Why Don't they eat Cake ?

There are long queues of people visible from a distance. This is neither a CNG station nor a banking counter for the payment of utility bills but a utility store where people are scuffling to get a bag of wheat. Some of them are women who are waiting for days for their turn to purchase a bag of flour in this scorching heat. Their men are out in search of the labour for they cannot afford the luxury of lining up for hours to buy basic food items that would easily wipe out their precious earnings of the last week or so.

Pakistan is predominantly an agricultural economy. According to the statistics around 70% of the population belongs to the rural areas. Majority of the natives are associated with agriculture sector in one way or the other. Yet we cannot produce enough wheat to feed all of us! Wheat is our principal produce that is cultivated from the heights of Deosai in Skardu to the plains of Sindh.

The problem is multiple folds. For one, we are unable to ensure provision of the basic product like flour and for another, whenever and wherever available, the prices are not affordable for those living below the poverty line. Nevertheless, the people have discovered the easy way out. A few of them are killing themselves and their families and children. While the less vigorous ones are either killing or robbing others. Those who are striving for their survival cannot feed or treat their ailing dear ones. This invariably steers up the crime and suicide rate.

According to UN (WFP) estimates, with an increase of 28% in one year, now 77 million (out of 160 million) people of Pakistan are food insecure. Data released by Federal Bureau of Statistics reveals that we had the privilege of encountering the all time high inflation rate of 21.53% during June 08 while the annual (CPI) inflation rate stood at 12% during the recently concluded fiscal year. Similarly the ( SPI ) inflation recorded the highest ever level of 28.99% on the week ending July 10th.Worst hit were the households comprising the base of the pyramid with the average monthly household incomes bracketed between Rs. 5,001 and Rs. 12,000 who were subjected to estimated inflation level of 29.17% during the week.

Gas prices were raised and the argument was that increase in CNG price would only affect the middle tier consumer, as the lower segment comprised either motorcyclists (non CNG user) or public transport users operating on diesel. When the electricity prices were increased the naïve minister had to claim that it would not affect 91% of our households. In his limited understanding and innocence, he either estimated that majority of the households would abandon their domestic electricity connections after the last price hike or he was too optimistic and assessed that the industrial sector in an act of enviable and unprecedented generosity would refrain from passing on the impact to the consumer.

Unfortunately both the assumptions proved wrong and the fact is that the communication and transport sector prices have risen by 24.91% in last one year whereas those of food and beverages by 32.05% while the trend continues with ruthless tenacity.

Similarly one of the well-informed ministers has claimed that there is no crisis and we have sufficient wheat available while more would be imported in due course of time. His in-depth analysis also reveals that since 70% of our population grows its own food, it would not, in anyway, be affected by the price hike.

Is the government serious about its claim of abolishing the entire subsidy provided on electricity, gas and liquid fuels in the shot term? Not to take into account the continuing upsurge in the price of crude oil, with the current subsidy levels of more than Rs. 29 per litre on diesel and close to Rs. 3.25 on gasoline where would the prices end up without subsidization?

The increased input (material, labour and energy) costs have already rendered our industries non-competitive in the international export arena. Shortage of electricity has added fuel to fire by making the production units inefficient and forcing them to operate below optimum levels. In the wake of global recession triggered by food shortage and increase in oil prices, our economy has slowed down considerably. As a direct result, we are witnessing an ever-increasing trade deficit (to a tune of $ 20 billion if I am not wrong?)

Our currency continues to dwindle even in comparison to the slumping US dollar. It continuously loses its value against all the ‘real’ assets and commodities. 10 gm of gold is now worth more than Rs. 20,000 and the trend continues unabated. SBP is desperately trying to rectify the situation. FDI and market capitalization of Stock exchanges have nose dived.

Like always, there are claims of broadening the tax net. However, it remains to be seen if the details are going to be any different from the previous ones whereby most of the taxes were drawn from the salaried class. In light of the returns that have been filed over the years, most of our democratically elected honourable parliamentarians were living below the poverty line and even deserved to be paid from the Zakat fund.

While there are stiff challenges to be faced there are certain ways out if we get our act together. The recent events on the global scene have only reiterated the importance of the natural resources that a country owns or utilizes. It won’t be surprising if it all boils down to the possession of natural resources to constitute the competitive advantage in the 21st century. China and India to a certain degree efficiently utilizing their huge human resource are the living examples. Water, food, grain, oil, gas and minerals are becoming increasingly significant in the shifting paradigms.

Luckily for us, we still have a lot at our disposal. Large domains of farmlands are available for cultivation if we can increase our per unit yield by utilizing the biggest canal irrigation network of the world. Rainfall in the catchment areas goes to our benefit.

Livestock and poultry are sufficiently available. Hundreds of miles of coast line runs along our territory that is a source of a cold war between USA and China. Pakistan is a land of most of the highest peaks of the world accompanied by some of the longest glaciers of the globe; A unique terrain with awesome potential for tourism and exploration. Law and order presents the biggest threat and the number and earnings from the foreign tourists are trivial as compared to the neighbouring countries.

Although the gas reserves are depleting, we are still benefiting from the indigenous natural resources. Pakistan is strategically located so as to benefit from the proposed gas pipeline projects linking Iran or central Asia to China or India. Coal is inferior in quality but coal reserves are amply available. Natural falls and potential to construct dams and reservoirs in the mountainous and sub mountainous regions present excellent opportunity to generate highly economical hydroelectric power. Huge amounts of solar energy that we are exposed to and the wind energy in the coastal belt together provide prized sources of environment friendly alternate energy.

Baluchistan is a mineral rich area and the bulk of monumental rocky mountains in Kohistan are untapped.We are exposed to all the four seasons with a variety of temperatures ranging from almost the lowest on the planet to the other extreme of close to the highest round the globe.In addition, Pakistan is one of the most populous countries of the world. With extensive spread of cottage industries network, skill development, training and education, the human resource can be put to productive use. It is just about getting the basics right and moving in the right direction with all the firmness and positive drive.

In the end, what we most probably lack is the initiative, mindset and a resolve to counter all our problems that is going to persist as long as we have to stick with our impoverished leadership.