Pakistan, with a population of about 160 million people has undergone a remarkable macro economic growth during the last few years, but the core problems of the economy are still unsolved.
Inflation is one of these core problems. The government claims that in order to keep the prices of essential commodities under control, it has been taking various measures throughout the year. These measures include: a liberal import regime for food items including zero rating of the imports of these commodities.
In order to provide relief to the low and middle income groups, the government has been selling wheat flour and sugar through the outlets of the Utility Stores Corporation (USC) at much lower prices than the market. In order to augment supplies of essential commodities in shortest possible time and at lower freight charges, the government has also allowed the import of various items through land routes from neighbouring countries.
But; all these are secondary measures. Problems like inflation and poverty cannot be resolved by applying secondary measures. These need strategic planning. Unfortunately in Pakistan, these core problems have never undergone such planning process. The government has never invited foreign investment for the production of basic goods. Agriculture sector, on which the major industries rely for the raw material, has not been given sufficient subsidies.
The major rise in the prices is because of the increasing prices of oil (as increased prices of oil increase the cost of production) but no such steps have been taken to control the oil prices, or at least lessen the effect.
Selling basic food items at USC is not an achievement. Did it cause effective distribution of goods? No, privileged groups have taken the major part of goods from these USCs, while the poor couldn’t even have the access over these basic goods.
The government further claims that the role of Trading Corporation of Pakistan (TCP) has been enhanced. The TCP is active in importing sugar from around the world to build up strategic reserves with a view to continue selling sugar at less than the market price through the USC. The TCP has also been asked to import various kinds of pulses to meet the domestic consumption requirement and stabilise their prices in the country.
The TCP should plan the process by which we can get the maximum production at lower cost at home, instead of formulating plans to import the items. Domestic productions at less cost will not only make the availability of goods much easier but also aggregate supplies domestic and the industry will get developed.
ANNA M H B
Lahore
