Prime Minister Imran Khan has launched a mobile food bank programme to feed the poor. Initially, it has been launched in the federal capital and will soon expand to other cities of the country. It is a good initiative but will only serve a limited number of people. Most people, though struggling to support their families, will not take charity food; they need jobs and immediate respite from skyrocketing prices to run the affairs of their households honourably.
The new programme will not benefit more than 18.5 million people, who are estimated to have lost jobs in Pakistan in the aftermath of the pandemic. The loss of a large number of livelihoods points out flaws in the system and deep-rooted structural problems. According to a think tank, job losses from the pandemic could be more than the government’s estimates and people of the Punjab and Khyber Pakhtunkhwa could be most affected by rising unemployment. According to the Pakistan Institute of Development Economics (PIDE), the pandemic has shown that we couldn’t impose lockdown like the rest of the world because we lacked the systems to do so. The pandemic is not the ultimate problem of Pakistan, it is just the tip of the iceberg compared to the deep-rooted structural problems that we are just not ready to face. As per the projections, poverty has gone up by 20-30pc.
The government started celebrations after it claims it has improved the economy and brought down prices. The economy may be improving, though its benefits have not started reaching the common people. However, the government’s claim of controlling prices is totally false. Recently, Minister Imran Khan claimed that his government’s concerted efforts for bringing prices down had started bearing fruit and inflation slowed down in January to below the July 2018 level. However, the ground reality is different from the claims and essentials are still out of the reach of the common people. Prices of some vegetables and fruits have come down in recent months after fresh supplies arrived in the market but cooking oil, sugar and flour prices are still high. Prices are also set to rise steeply after the government has announced a Rs1.95 per unit increase in electricity rates.
Contrary to the government’s claim, the inflation rate spiralled to 8.7pc in February – one of the steepest increases in a month – after a surge in prices of food and energy. The 8.7pc inflation was the highest in the past four months, which also reversed the downward trend in the inflation index, according to the Pakistan Bureau of Statistics (PBS). The latest statistics reveal that today electricity is 43pc costlier than a year ago and almost all essentials recorded a double-digit hike in prices, including wheat, sugar, milk and wheat flour. There was an increase of three percentage points in the pace of inflation last month, which was one of the fastest increases in the index. In January 2021, the inflation reading had slipped to 5.7pc.
However, the February inflation reading belies the government claim that inflation was at the lowest level in its term in January. The 8.7pc inflation rate was significantly higher than the forecast of the Ministry of Finance that expected it to remain in a range of 5.5pc to 7.5pc in February. In its monthly Economic Outlook report, the Ministry of Finance had also said that the future inflation rate might follow a lower path. The latest data reveals that there was a significant increase in inflation in both urban and rural areas. The inflation rate in urban areas jumped to 8.6pc in February, an increase of 3.6pc in just one month. Similarly, in rural areas, the inflation rate increased to 8.8pc. Food prices also increased in both urban and rural areas. In cities, food inflation increased to double digits at 10.3pc. In rural areas, food inflation was calculated at 9.1pc. Core inflation – calculated by excluding food and energy items – jumped to an eight-month high at 6.4pc in urban areas in February. The major items that saw price hikes were eggs 48pc, chicken 36pc, condiments and spices 31pc, wheat 24pc, mustard oil 23pc, beans, sugar and vegetable ghee 17pc, cooking oil 15.4pc, milk 15pc and wheat flour bag 13.5pc.
The fresh wave of price hike belies the government’s claim to bring down inflation. Millions of people have lost jobs in Pakistan. Prices have risen to a level where even middle-income families are struggling to survive. The opposition has upped the ante. It has won almost all by-elections against the government. People are extremely annoyed at government policies. If elections are held today, the ruling party will not be able to win more than a few dozens of seats.
On the other hand, the government is trying to hide behind the pandemic. It claims the economy was poised to take off after three years of slowdown but the pandemic has hit people and businesses hard since mid-March 2020. However, fiscal indicators were bad even before the onset of the pandemic. The economy had slowed down, millions of people lost jobs and thousands of businesses shut down as a result of economic policies of the government. It blames the pandemic for all its failures while there was no pandemic in the country in the first nine months of the last fiscal year.
The government may not provide jobs to people in the near future. However, it can take measures to save them from high prices. It should act now.