Ramzan Economics

Same old story  

Not so surprisingly, stories doing rounds on the internet speak of Ramzan specific price reductions – likes dates, etc — in predominantly non-Muslim countries, but a sharp escalation in practically all Muslim countries. This trend is indicative of not just different approaches in economics, but also different mentalities. The West’s Christmas sales, for example, have few parallels in our neck of the woods. Over here, Ramzan comes with stiff price hikes, to the extent of extortion. And since Ramzan formalities are factored deeply into the local mindset, these price fluctuations are taken as fixed costs by most of the people.

Ironically, the West – where the liberal market model still largely holds – believes in forcing prices downwards, cyclically, to prompt more number of sales to push profits higher. And the Muslim world – where the market is far more controlled – lets demand and supply raise prices indefinitely in times like Ramzan, etc. The older adage, that higher prices fetch greater profits, still holds sway. That theorists, and most practitioners, favour the former model, has not altered predominantly Muslim economic thinking on the subject so far.

The situation in Pakistan is no different. Each year the government assures price control in Ramzan but it is never able implement its writ. This time too the finance minister wrote to all chief ministers to ensure price control, but the first day did not set a good example for the government. Even the Ramzan Bazaars, which were supposed to provide more affordable goods, have been a letdown. People have complained of little difference in prices and far worse quality of products than the local market. Even if the government can ensure some remedial measures some days into the holy month, its efforts will be greatly appreciated by a public overcome by extreme heat and load shedding, not to mention a weak economy.