The Pakistan Tehreek-i-Insaf (PTI) government has increased drug prices for the 11th time in its three-year tenure. Federal Minister for Interior Sheikh Rashid says he realised medicine prices had skyrocketed only after he fell ill recently. The rupee has plunged to all-time low against the US dollar which further pushed up consumer prices. Electricity prices have also doubled in a year, even for lifeline consumers. Flour and sugar are still not available at official rates, despite tall claims of the government.
Remember, it all came from a government, which had promised to bring about a revolution in the lives of the common people. Instead, it has overburdened them and they are suffering more badly. They have been forced to miss the past governments, which Prime Minister Imran Khan called corrupt and inapt. The problem is that the government is not interested in solving public problems ‑ rising prices and unemployment ‑ while it claims to have put the country on the path to prosperity.
According to the Pakistan Bureau of Statistics (PBS), an upward swing in consumer prices continued in November as inflation edged up to 11.5pc from 9.2pc, the highest increase noted in the past 20 months influenced by a record hike in fuel prices. The massive rupee depreciation fuelled import-led inflation. Inflation, measured by the Consumer Price Index (CPI), increased to its highest level in 20 months — the period when global oil prices kept rising steadily undermining earlier gains. At the same time, prices of fresh vegetables, fruits and meat have also registered a persistent increase in major urban and rural centres. The average inflation during the July-November period rose to 9.32pc on a yearly basis. As international fuel prices have started rising again, it will trigger another wave of price-hike in the country.
The ministry of finance, in its average Monthly Economic Indicator (MEI) report, also warned of impending risks including the concerns of the policymakers about the inflationary effects and the resulting policy response. It estimated the average monthly growth at around 5pc during the first five months of the current fiscal year, despite inflationary pressures and consequent tightening of policies. However, it said inflation may ease out in the coming months due to the declining commodity prices in the global market. In addition, relief may also come from continuous government efforts to soften food prices in the local markets by following appropriate fiscal and monetary policies. “While these developments and policies may keep the monthly price dynamics in check, the current stress on the trade balance is expected to soften, easing exchange rate pressure and subsequently stabilising month-on-month inflation,” it observed.
People complain that past governments at least made efforts to bring prices down, while the PTI government has surrendered before profiteers and hoarders. The government claims its policies are aimed at providing relief to the common man. In his recent address to highlight the achievements of his government, Prime Minister Imran Khan claimed that people were more prosperous today than the past. It amounts to rubbing salt into the wounds of the common people. As inflation continues to increase, the common people have reached the conclusion that the government has no qualms about overburdening them and leaving them at the mercy of profiteers and hoarders.
Flour prices have been continuously rising; it becomes costlier by at least Rs2/kg every fortnight. It did not happen during past governments. They at least took measures to stabilize prices, while the PTI government has left people at the mercy of profiteers and hoarders. They are free to charge people at their will. Earlier, the federal cabinet allowed a hike in prices of 37 medicines being produced domestically, while allowing slight changes in prices of 13 others. It was the 11th time the PTI government increased drug prices.
According to the Asian Development Bank, inflation is higher in Pakistan as compared to the other countries of South Asia. It raised its inflation forecast for South Asia in 2021 from 5.5pc to 5.8pc, mainly reflecting a higher forecast for India, but unchanged at 5.1pc in 2022. The international financial institution said inflation in Pakistan averaged 8.8pc in the first 11 months (July to May) of FY2021 on rising global commodity prices, especially for food and crude oil. In its latest report, the Asian Development Bank said the rural extreme poverty rate was five times higher than urban extreme poverty rate in Pakistan. In its latest report, “Key indicators for Asia and the Pacific 2021”, it said that comparing 2020 to 2019, food inflation increased in 29 of the 41 reporting economies, of which 17 posted food inflation of five percent or higher.
The largest increases in food price inflation were observed mostly in lower-middle income economies such as Pakistan (11.3 percentage points), Sri Lanka (10.6 percentage points), the Kyrgyz Republic (10.3 percentage points), and Bhutan (7.8 percentage points). The economies that reported the largest declines in the CPI growth rates from 2019 to 2020 were Myanmar (-5.1 percentage points); Fiji (-4.4 percentage points); Turkmenistan (-3.3 percentage points); Mongolia (-2.9 percentage points); Hong Kong, China (-2.6 percentage points); and Samoa (-2.6 percentage points). The highest increases were noted in the Kyrgyz Republic (5.2 percentage points); Kiribati (4.3 percentage points); Pakistan (3.4 percentage points); Afghanistan (3.3 percentage points); and Bhutan (2.9 percentage points).
More alarmingly, the report noted that the pandemic had pushed an estimated 75 million to 80 million more people in developing Asia into extreme poverty as of last year, compared with what would have happened without the pandemic. Assuming that the pandemic has increased inequality, the relative rise in extreme poverty, defined as living on less than $1.90 a day, may be even greater. Progress has also stalled in areas such as hunger, health, and education, where earlier achievements across the region had been significant, albeit uneven. According to the report, about 203 million people or 5.2pc of developing Asia’s population lived in extreme poverty as of 2017. Without the pandemic, that number would have declined to an estimated 2.6 percent in 2020.
According to the World Bank, Pakistan has seen a higher rate of food inflation in the region which is partly linked to global trends due to the pandemic and partly to domestic policies. “Around 68pc of Pakistan’s population is unable to afford a healthy diet leading to malnutrition and food inflation worsens the situation. During May 2020 and May 2021, prices of food increased by 14.8pc in Pakistan,” the World Bank country director for Pakistan told a webinar.
It is a fact that the PTI government failed to ensure smooth supplies of essentials and price stabilisation in the first three years of its term. Flour and sugar shortages persist and their prices continue to rise. The situation is feared to remain the same or worsen in the remaining tenure of the government. Despite massive imports of wheat and new crops, consumers are facing severe price shocks in flour rates all over the country.
In the absence of an effective price checking mechanism at provincial and city government levels, prices of daily-use items fluctuate on a daily basis. The prices remained on the higher side mainly because of currency devaluation. Though the government claims it has come out of the economic crisis, yet all indicators paint a bleak picture for the common people. The prices of essentials will continue to rise as the government blatantly passes on the costs of its own inefficiency to consumers.