Daily The Business

The Cost of Democracy!

By Javed Iqbal

The population-wise largest province Punjab is facing a daunting challenge of price hike and hoarding of essential items in the wake of the sagging economy which has diminished job prospects. The pressure created by media and the opposition has forced the government to take some cosmetic measures but its response to market forces shows the incumbent PTI-led government does not know the price control mechanics and is equally unable to use the large bureaucratic paraphernalia in public interest.

The traditional bureaucratic impassiveness towards public welfare in new Pakistan shows it is ill-prepared; uses fabricated data and adopts an ineffective and inefficient approach towards issues being faced by the hoi polloi. The measures taken by the price control magistrates in Punjab are, hitherto, totally ineffective, rather counterproductive, and only cosmetic to say the least. Inflation, black marketing, hoarding, and demand and supply gap are major causes of hike in prices. It is, therefore, important to understand and adopt the approach which government departments should opt at supply, demand and regulatory levels.

First of all, the government  should develop and make a list of all those essential food items which we want to maintain without any inflation for a longer period of time like five or maybe ten years. Then, it should work out its real demand for each day of 365 days for each city, each fruit and vegetables market based upon proper and accurate data collection and not relying upon statistical department’s fudge data or market committees’ data. Such figures are mostly false to hoodwink the political government and the masses. Then, it should be seen which item is locally produced and what is the current production and supply rate for each day of the whole year. If chances of supply and production against each day are likely to remain lesser, then how will that gap of each day be bridged by the government? How cultivation and production of crops and vegetables will be increased to keep constant their prices and consistent supply will be ensured without price variations? How imports will be planned? How the shelf life of perishable items would be increased. How technology-related interventions should be brought in? How marketing related interventions are needed to be chipped in? Why are the agriculture marketing department and agricultural market committees so inefficient and ineffective? Why are not they playing due role proactively and in a planned manner? What should be the import substitution and local production strategy to meet the supply and demand of those items which are currently imported?

During colonial rule and much later in Pakistan, the traditional girdawari system was in place in addition to magistrates empowered to punish the local mafias. It was a wonderful mechanism used to update the administration about the status of cultivated crops and vegetables. The government had ample time to handle the shortage issue. Today, it is missing and the result is that power corridors are clueless about the possible solutions. None among the opponents of magisterial and girdawari system, then, thought about fillling imminent gap at the grassroots?
It is recommended to use, at least, land survey technology to have updated information about cultivated crops and vegetables. The Rs16 billion funded Punjab Land Record Authority (PLRA) and the Punjab Information Technology Board should practically deliver in this regard. The PLRA officials, following the famous tradition of blocking roads and bullying public for their demands, are administering a sit-in in front of CM office. Who can remind them of their duties in wake of public woes?

The bureaucracy has mostly blamed the ‘middle man’ who, it thought, was a major beneficiary of the market system. The official ranks, however, didn’t provide any feasible solution to curtail the undue role of this tier.
This columnist, being a farmer’s son, knows that the middle man ‘buys’ the farmer by providing money whenever he needed and in return makes him bound to sell his crops to him. On the other hand, the government provides loans involving a complex system of multiple checks. It gets back with interest and police arrests are made in case a poor farmer failed to return loan on time. The only solution to the middle man is issuing of interest-free loans to farmers, whenever, they needed against their lands pledged by the revenue department.
In the economic cycle of inflation, 90% common population bears the burnt and rest of the 10% mints money. So, we have to work out comprehensive plans while dealing with the prices of essential food items.

Some items like tea and cigarettes are mostly imported to satiate public habits. The government, as well as the media, are needed to watch the cartels of importers in the food industry which are mainly involved in the import of edible oil, pulses, palm oil and other things to understand the import trends and their direct impact on prices of food items. The government may also reintroduce the rationing system of Bhutto era to decrease economic pressure.

The PTI government should study how the prices of wholesale markets are regulated without hurting free-market mechanisms. In Pakistan, no mechanism exists to regulate and ensure production and the supply of essential items. We only do knee-jerks and cosmetic firefighting like price magistrates’ posting for a period of three months which is a useless exercise to control price hike. It is a mockery of governance and service-oriented approach.

The people belonging to the middle class and the salaried section are hit hard by spiralling of prices and their purchasing power is curtailed. All the more, the soaring prices have become a big threat and an open challenge to the political regime. It has shaken the faith of the people in the PTI government.
The government may restart production of ghee, sugar, cement and other such items to stabilize prices as China and some other countries were doing. As some say, an alternate system is an alternative to robber-barons’ unending lust for profits.
Noted lawyer Azhar Siddique commented that a petition was pending before the LHC since 2010 on this subject. He said that all the farmers, middlemen and retailers should be registered by the government. An independent authority with its powerful magistrates should be established. But for this purpose, the legislation would be required, Siddique suggested.

Former Punjab University VC Dr Zafar Moeen Nasir said that big farmers equally manipulated the pricing system. The government teams, having data of the notables of the area, should ensure proper monitoring from field to market. The magistrates should be given summary trial powers to punish the violators on the spot.
A senior officer, on the condition of anonymity, said that successive governments had been getting huge foreign loans, importing luxurious items, pledging national assets and decreasing exports. Under such circumstances, it would be futile to expect wonders from the ill-powered and part-timer magistrates. Many a time, such officers were beaten up by traders and hoarders and police was the least cooperative, he complained. Big farmers are sitting in power corridors, who duly manipulate the system for profits, he asserted. He also requested that the public should exercise boycotting those items that, they thought, were artificially hijacked like tomatoes.

The government should fully understand that prices are ever on the rise but undue soaring and hoarding of food items is more dangerous than opposition’s manoeuvring. It should also notice that without addressing demand and supply issue, the administrative interference would be fatal.
The menace of soaring prices has caused unrest and frustration in neighbouring Iran where riots have erupted after an increase in oil price. Dozens of casualties have been reported so far to counter the protesters. Price hike can also cause political upheavals in Pakistan too if it’s not properly handled because the price line is the lifeline of people.

Leave A Reply

Your email address will not be published.