The federal cabinet has approved an increase in prices of 37 medicines. It is the 11th time the Pakistan Tehreek-i-Insaf (PTI) government has increased drug prices in its three-year tenure. Flour millers in Punjab have hiked the price of a 20kg flour bag by Rs15 and that of a 10kg bag by Rs10. Weekly inflation accelerated by 0.22pc on August 26 as food prices rose at a higher pace, while on a month-on-month basis, the consumer price index increased by 1.3pc in July 2021, compared to a decrease of 0.4pc in the previous month and an increase of 2.5pc in July 2020.
It all happened in a government that claims its policies are aimed at providing relief to the common man. In his recent address to highlight the achievements of his government’s three years, 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 government has only piled misery on the common people and they have reached the conclusion that the government has no qualms about overburdening them and leaving them at the mercy of profiteers and hoarders.
On August 28, flour millers in Punjab unilaterally increased the price of a 20kg flour bag by Rs15 and that of a 10kg flour bag by Rs10. With the latest hike, the price of a 20kg bag has gone up from Rs1,110 to Rs1,125 and the price of a 10kg bag has surged from Rs560 to Rs570 at the retail level. 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 is the 11th time the PTI government has increased drug prices. Weekly inflation also accelerated by 0.22pc in the week which ended on August 26, as food prices rose at a higher pace, data released by the Pakistan Bureau of Statistics (PBS) said. It noted a hike in prices of chicken (9.52pc), pulse masoor (9.32pc), onions (7.55pc), garlic (5.21pc), bananas (5.02pc), pulse mash (3.33pc), eggs (2.96pc), pulse gram (2.85pc), mustard oil (2.02 percent), and vegetable ghee 1kg (1.8pc). During the week, prices of 22 items increased, five decreased, while prices of 24 items remained unchanged.
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). The pandemic is threatening Asia and the Pacific’s progress toward critical targets under the Sustainable Development Goals (SDGs), according to the report.
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.
The common people are facing the toughest time of their lives in terms of rising living costs fuelled by record-high food inflation. 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.
There are some indicators that the economy is heading in a positive direction, but the common people have suffered badly in the process. The government does not hesitate from overburdening the people with price hikes. People are worse off in the PTI government. They have been forced to miss the past Pakistan Muslim League-Nawaz (PML-N) government despite its alleged corruption and ills.
Prices and unemployment have reached their highest level in Pakistan. The situation has worsened in the aftermath of the pandemic. Undoubtedly, Pakistan performed impressively to contain human losses during the pandemic, but lockdowns and measures to contain the virus have affected its fragile economy badly. All advanced and regional countries, which had better economies, are recovering fast, but Pakistan lags far behind, though it had made structural adjustments before the onset of the pandemic.
Rising prices and unemployment are the biggest issues of Pakistanis and there is no immediate relief for them. Inflation in Pakistan could be 10.2pc on an annualised basis, which by 2025 is expected to remain around 8.6pc and the unemployment rate, which till this fiscal year was 4.5pc, may further jump to 5.1pc. The IMF projected an over 13.3pc increase in unemployment in Pakistan in a year. The government aims to introduce more reforms in the next few months. It means there is no prospect of relief for the people anytime soon and they will continue to suffer in the years to come.