Economy and the common man

August 21, 2022

The man in the street does not believe that the economic policies aim at his welfare

Economy and the common man

Ž“How does an economy work?” is a question that does not concern the common man in Pakistan. He is more interested in knowing why petrol prices in the country are not coming down in line with global prices? Why, he wants to know, have the governments failed to provide relief to the people they keep promising?

The gulf between how the economic managers of the country see the economy and how the common man understands it in his everyday life remains wide. Most experts agree though that only a people-centric approach to making economic policies may bear fruit. As things stand, back-breaking inflation is the face of Pakistan’s economy for the man in the street. Debt-servicing, defence-spending and revenue shortfall are to him mere excuses for the government’s failure to make his life better.

Affordability has replaced the primacy of taste. “For the last few years I have noticed that, unconsciously, I go for the cheapest vegetable or pulses on the shelf as I buy groceries,” says, a fifty-something gentleman who doesn’t want to be named. “Inflation has made me taste everything,” he says laughingly as he picks up a pack of pulses from a shelf in a grocery store in Lahore.

“Economic policy makers have their own compulsions but I think there’s a disconnect between the policy makers and the public,” chips in Waqar Ahmed, a banker by profession. “We haven’t even gotten the basics of our economy right,” he adds.

Over the last few years, many people’s efforts have been focused on trying to bridge the gap between what they earn and what they need to spend. This is particularly true for the salaried middle class.

Owing to inflation, visible in the increasing food prices, many who once used to get the grocery items they needed for say, Rs 8,000, have now to spend almost double the amount for the same articles. Many people have either cut down on the number of articles or have opted for cheaper and substandard varieties.

Statistics paint an ugly picture. The year-on-year consumer price inflation rose to 24.9 percent in July, according to the Pakistan Bureau of Statistics, up from 21.3 percent in June. It is the highest in 14 years. Non-food expenditure, mainly fuel and electricity, were the main reason for the rise while surging prices of vegetables, pulses, cooking oil, wheat flour and milk also contributed.

Add to these the changing climate patterns. The long rain spell caused widespread devastation across the country. Torrential rains destroyed many ready-to-reap crops, resulting in soaring prices of essential commodities. Heavy downpours inundated millions of acres of agricultural lands in all four provinces and in the Gilgit-Baltistan region.

Over the last few years, many people’s efforts have been focused on trying to bridge the gap between what they earn and what they need to spend. This is particularly true for the salaried middle class.

Balochistan has been perhaps the hardest hit. Rains have killed many people and destroyed farmlands and orchards in many districts.

According to a recent report released by KTrade Securities Limited titled, Climate matters — Preparing for an Upcoming Crisis, investment and economic planning processes need to take into account climate-induced changes. “Climate change has started to impact not just our economy but also the way we live,” it noted. That Pakistan has been declared a water-scarce country, also means that agricultural patterns will change over the next few years and the supply of water-intensive crops will become limited.

The common man can clearly see the impacts of the changing climate as his crops are destroyed in the villages and businesses ruined in urban areas, due to urban flooding, etc. Are our economic managers looking in that direction? How are governments dealing with the issues of inflation, unemployment, debt and climate change elsewhere in the world for the welfare of the masses?

What has been the government’s contribution to the welfare of the common man since Pakistan appeared on the map of this world? A report released by the Ministry of Finance, on August 14, titled, 75 Years Economic Journey of Pakistan, Towards a Vibrant Pakistan, attempts to answer that.

The figures presented in the report are interesting but are they any indication that we are going in the right direction? The report says that at the time of independence Pakistan had only 34 industrial units out of the 921 in the undivided India. The GDP growth this year has been 5.97percent compared to 1.8 percent in 1950. Per capita income has jumped from $86 in 1950 to $1,798 in 2022. The tax revenues have risen from Rs 0.31 billion to Rs 6, 126.1 billion from 1950-2022. In the agriculture sector, the production of wheat has increased from 3.35 million tonnes in 1958 to 29.4 million tonnes in 2022, rice from 0.69 million tonnes to 9.32 million tonnes, maize from 0.36 million tonnes to 10.64 million tonnes, sugarcane from 5.53 million tonnes to 88.65 million tonnes, cotton from 1.16 million bales to 8.33 million bales and water availability from 63.9 million acre-feet to 131 MAF.

The remittances sent by Pakistanis working abroad have jumped from $0.14bn in FY73 to $31.2bn in FY22, exports from $162m in FY50 to $31.8bn in FY22, and imports from $276m in FY50 to $80.2bn in FY22.

The fact that 75 years after independence Pakistan’s economy has grown over 125-fold and average incomes increased almost 21-fold does not seem to be awe-inspiring. 75 years down the lane, a lot still needs to be done. Unemployment, inflation, food insecurity hit the people hard. Many people have this impression that they are not the priority for the governments that they elect.

So, what needs to be done? To some people, that brings us to the much-needed charter of economy. A natural successor to the Charter of Democracy signed by PML-N’s leader Nawaz Sharif and PPP’s late chairperson Benazir Bhutto in London in 2006, the new charter would promise hope to the common man for the uplifting of the economy.

The much talked about charter of economy is said to draw the red lines that the signing parties will agree not to cross in their scramble for power and thereby create an investment-friendly climate. Meanwhile, the common man continues to try to figure out the policies, ostensibly made for his well-being, and wonders if the politicians will agree on an economic reforms agenda.

The writer is a staff member. He can be reached at

Economy and the common man