Rising flour price
It has become a familiar problem that no one seems to be able to resolve. Yet again, the country is faced with the possibility of flour shortages over the next six months. And this despite the fact that Pakistan had begun the year with a wheat stock of 27.9 million tonnes which is more than enough to meet the national annual requirement of 25.8 million tonnes. Instead, the country now finds itself importing wheat at a substantial cost. As an immediate measure, therefore, it is essential that the government temporarily eliminate the 60 per cent duty on import of wheat in a bid to bring down flour prices.
But for a long-term solution to the problem of high flour prices, there is a dire need for the government to take certain concrete measures. Firstly, the authorities must move to stop the obvious theft and smuggling of wheat. In Sindh, for example, of the province’s initial wheat inventory of 800,000 tonnes, there are reports that up to 200,000 tonnes are missing. It would simply be impossible to keep prices under control if the government shows negligence in such matters.
Secondly, we must remember that commodity price hikes are being caused largely by unscrupulous middlemen who, in a largely undocumented economy, purchase wheat from farmers at extremely low prices and sell it at the market at exorbitant rates. The Federal Board of Revenue (FBR) must, therefore, continue — in fact speed up — its efforts towards a documented economy to ensure fair competition and proper taxation.
Thirdly, it is crucial for the authorities to concentrate on improving the country’s per hectare wheat yield which currently lags behind both global and regional competitors due to a host of issues, including water shortage, the absence of high-yield seed varieties, lack of research and development, and the use of outdated technology by farmers. All of these issues must be addressed on an emergency basis to increase the supply of wheat.
Unless these measures are implemented, we risk the prospect of a never-ending cycle of increased flour prices year after year.
Protesters and security forces have been clashing in dozens of Iranian cities after the government increased the price of petroleum products by about 50%. What started as an outcry against the price hike and rationing in one of the world’s biggest oil exporting countries has quickly turned political, with demonstrators chanting anti-government slogans around the country. Iranian media has been referring to the protesters as rioters while noting that police have had to use teargas to disperse crowds.
State television said police clashed with what it called rioters in some cities and fired teargas to disperse them. At least one person has been killed and several others injured so far. The death occurred in Sirjan, where protesters allegedly attacked a fuel storage warehouse and tried to set it on fire. Limited and slower internet speeds have also been reported in the country, with many speculating this is part of a government effort to limit communication between protesters.
The Iranian government, meanwhile, is claiming that the protesters, or at least the violent ones, “certainly have roots outside the country”. But while the protests do have some roots outside the country — the economy has been struggling since the US violated the 2015 nuclear deal and unilaterally re-imposed sanctions — there are several internal factors which the regime must address to stabilise the economy. As is the case with citizens of many other oil-exporting states, Iranians see cheap petrol as their right and were not sold on the government’s rationale that the price increase would raise around $2.5 billion, which would be used to increase subsidies for 60 million lower-income Iranians.
The protesters also feel squeezed because of rising inflation, growing unemployment, a slump in the rial, and state corruption, most of which have been endemic and less attributable to the US. There is also a lesson for Pakistan. Taxing the middle class to subsidise welfare is a stopgap measure, not a solution. Without economic expansion, this strategy is bound to fail.
Curbing drug smuggling
A friend indeed, they say, won’t make you smoke or chew that weed. So in line with this saying the Sindh government has launched a crackdown on makers and sellers of gutka, mainpuri and suchlike things in the province. Now the federal and Sindh governments have decided to launch intelligence-based operations against drug smuggling and peddling. Recently at a high-level meeting in Karachi, attended among others by the federal minister of narcotics, the federal and provincial governments have agreed to share data on drug smugglers and increase vigilance at the borders to curb drug smuggling.