damaged the country’s image. When the governments instead of focusing on the actual issues indulge in fixing the opposition, the result was, what we were witnessing today in the country.
The constant political instability has given birth to the uncertainty. The uncertainty was a poison to the economy. Until there was a political stability the economic progress and prosperity would be a dream, leading towards further inflation and price hike. In this situation the caretaker cannot give any relief or hope to the nation, rather it would add to the miseries inviting public rage and criticism.
It was a request to all political leaders and various stakeholders to please for God’s sake, give up your egos, just think about the country, its image, and public.
