Pakistan

Falling dollar, rising inflation

Written

3 years ago

Apr 13, 2021 06:28 AM

Tahir Malik

Wisdom on the streets says that when the dollar soars high, inflation rises too, while a fall in the value of the greenback leads to a reduction in prices of necessities.

Tahir Malik

Perhaps for the very first time, the dollar has fallen by almost Rs. 15 against the Pakistani rupee, however, commodity prices have remained constant. Per unit cost of petroleum products, electricity and gas have not reduced either.

So why did the people not get any relief? A question being asked by everyone yet answered by none.

The truth is that the economy is suffering from a triple lack of planning, teamwork and expertise. Day by day, troubles faced by the country increase with alarming speed. All hopes by common folks to be able to earn and for inflation to fall have been dashed.

The government itself appears baffled and confused. The Finance Minister says GDP will grow by 4% this year. The International Monetary Fund (IMF) and World Bank have put the figure at 1.5% and 1.3% respectively. Our population will continue to expand by 2.5% per annum. Thus, one way or the other, our GDP will go into negative growth. Experts say Pakistan needs to grow by at least 6% this year, otherwise, more than 3 million people will become unemployed.

The theory about dollar rates affecting inflation appears weak here. The government’s plans and its willingness to execute them is all that matters. Till now neither has the federal government shown us its vision, nor the direction it wishes to take the economy on. As for homework, well, the less said the better.

This sordid tale started with our own local Aristotle, Asad Umar, whose appointment was trumpeted as the gateway to Pakistan’s prosperity. Then we were informed that the IMF-sanctioned Hafeez Sheikh and Raza Baqir (Governor State Bank of Pakistan), have magic wands which will restore us to glory. Now, this responsibility lies with Hammad Azhar while Shaukat Tareen is also on the way to take up some charge or the other. How seriously the PTI-led government planned for the economy is evident from the current game of musical chairs.

Pakistan’s economy was heavily reliant on cotton and textile. Cotton is a boon, a crop that takes minimal water to grow while bringing in precious foreign exchange. Thanks to the untiring negligence of our rulers, we have had the lowest production of cotton in 30 years. Out of 212 total government organizations, 197 are running in loss. The steel mill is Rs. 480 billion in debt while for PIA this figure is close to Rs. 430 billion. The government’s bright idea about generating money is through increasing the price of basic utilities. It is now a real possibility that subsidy worth Rs. 140 billion will be abolished, transferring this amount over to the heavy ones the government is already shouldering.

Meanwhile, imports of sugar, wheat and cotton have increased too. The agriculture sector, once our economy’s mainstay, is now in tatters. In 2018, a bag of DAP fertilizer was retailing for Rs. 2200. By 2020 its price tag had soared to Rs. 3467 and today, it stands at a truly mind-numbing Rs. 5137. With such a rapid rise, how will the prices of food commodities not rise?

The desperate ruling coalition is focused only on procuring more and more loans.

We can now term the dollar-inflation theory an old wives’ tale. Unless the price of utilities and commodities goes down, nothing else will. For the immediate future, inflation remains our fate.

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Tahir Malik

Tahir Malik is a seasoned journalist and analyst at GNN

Pakistan

President approves appointment of ad hoc judges to SC

President Asif Ali Zardari gives approval under Article 182 of the Constitution

Published

9 hours ago

Jul 26, 2024 10:19 PM

Hussnain Bhutta

Islamabad: President Asif Ali Zardari on Friday approved the appointment of ad hoc judges to the Supreme Court of Pakistan.

According to a statement issued by the Presidency, the President gave approval under Article 182 of the Constitution.

The judges include former Apex Court judges Justice Sardar Tariq Masood and Justice Mazhar Alam Khan Miankhel. They will be appointed as ad hoc judges to the Supreme Court for a period of one year.

