Inflation and price hike has affected everyone badly. High prices of each and every thing have made it very difficult for poor and middle class to survive and feed their families. Our Ruling and upper class has nothing to do with the issues of common people. They are enjoying all facilities of their lives without thinking about the poor. Our Channels and media houses are giving more coverage to upper and ruling class. Non issues are addressed and discussed more while common and basic issues of general public are ignored and not taken seriously. Politics and interests of ruling class are focused and given more attention while general public’s issues like unemployment, inflation, terrorism, lack of basic necessities etc are not given much attention.
If we look at the figures and numbers given by government, everything seems fine but ground realities are entirely different. Poor is becoming poorer day by day. People don’t have earning power. Job market is very poor and majority of educated, skilled and talented youth don’t have jobs. Situation is getting worst and problems for the poor are rising day by day. People have nothing to do with the figures and numbers. They look at the ground realities which are quite miserable.
If we look at the developed and welfare countries, we come to know that they have excellent and people friendly system and conditions for poor in general. They collect tax and then use the tax money for the welfare of people. They do their best to make the lives of common people easy and comfortable. Their prices mostly remain same or raised once a year. With raise in the prices they increase the rates of minimum wages as well. Prices hike doesn’t affect them as government provides them as much relief as possible. While our situation is entirely opposite. Tax is stolen by powerful and the amount collected anyhow either goes in the corrupt hands or is used to facilitate the upper and privileged class.
Readers, we are an oil dependant country and unfortunately prices of our all items depend mostly on the rates of oil. We are failed to promote and use the alternate sources for fuel. We didn’t worked effectively on solar, wind, sold waste, coal and bio gas systems etc and just relied on petrol and diesel etc. we are far behind in innovation, research and development. We are using traditional means of getting energy and are not using modern techniques and tools. We should work on this important sector as well and should reduce our dependency on petrol and diesel.
All prices go up with increase in the fuel prices. Local vendors and investors raise the prices themselves. We don’t have a proper monitoring and control system for prices at government level. We really need an effective and powerful price control and regulatory authority. People tax money should also be used to provide them the subsidy and burden of prices hike and inflation should be shared by government as well.
Now come to the issue of Rupee Depreciation. There are several reasons and also there are some good signs behind it as well. Dr. Farrukh Saleem gave some very interesting facts and details in his YouTube channel’s current affair program Common Ground. He said there is no need to panic on this issue. He gave some solid reasons behind his suggestion. He said we need dollars for importing items while Pak rupees for the items which we produce within the country. He gave very interesting details about what we have in the country. According to him if we look at flour, in a country of 23 Crore population every person in Pakistan uses flour around 115kg per capita/annually. Pakistan Produces around 2.5 Crore Ton Wheat so we have almost enough flour for ourselves while we need to import just around 3-4 lac ton Flour for which we need dollars. So we should consider that almost our flour is secured and we are the eighth largest producer of wheat. Then he said that in Pakistan we produce about 50-60 Ton of sugar. On an average every Pakistani uses 25 kg sugar per capita/ annually so we have sugar in surplus and is more than our demand even we can export our sugar. So Sugar is also secured in Pakistan.
Then Dr Farukh said that on an average every Pakistani eats 80 eggs per Capita/Annually. 2 Crore eggs we produce ourselves in Pakistan so here is the situation that we have more supply and less demand for eggs in the country so eggs are also secured. About Milk he said that on an average each Pakistani uses 119 litre of milk per capita/ annually. We need 26 billion liters milk which is also available in Pakistan. Then he added that every Pakistani eats around 13 kg of rice per capita/ annually so we need around 30 Lac Ton rice. Pakistan produces 45 Lac Ton rice so a huge amount is in surplus which we export. He said that our Flour, Rice, Eggs, milk and sugar etc are secured so there is no need to be Panic.
Dr. Farukh further says that no doubt the Rupee has depreciated very quickly and we have to look at the reasons behind its depreciation. He said that during the first eight months of the year 21-22 our trade deficit was 32 Billion Dollars while in the first eight months of the next year this deficit was only 21 Billion Dollar so there was 45% improvement in Trade deficit. The rupee should have been strengthening due to this improvement but ground reality is totally opposite and Rupee depreciated very quickly. The matter of concern should be that why it’s happening and what are reasons behind this depreciation. He highlighted some reasons. He said that the Faith of investors on our economic policy and its makers is reducing or loosing and this is the reason behind quack depreciation of Pak Rupee. Then he gave reason number two that may be our economic policy makers don’t have a roadmap and if they have any roadmap then that has not been shared with the public. We have to go from point A to Point B and we need to know about the strategies or a roadmap from our economic policy makers that how they can take us to our goal.
Then while giving another reason, he says that for these four months i.e. March-June Pakistan’s due foreign Payments are around 7 billion dollars while the State Bank’s reserves of foreign exchange are around 3.2 Billion Dollars. We have to make payments of 7 billion dollars and we have reserve of 3.2 billion dollars so of course there will be a pressure on Rupee.
In his reason number 4, he gave the example of the game of egg and hen. IMF is saying that first of all friendly countries should give the guarantee that they are ready to give 4-5 billions to Pakistan while friendly countries says that first go to IMF Program so Pakistan has come in between the game of Hen and egg to know that which one from IMF or friendly countries will come first.
He further said that whenever the currency of a country depreciates then there are always some positive impacts of depreciation as well. He said that it makes the exporters happy as they get comparative price of their good in International markets. According to him another impact is about remittances. Our overseas workers send the money to Pakistan mostly by Hundi so whenever the rate of Hundi and Inter-banking comes close so most of the money is transferred by banking channels. So we will see this positive impact as well.
He said that it’s a matter of concern for us to know about what will happen in future. Government’s figures show that inflation rate is around 40 %. Inflation will hike further. The price of our import Items will also increase further. So dollar shortage will further boost. Media will play its game as they have to make money. Their job is to spread frenzy and panic. Dr. Farukh said that apart from these ground realities there is no need to be Panic. We need to look, explore and discuss on the reasons.
Our Civil and Military heads are also quite optimistic to take the country out of this crisis. Prime Minister Shehbaz Sharif said that the government has successfully overcome the “shadow of default” and that a staff-level agreement with the International Monetary Fund (IMF) would “soon” be reached.
Army Chief General Asim Munir, in a meeting with the top 10 businessmen of the country, assured them in the presence of Finance Minister Ishaq Dar that the worst is behind us, the country has overcome the possibility of default and we will prevail as a nation. According to sources, the army chief told the top businessmen representing different sectors that nations face difficult times and we are also facing tough times, but the worst is behind us and we will prevail. General Asim repeatedly referred to Islamic teachings to assure his audience that Pakistan will successfully overcome the present testing times. The businessmen were told commitments had been secured from friendly countries for investments in agriculture, mining and IT. The government expects advanced equity from these countries. It was said the civil and military leadership acted in tandem for securing these commitments.
Recently, according to newspapers and their sources in the Ministry of Finance has also said that China has delayed the return of the $2 billion safe deposit for one year. According to these sources, financing is also expected from Saudi Arabia and United Arab Emirates. These sources in the Ministry of Finance said that Pakistan needs confirmation of external financing for the agreement from the International Monetary Fund (IMF). According to sources, another 300 million dollars have come to Pakistan from China in the same month, while foreign exchange reserves are expected to exceed 5 billion dollars in the same month.
Readers, no doubt we are facing the worst scenario but the need is to find workable and feasible solutions from our policy makers. Also there is a strong need for the whole nation and all stakeholders to show solidarity on the common national issues.