A government of inflation

December 03, 2021

LAHORE: The finance adviser, recently, correctly pointed out inflation was on the top of the government's agenda and rightly so, as on the face of it, the incumbent regime was moving heaven and...

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LAHORE: The finance adviser, recently, correctly pointed out inflation was on the top of the government's agenda and rightly so, as on the face of it, the incumbent regime was moving heaven and earth to tie inflation to a rocket and see it going to Mars.

You cannot contain inflation if you are committed to increase the petroleum product rates on a regular basis. The sustained increase in power rates would keep the inflation high, while the increase in gas prices would inflame inflation.

The increase in regulatory duties might not curb the imports but would fill the government coffers without any major effort by Federal Board of Revenue (FBR). The resultant price hikes would be inflationary. The central bank only recently increased the policy rates plus the cash reserve requirements of the banks, but it failed to contain inflation.

In fact, the inflation reached 20-month high after these measures. We are desperate to get the International Monetary Fund (IMF) nod and are taking steps in this regard before its board meeting to get $1 billion tranche.

In doing so we are moving towards runaway inflation. Inflation might not hurt the elite, shielded from its impact based on their incomes and influence, but it certainly hurts the middle-class, the poor, and the poorest.

First it was mainly the food inflation but now the core inflation is also on the rise. The weak macroeconomic indicators are keeping investors at bay and reducing the chances of job creation. A decade back one earning hand in the family was considered enough to provide three square meals. Now the families are forced to even ask their minors to do some work.

The minors do menial work at the residences of the affluent at petty stipends, but the parents are satisfied as he/she gets an adequate meal even if it is a leftover. More children are out of school now than they were three years back. There are more beggars on the streets than ever before. We find more people quarrelling in the streets to vent out their frustration than ever. The society is slowly disintegrating.

The combined family culture is dying. High-earning brothers do not want to share their incomes with low-earning or jobless brothers. In fact, the so-called high-earners hardly survive on their incomes given the price hikes and cannot afford to share their meager resources with others.

The so-called GDP growth is benefitting few and crowding out resources for the majority. The inequality is on the rise. The rich have no worries, and the poor have no satisfaction. The rulers are taking price hikes lightly. They do not realise that price increase in chicken meat, mutton, and beef rates have forced poorer segments to stop consuming animal protein. They have no idea of the devastation cause to the health of the poor finding it impossible to buy the required quantity of wheat at current rates. This is tantamount to curtailing consumption of staple diet and living in semi-starved conditions.

The rulers are promising a bright future to whom? To the ones that would be less productive and hence less employable when and if the turnaround occurs. We are talking about 80 million semi-starved population most of which is young.

It is time to stop all public appeasing programmes, which are a drag on our resources.

The resources should be diverted towards job creation, high skill development and charity if any should be subject to conditions like educating a girl or volunteering for social work.

The free meals both from the public and private sector should be banned. The amount thus saved should be utilised for providing small equipment to the skilled for plumbing, puncture shops, painting, woodwork etc. The social work should be apolitical, and the name of the programme should not indicate the name of the party that introduced it. Private sector philanthropists should establish fair price shops to provide essential goods to the citizens at reasonable rates.

We are passing through the most painful and difficult period of our history. There is a need to unite the nation and that could only be done through fair play and decisions based on merit only. The impact of current inflation would last for a very long time because incomes have not kept pace with the rate of inflation in the last four years. All segments of the society should cooperate with each other to mitigate the miseries of the poor. The ruling elite should take the lead in mending fences with opposition.

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