WITH the month of Ramazan underway, people have begun to feel the effects of galloping inflation even more. Prices for essentials were already on the ascent before the month set in. However, with the beginning of the fasting month, partially due to rising demand and mostly due to the insatiable greed of traders, prices for food items are hitting the roof. It has been a rough year with Covid-19 — amongst other factors — shaking the national economy. In such bleak times, the working and indeed even the middle classes are being deprived of the simple pleasure of sharing iftar delights such as fruit and other delicacies with family due to high costs. As is mostly the case, official price lists do not reflect the realities of the market, with a wide margin between government prices and the cost of goods in the bazaar. Every year, in the run-up to Ramazan, officials make the same tired announcements and promise that profiteering will not be tolerated, but these efforts are merely for public consumption. The trader rules the market, and charges the consumer at will.
There have been some steps to check the price hike during Ramazan, such as offering staples at subsidised prices at Utility Stores. However, this solution is limited in scope as not everyone has access to Utility Stores, and crowding at such establishments during the pandemic — as a picture published in this paper has shown — throws up fresh challenges. There is a need to ensure that the price-checking mechanism at the local level is working properly, and that profiteers are fined for fleecing the public. Moreover, a more realistic pricing mechanism needs to be put in place as traders — not entirely without justification — say the government sets prices unilaterally, without their input. A middle ground needs to be found that allows consumers to buy basic kitchen essentials at affordable prices, and traders to make a profit within respectable margins without breaking the poor man’s back
Slow recovery
THE pace of growth in large-scale manufacturing output continues to slow down, with LSM production contracting by 4.15pc in February on a month-on-month basis. Overall, the new estimates from the Pakistan Bureau of Statistics show that big industry has expanded by 7.45pc year-on-year during the eight-month period from July to February on the recovering demand for cars, cement and other building material, tobacco, pharmaceutical products etc, as well as measures implemented by the SBP to support businesses affected by Covid-19 through generous liquidity injections. The rebound in big industry, which constitutes about 80pc of manufacturing and 10.7pc of GDP, is a big improvement over the more than 10pc contraction in the last fiscal and has led many to believe the economy has turned the corner. The SBP last month revised its GDP growth projection for the current year to 3pc against the IMF’s forecast of 1.5pc and the World Bank’s 1.3pc. Indeed, the economy has shown signs of early recovery since summer after shrinking by 0.4pc last year on account of harsh IMF-mandated policies and lockdowns. But the reversal in the LSM output growth trend, which appears to be taking hold and may last through the remaining four months of the fiscal year, should help the government and SBP readjust their expectations.
Besides slowing industrial production, there have been other negative developments underlining the fragility of the recent recovery. For example, the agricultural sector is likely to shrink owing to a big drop in the cotton output. Similarly, the third wave of infections is expected to impact manufacturing, wholesale and retail trade, and transport like last year. The recent restrictions on mobility have significantly affected the services sector. Financial constraints have already slowed down public development spending. Although the country’s external sector remains stable and foreign currency stocks are rising on new loans, the recent rise in the trade deficit is worrisome as imports increase and exports drop. So far, the increasing remittances have helped offset the impact of the widening trade deficit on the external sector, but for how long? Further widening of the trade gap and reduction in home remittances could put pressure on the external sector going forward. On the whole, economic indicators are much better today than a year ago. Yet, recovery remains feeble and in need of policy support. But the resumption of the IMF programme could curb the government’s efforts to help the economy unless there’s another plan.
Ban is no answer
THE government has officially banned the Tehreek-i-Labbaik Pakistan and issued a notification accordingly. This extreme step comes in response to nearly three days of rioting by the TLP after its leader Saad Rizvi was arrested. The government was unable to stop TLP workers from blocking roads and highways across the country and destroying public and private property.
The enraged workers also attacked policemen, leading to the loss of precious lives. The writ of the state was seriously damaged as TLP cadres ran amok without facing any effective resistance from the law enforcers. When the government finally took action, it chose to do so by banning the party. This has been the state’s modus operandi in the past too when extremist groups it nurtured went out of control.
The difference is that the ultra-right TLP, for all its vitriol and predilection for violence, is a political party registered with the ECP. It contested the 2018 elections across the country and has representation in the Sindh Assembly. Can it then be technically classified as a terrorist organisation — although its workers have routinely unleashed violence that simply should not to be tolerated at any cost? A far better option would have been for the government to use its administrative and legal powers to hold the rioters accountable and make them face the law.
ECP-registered parties hold demonstrations that often result in the disturbance of law and order. The PTI itself has been down this path. During the 2014 dharna, its workers, along with those of Tahirul Qadri, had attacked the PTV centre and manhandled law-enforcement personnel. But few would argue that the PTI should have been banned. The law should not spare a single violent worker of the TLP but banning it is no answer to the challenge it presents to the state. The government must do some introspection: why did it feel compelled to sign an agreement with the violent outfit a few months ago? This was a wrong step and it is important that it acknowledges its mistake and holds all those officials responsible who made that agreement possible and signed it.
It is an open secret that the TLP was nourished by the state for its vested interests. If today it has spiralled out of control, the blame lies with those who helped it grow into the threat it is today. But a blanket ban on the party is a futile attempt to solve a complex problem, and is an acknowledgement that the government does not want to take the difficult decisions needed to address the challenge thrown up by the TLP. The ban will not dilute the narrative that fuels the party, it may even fan it. The government would be advised to take a more nuanced approach and desist from actions that are unlikely to produce the intended results.
