Saturday December 09, 2023

Hard times

August 08, 2022

Times are hard for the working class and the poor in Pakistan. The severe economic crisis has resulted in the rise of poverty, inflation and unemployment. Even the middle class is feeling the pain of the ongoing economic crisis.

The soaring prices of petrol, electricity, food and other essentials have outpaced the meagre increase in monthly incomes, which are unable to keep up with the rising inflation.

Finance Minister Miftah Ismail has made it clear that the main focus of the government at the moment is to avoid default and stablize the economy and that the government is not focused on reducing the prices of food, energy and other daily essentials.

The government is feeling good that imports have reduced sharply in July, narrowing the trade gap. The Pakistani rupee is also regaining strength against the US dollar. The prices of oil and other commodities are falling in the international market, and it seems that the IMF tranche is also on its way. Friendly Gulf countries are ready to help Pakistan. This is good news for the crisis-ridden economy. But the economic crisis is not over yet. A lot more needs to be done to overcome this deep economic crisis.

It is really appreciable that the government is focused on the revival of the national economy and on avoiding default. It has successfully halted the free fall of the Pakistani currency.

The people want the government to pay attention to the soaring prices. They also want to feel good about the recent achievements made by the country’s economic team, but their economic and social conditions are not allowing them to do so. Most of them have already fallen below the poverty line, and a few more are on the brink. Life has become unbearable for a majority of people who struggle daily to survive.

Their meagre incomes are not enough to feed their families, educate their children and live the dignified life promised in the constitution. Not only does the ruling class borrow to run the country, but ordinary people also borrow regularly to meet their monthly expenses and to survive. They have already made the hard choices of skipping meals, purchasing medicines and cutting down on other daily life essentials to reduce their expenses. They have hit the bottom.

The government has left the people of Pakistan at the mercy of the ‘free market’. Big market players are taking advantage of the situation and profiting off of ordinary consumers. The problem is that the free market is not as free as many of us believe – or neoliberal pro-market economists and experts want us to believe.

The big players manipulate the market. They create shortages through hoarding supplies and then exploit consumers. They do so to increase prices and earn more profits. The profit-driven market system also contributes towards soaring prices.

Take the example of the shortage of several life-saving drugs in the market. Nearly 60 essential medicines are unavailable because pharmaceutical companies have halted the production of these medicines. The reason is that these medicines are no longer profitable. The companies are forcing the government to increase the prices of these medicines to make them profitable.

Neoliberal experts tell us every day that we should let the private sector flourish to meet the needs of the people and that the state should not be involved in the running of the economy or industries and leave it to privately run monopolies. They also argue that the public sector is evil and needs to be abolished to pave way for the private sector.

Another argument is that the private sector should also provide education, health, employment and services. We are told to let them make profits and turn everything into commodities to trade and are repeatedly reminded that the market decides prices and the state should not try to regulate it – the demand and supply of products will determine their prices.

The point is that people still need the medicines, but private producers are manipulating the market to maintain their profits. They are proving the point that the private sector produces goods and services for profits. The main driving force behind private production is ‘profit’, not people’s needs.

The inflation rate in July was 24.9 per cent – the highest ever since November 2008. Inflation in Pakistan continues to rise amid falling commodity prices in the world market. The rising inflation is badly hurting the poor and the working class.

Electricity bills in July have given huge shocks to people. These bills have almost doubled in the last three months. My bill in May was Rs2, 598 for 211 units. I recently paid a bill of Rs6,040, which included the fuel price adjustment of Rs1,980, for 233 units.

Almost everyone in working-class and lower-middle-class neighbourhoods is complaining about a sharp increase in electricity bills. The expensive electricity is enough to give sleepless nights to people.

We understand that inflation will come down when international commodity prices fall and the rupee regains its lost value. Even though commodity prices are falling across the world, its impact has not passed onto the people so far.

The first thing that the government can do is introduce measures to stop market manipulation and unjustified profiteering. The people are living on the edge and are really angry at the government. They are angry because they feel abandoned in these hard times.

The writer is a freelance journalist.