A different approach

This refers to the letter ‘Financial challenges’ (April 2) by Muhammad Fayyaz Nawrha. The writer is concerned about rising inflation. Unfortunately, there is no magic wand that can help the newly appointed finance minister reduce the prices of essential commodities. Government subsidies are not a financially viable approach to reduce the prices. The authorities need to focus on the supply side if they are serious about controlling inflation. The agriculture sector, which has been neglected by the previous governments, and industries are the two strong pillars that can help tackle inflation. In the past, the country saw rapid deindustrialisation and the consequent rise in reliance on imports.

Imports drain our foreign exchange reserves and weaken the Pakistani rupee, leading to borrowings. Also, transport and logistics services in international trade are the reason why imported items end up being more expensive. It can be safely assume that inflation in Pakistan is externally induced. The country should focus on crop production and other products to reduce its high dependence on imports. These measures will also generate employment opportunities and are likely to result in an increase in people’s disposable income. It is unfortunate that there is no concept of self-reliance in our country.

Shoaib A Majeed

Karachi