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Pakistan

August 6, 2019

The Bombshell Down the Streets of Pakistan

Pakistan

Tue, Aug 06, 2019

Beware! She is armed and dangerous and has apparently taken the whole nation by storm (literally!).

You are bound to be beguiled by her treacherous good looks, materialistic mannerisms, perilous panache, seductive style and woeful ways that, combined together, have the power to take you for a sucker – with utmost ease of course.

But she is definitely driven by a cause to say the least! Some argue that she has come of age - ripe with beauty and ensnaring candor. Well, she’s nothing less than a hit. No wonder she scored “9.41” within the first two quarters of this year (2019)!

This charmer is called ‘inflation’.

So, while she’s getting all healthy and shaped up, what do we commoners do?

We can surely run but we certainly can’t hide because she would entice us back to her charm and clasp our body and soul (and pockets) while she can.

Why is inflation so bad from the perspective of a common man?

In theory, inflation just seems like it would not matter to you since it is somewhat predictable. So, if you predict that it is going to be around 10% next year, you simply demand a raise from your boss. Right?

Wrong.

  • Just because you demand a raise, that might match the predicted inflation rate next year, doesn’t mean you would actually get it.
  • When inflation is at a high, it means prices of commodities would go up frequently (even every month or week) but wages and salaries usually go up once a year or in some cases in a couple or more years. Hence, people always feel they’re in a constant state of ‘catching up’. (This would ring a bell to many people as many organizations in Pakistan over-exploit their employees by not giving them their due raise on time)
  • When people like economists or analysts say that inflation is predicable, this can be wrong in a whole lot of different ways. Whether one’s estimate is high or low (about inflation), things are still bound to go awry. Suppose, one is wrong in a good way, such as having negotiated a raise of 10% while in actuality, the inflation turned out to be 8% - this might still be trouble as that organization may start laying off employees at this point!

Hence, like death, inflation is not easy to give a dodge to and is almost certain ‘when the time comes’. It may occur when there is too much money in an economic system leading to an escalation in the price of goods. In this context, if a household’s two primary sources of wealth creation, i.e. asset and income appreciation, rise at a rate equal to or greater than inflation, the negative effects of inflation can be neutralized. But unfortunately, as many of us have already experienced time and again, this may usually not be the case in that while minimum wages have increased, the overall price of goods has eclipsed the average salary increases of recent years and the keyword here is that people have already lost their ‘purchasing power’ by this time.

Exactly what the people of Pakistan have been going through these days. August 2019 opened with a further increase in the petroleum prices, and while prices have a ripple effect, this would further escalate price of other commodities. So, no matter it is imported or local, basic or luxury, the price of all consumer goods is bound to further increase while also worsening the plight of a common man.

I would therefore call upon the current government to take notice of this behemoth predicament faced by different segments of people in the country and put in place whatever tactical gambit to counter this socio-economic quandary pervading our economy.

Meanwhile, a word of advice to the poor nation:

While I don’t know how long this will go on for but as long as this ‘bombshell’ of a trouble is in effect… take a licking and keep on ticking!

May the troubles end soon.


Note: The views expressed are those of the author’s and do not necessarily reflect the official policy or position of The News.