Opportunist economy nurtures cartelisation, corruption

LAHORE: Pakistan is neither an open economy nor an elitist one, but it is essentially an opportunist economy. All stakeholders are free to profit from any opportunity that comes their way in this unregulated system.

We blame the big corporations for exploitation of consumers; their behaviour is just the reflection of the general attitude of its population. We can blame the sugar barons for high sugar rates, but what about the petty transporters commuting passengers on three wheelers.

Petrol rates have declined by Rs42/litre, but their fares are the same as three months ago. The fares of intra city public transport have been reduced by the administration, but these are not in line with the massive decline in diesel rates.

Pakistan officially has harvested higher wheat crop than last year, but the wheat rates started rising when the farmers had sold their produce at government support price. Wheat procurement and marketing is managed by middlemen not a tycoon.

Vegetable vendors are smallest entities in the marketing circle; however, they sell their goods in the residential colonies at much higher than normal rates. Every segment of society is fleecing the consumers at will without the fear of any reprisal from the state.

An opportunist economy flourishes when the state loses its writ completely. Everyone whether a factory owner or a retailer bounces on any opportunity to make unreasonable profits.

The state has no clue what is going on. It looks the other way where it has the evidence of high profiting.

The sad reality is that all the profit goes into the pockets of the sellers. They do not share their booty with the state by depositing more tax revenue.

In case of excessive heat the price of ice skyrockets, in case of heavy rain the transport fares double for areas inundated by water. The day dollar rate rises, prices of every imported item or an item with an importable component imported at lower dollar rates, jumps.

In recent times dollar touched Rs166 before it gradually came down to Rs154 after the hot money (at very high interest rate) started pouring in. Prices of all items were increased when dollar touched its height before influx of hot money.

The dollar rate gradually declined to around Rs154 by March 2020. The rates of all imported or semi imported items remained unchanged. Now that the dollar has again started rising against rupee, the rates of all imports have also started increasing. Is this justified?

State planners contend that in free market economy the entrepreneurs are free to fix their prices. They conveniently forget that free market economy operates under strict regulation.

There is no place for cartel, hoarders and profiteers in free market economy. When a state fails to check these unethical practices, the free market economy becomes a nightmare for the public. A government without any writ cannot operate the economy in any other mode than the opportunist mode.

Control over economic affairs is much easier in the presence of available technology. The government would simply have to muster the will to use it transparently.

A prudent economic manager has to go out of way to bring to book the violators of tax laws. The entire system is corrupt and efforts to control corruption in every sector would create chaos, as the checks and balances would be in the hands of corrupt and they would sabotage it.

Instead the government should take on board 20-40 individuals with an unblemished record and high qualifications to target one sector or segment at a time to monitor any irregularity digitally.

They should map all moves and transactions through technology. Those indulged in malpractice whether from private sector or bureaucracy should be brought to book through speedy trials and quick decisions. The higher courts should cooperate in eradicating corruption by disposing of all appeals within two weeks.

Presently, appeals against cement and sugar sector on alleged cartels are pending in various courts for more than a decade. Since there is no decision, the cartels are operating without fear and hiding behind stay orders.

The state itself does not pursue the courts for early disposal of appeals relating to financial frauds, tax evasion or excessive profiteering through cartels.