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| India-Pakistan |
| Let Them Eat Grass |
| 2008-02-18 |
| Gallows humour about the country's economic crisis pervades the political ambience days before Pakistan goes to the hustings. Symbolising the grim mood is a popular Urdu sms which reads in English, "No flour, no electricity, no water, no sugar, no cooking oil, no petrol, and if you too don't want to be around, then stamp Musharraf's cycle (PML-Q) on the ballot." Indeed, President Pervez Musharraf finds to his horror the story of Pakistan's economic miracle, scripted in breathless prose and spectacular figures, has reached an unexpected denouement—inflation has touched 11.86 per cent, food prices are soaring, and acute shortages of wheat, cooking oil, gas and electricity have the nation groaning in misery. And to think, barely two years ago, policy wonks cited the booming Karachi stock exchange and a near double-digit growth rate to justify Musharraf's rule. Taxing: Long line-up at a Karachi flour mill Today, the galloping inflation has eroded the purchasing power of the country's 160 million people, three-quarters of whom live on $2 or less a day (one dollar is equivalent to 60 Pakistani rupees). Food prices have risen by 10 per cent in each of the last three years; the price of wheat, Pakistan's staple, has witnessed a 14 per cent hike since last November. Worse, Pakistan's central bank—the State Bank—has lowered its estimate of growth rate for this fiscal year from 7.6 per cent to just above 6 per cent. Pakistan Muslim League (Nawaz) leader and former commerce minister Ishaq Dar says the irony of the looming crisis is that Musharraf had promised to rescue the economy to justify his coup against then prime minister Nawaz Sharif. "What statistics his officials reel on the TV may or may not be true," he shrugs, "but what the public suffers is high inflation, increasing poverty, stock exchange-related scams and controversial privatisation deals." Adds Pakistan People's Party leader Ahmed Mukhtar, also an ex-commerce minister: "Why should Pakistanis care about the Taliban and America if they have to fight for a day's aata?" This is why, Mukhtar says, "wherever you go, you hear people shout, 'Go Musharraf Go'." What has principally fuelled the public outcry is the rising price of flour, a kg of which at subsidised rates costs between Rs 14-18. Early January, the price in the open market doubled, touching Rs 60 in some areas. Similarly, the price of a 20-kg flour bag has gone up from around Rs 250 to Rs 450. Former federal secretary for food and agriculture Zafar Altaf blames it on the government's decision to export half a million tonnes of wheat last year, amid Punjab CM Pervaiz Elahi's boasts of a "bumper harvest". The export led to shortages, and import of wheat at a 70 per cent higher price had a cascading effect. "Either the claims of a bumper crop were false and designed to justify wheat exports or, if the claims were correct, the wheat stock has been hoarded somewhere and the current crisis is artificial," says Dr Altaf. The faulty export policy gave a fillip to hoarding. PML(N) leader Ahsan Iqbal claims several leaders of the ruling PML(Q) stocked two million tonnes of wheat, pushing the prices higher and earning billions. Besides imports jacking up the prices, owners of rice mills exploited the wheat shortage to sell rice at inordinately high prices—Rs 30 per kg for inferior quality and Rs 70-75 for the best quality. The rice millers then ploughed their profits to buy and hoard wheat—much to the agony of people. Apart from hoarding, wheat has also been reportedly smuggled into India and Afghanistan. Former federal minister Mohammad Ali Durrani says the government has recently deployed 6,000 rangers and paramilitary troops around flour mills, distribution points and checkposts to prevent smuggling. But, as ppp leader Sherry Rehman says, the government has already pushed the country back by decades, as the long-forgotten images of people queuing up for flour return. "Under no democratic government did Pakistanis see food prices soar, so much so that people standing in long lines outside government food distribution centers had to be turned away empty-handed," she says. The bitterness of daily existence can't even be mitigated by a sweetener—the rising price of sugar has made it scarce. The government's recent decision to increase the ex-mill sugar price from Rs 23 per kg to Rs 30 should cause a spike of Rs 6.50 in the open market. Oblivious to the consequences on the common man, Zaka Ashraf, chairman, Punjab Sugar Mills Association, justified the government's decision: "The government had the option of either reducing the support price of sugarcane to appease the mill owners or increase the price of ex-mill sugar." The government chose the second option which, Asghar Butt, a sugar dealer, says "wasn't justified and will be another bombshell for consumers". What's more, the Federal Food Committee (FFC) has predicted an acute shortage of edible oil. Domestic production meets only 17 per cent of the demand. The decline in the world crop of palm oil and soybean is the chief reason behind the crisis, FFC officials say. "Edible oil has become costlier by Rs 40 per kg over the last month," said Fareed Qureshi of the Karachi Retail Grocers Group. The darkness enveloping Pakistani society is symbolically manifested in severe power shortages. Most urban centres witness outages of 10-12 hours a day, and rural areas anywhere between 12-18 hours. The Musharraf government's failure to foresee future demands will, according to official estimates, cause a shortfall of approximately 6,000 megawatts by 2010. Also, no commercial gas was made available to industries for the last two weeks, forcing closure of hundreds of factories. The agony of people has failed to convince people like ex-minister Tariq Azeem about the Musharraf regime's myopic economic policy. Azeem insists, "Even the government's worst critics acknowledge there was a turnaround. People who were using bicycles have switched to motorcycles, and motorcyclists to cars." But Sakib Sherani, chief economist, ABN Amro Bank, Islamabad, says the headline-grabbing growth figures have bypassed the average Pakistani. Quite like the nda's India Shining slogan of 2004. Then the poor took their revenge on Vajpayee and Co. It should be the same in Pakistan on February 18. |
| Posted by:John Frum |
| #2 The grass in the title refers to Zulfikar Ali Bhutto's (Benazir's father) famous comment in 1965 (after Pakistan's defeat by India in the war earlier that year) that "We will eat grass" in order to get the atomic bomb. |
| Posted by: John Frum 2008-02-18 13:33 |
| #1 Flour shortage? Hmmm. Bulk carriers are lined up in the river here, waiting to load. Guess they're not going to Pakistan. I bet you could swap some nukes for them though - care to try? |
| Posted by: Glenmore 2008-02-18 12:42 |