Uncontrollable Price Hike

The uncontrollable price hike in the country clearly indicates the desperate malfunctioning, even breakdown of market forces in Pakistan.

The steep rise in cost of living in Pakistan is potently disproportionate simply because it has outstripped the ability to pay of majority of the citizenry. The inexplicable spiral was the offshoot of oft-repeated belief of former president General Musharraf that increase in prices is a regional phenomenon implying thereby that it was not unjustified.

His opinion became a recognised mantra with the establishment although price and salary indexation is a global practice underwriting incremental adjustment of rising cost of living but Pakistan is a singularly inadequate market to adjudge and adjust this crucial process.

It is not a matter of conjecture anymore that Pakistani polity is subjected to control of self-serving cartels in almost every field of existence. Consumer related cartels are no exception but the impact of their stranglehold is detrimental in extreme because they negatively affect widest spectrum of people than any other such cartel.

The areas of operations of such cartels are very well defined and many state organisations are mandated to ensure that a reasonable balance is kept between their functioning and interest of the people at large.

State Bank of Pakistan (SBP) has ultimately acknowledged the consistent clamour of the common man by stating that uncontrollable price-hike is making their lives miserable. Despite obvious acceptance of reality by SBP the government appears to be justifying the price increase and shifting the blame onto the International Monetary Fund (IMF). The figures supplied by SBP emphasise that inflation is all time high and needs to be monitored without further delay. It is very apparent that despite government claims of stability in prices there has occurred sharp rise in prices of almost all items of daily use including wheat flour, pulses, edible oil, ghee and milk besides vegetables and fruit.

Rice price has gone up considerably and same is the case with sugar price. The price figures are consistently going up despite the fact that prices of sugar, like wheat, in Pakistan are already much higher than international market and certainly the highest in the region. Emulating the general price increases, industrialists and manufacturers including pharmaceutical companies have also increased prices of their products citing rising prices of POL products whereas service providers too have increased their rates although they are not directly affected by POL price increases.

 

Keeping in view the enervating cost of living it has become imperative to profoundly investigate and rationally reappraise the price mechanism with a view to ascertain any leverage government agencies possess in decisively influencing pricing policy. It is equally important to ascertain the corresponding factors such as cost of inputs resulting in price increases.

The time frame of increasing prices may also be realistically determined. The regulatory procedures for allowing increase in prices may be thoroughly checked. It is equally necessary to explore if forces governing market mechanism are appropriately cognisant of the monetary and social costs of price hikes. Moreover, the possibilities of freezing price levels for a reasonable period of time may be worked out. Finally, the factors responsible in lack of decrease in prices after reduction in fuel prices that ideally should have a cyclical effect may also be investigated.

It is indeed unfortunate that the fruits of massive reduction in fuel prices over the last few years have not trickled down to the common man. The issue is brushed under the carpet by transferring responsibility of controlling prices to provincial governments. Bureaus of Prices and Weight & Measures exist in provinces and provincial bureaucracies are expected to keep tabs on price escalation but to no avail.

There are reportedly Price Committees working in major areas without producing any tangible results. A large majority of MPAs are assigned no official responsibility except attending legislative sessions and are unmindful of their responsibility to provide relief to their constituents hopelessly mired in price increases.

Owing to uncontrolled escalation in prices Pakistan is in grip of economic terrorism. The widely demonetised economy of Pakistan is a classic case of deliberate acceptance of self-serving practices of production and distribution mechanism. The business decision making creates money that it circulates in its own microcosm. They are totally oblivious of the perils faced by the people due to their self-serving motives.

The Prime Minister crisscrosses the entire country opening up development projects without realising that development potential of the nation is deeply hamstrung by their dwindling ability to pay for procuring necessities of life. It would indeed be befitting if he declares controlling the price spiral as his top priority. He may embark upon a nationwide tour with a view to ensure that provincial machineries hasten activity to reduce prices. Though it is not certain yet his personal intervention will surely generate media interest adding cutting edge to the issue.