LAHORE: We try to hide our failures by selectively flashing some doctored statistics of other economies and we also strategically choose periods for comparison to make current indicators like inflation look lower than regional economies. This is one of the most unfortunate ways of conning the nation into believing ‘all is well’.
This jugglery or manipulation of data would not address the woes of consumers. For instance it has been leaked by the government planners that the rise in wheat and sugar prices in Pakistan is much lower than the increase in the rates of these commodities and is lower than the global increase in last year.
According to the statistics the global price of wheat increased 27 percent, while the domestic market recorded an increase of 28 percent. The rates of sugar jumped globally by 56 percent while increase in Pakistan was only 18 percent.
This is statistically true but there is a catch. What is being ignored here is the fact the wheat rates in Pakistan jumped from Rs35/kg near 18 months back to Rs80/kg now that is an increase of over 120 percent for the domestic consumers.
There was no justification for further increase in wheat rates when the prices were already very high. In the same way sugar rates jumped from Rs55/kg to Rs110/kg. The government claims the retail price is Rs85/kg but consumers are denied supplies at these rates. The rates hover around Rs100/kg.
The increase in essential commodity rates has been unprecedented in Pakistan and cannot be justified through doctored statistics. The reality is that most of the consumers have been forced to curtail their food intake or have abandoned their other essential needs like health and education. Covid-19 has played havoc with the incomes of the lower strata of society.
Even the minimum wage has not been increased for the last three years. People have to bear the burden of 100 percent increase in the rates of essential commodities with the same incomes they earned three years back or even less.
The economic planners are now under immense public pressure to increase the minimum wage. The workers expect a hefty increase to compensate for three years of static minimum wage. But the industrialists would protest strongly even to a modest rise of Rs1000 in minimum wage.
We cannot expect the manufacturers to bear increased expenses of Rs7.2 million per year (for textile mills employing 600 workers) when they are pulling off government subsidies on power and energy.
Those employing 1,000 workers would have to pay additional Rs1 million per month or Rs12 million annually. If the minimum wage is increased by Rs2,000 the additional salary bill would also double for all manufacturers, some employing up to 6,000 workers.
Increasing minimum wage is inevitable but it would certainly impact industrial activities. It was a folly to ignore the minimum wage for three years.
Another claim that is far from the truth is the incomes of rice, maize and cotton farmers have increased substantially due to government policies. Their income is calculated on the basis of the rates of these commodities in the market at the time of harvest. It is a well-known fact farmers part with their produce at rates much lower than those prevailing in the market. The middlemen are the major beneficiaries in agricultural trading. We can safely say that if a crop is worth Rs100 billion in the open market the farmers get between Rs60-75 billion and the rest is pocketed by the middlemen.
It is true that the rates of maize have more than doubled in the global market and demand for rice is also higher, which did increase their prices. We harvested the lowest quantity of cotton in the last two years. The increase in its rates was also not passed on fully to the farmers. The farmers are not in good shape because they do not get the actual market value of their crop. The main beneficiaries of higher prices of crops were the middlemen that have become stronger in this government. The farmers had no role in the wheat scandal as it was triggered by the middlemen. The rural population is living under more stress than their urban brethren. They are bearing the brunt of high inflation and low incomes.
The planners would have to chalk out a fair policy that protects the rights of manufacturers as well as the welfare of the workers. The industrial subsidies should be targeted and given only to the efficient while plug be pulled on the inefficient operating at the expense of the taxpayers.