Business

FPCCI hosts conference to address IPP issues, high electricity costs

Former caretaker Prime Minister Anwaar-ul-Haq Kakar says the problem of IPPs is under discussion in the Senate; the rights of the people have been fighting for the small battles of the people before

Published

8 hours ago

Jul 26, 2024 11:45 PM

Hussnain Bhutta

Lahore: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) “Businessmen Conference” on Independent Power Producers (IPPs) was held at FPCCI Regional Office Lahore on Friday.

Addressing the FPCCI “Businessmen Conference,” Former caretaker Prime Minister Anwaar-ul-Haq Kakar said that the issue of IPPs is 24 million people, including industry. The problem of IPPs is under discussion in the Senate; the rights of the people have been fighting for the small battles of the people before. Astronomy sitting on social media is spreading frustration about the country; the future of the country is bright. IPPs are not scoring points by raising the issue. We will resolve the problem through dialogue.

Former Caretaker Federal Minister for Commerce, Industries, Investment & Interior and FPCCI Economic Policy Business Development Think Tank Chairman Dr Gohar Ejaz said that the negligence of the government agencies of IPPs was being put on the public. A forensic audit of IPPs should be conducted. The whole of Pakistan is saying with a voice that has been affected by the IPPs that we have to find a solution to terminate the deal with IPPs in every case. We never want our country to go into crisis. There will be a policy that Pakistan will move forward. There is electricity, but the problem is the cost of electricity. How will we fight the world for expensive electricity?

Atif Ikram Sheikh, President FPCCI and Patron-in-Chief United Business Group (UBG) and Former Caretaker Provincial Minister for Industries, Commerce and Energy and Patron in Chief United Business Group (UBG) SM Tanveer announced that, on behalf of the entire business, industry, and trade community of Pakistan, FPCCI would plead the case of unbearable capacity charges of IPPs to the apex forums of the Supreme Court of Pakistan and Special Investment Facilitation Council (SIFC)-as the last resort to save the economy and the people of Pakistan.

They stressed that the problem would also be explained and a solution given. The business community has said industries are shutting down due to expensive electricity and excessive markups.

They further said that it is impossible to do business at this electricity rate. Anwaar-ul-Haq Kakarhas has been elected president of the FPCCI Economic Policy Business Development Think Tank. Electricity is so expensive. The electricity bill is unbearable. Due to incorrect contracts, capsat charges have to be paid; electricity prices are the biggest problem in Pakistan right now. Annual Rs 2,000 billion is being removed from the pockets of 24 crore people regarding capacity charges, and 25 % of the industry has been closed. Such IPPs cannot run the country.

Crime

PTI and PML-N activists stage fake incident for fame: Police

Neeli Pari has been accused of assaulting Tahir Anjum for criticizing PTI founder Imran Khan, but police sources claim the incident was premeditated

Published

8 hours ago

Jul 26, 2024 11:35 PM

Hussnain Bhutta

Lahore: Pakistan Tehreek-e-Insaf (PTI) supporter Aneela Riaz, also known as Neeli Pari, and Pakistan Muslim League-Nawaz (PML-N) activist Tahir Anjum reportedly staged an incident to gain fame within their respective parties, the police sources said on Friday.

Neeli Pari has been accused of assaulting Tahir Anjum for criticizing PTI founder Imran Khan, but police sources claim the incident was premeditated. They stated that the two individuals knew each other beforehand and had even met prior to the altercation. The motive behind this staged drama was to gain popularity within their parties.

Police reports indicate that Neeli Pari was arrested at Tahir Anjum’s residence, where she had allegedly gone to apologize. Both individuals have reportedly confessed to planning the incident.

Earlier, a local court in Lahore sent Neeli Pari to jail on judicial remand. The PTI activist was presented before a judicial magistrate, who rejected the police request for her physical remand and instead ordered her judicial remand.

The incident took place outside the Punjab Assembly, where PTI was holding a symbolic hunger strike protesting the incarceration of Imran Khan. During this event, PTI activists stopped the vehicle of the PML-N cultural wing leader and began to assault him. Footage shows Neeli Pari slapping Tahir Anjum before he was rescued by his party workers.