KARACHI:
The world is facing historically high inflation these days. The trend began with rising oil prices in the world market due to the war in Ukraine launched in February 2022. Since we are living in a global village, our economies are obviously inter-linked. The effect of an event in one part of the world is felt in the region and beyond. Thus, while the Russian war on Ukraine has affected the economic activities in the central Asian state, it has caused supply chain problems, leading to shortage of goods and services far and wide as well as increase in oil and gas prices — and hence a rise in inflation globally.
The problem does not end here. Just as people move from disturbed areas to safer ones to save their lives, people also shift their capital to safer currency which is now just a click away. The American dollar is considered to be safest currency in the world. So in time of any crisis, people start converting their capital into the dollar. This shifting strengthens the US dollar which further flares up the inflation fire in the developing and under-developed counties. So we in Pakistan, like many in other countries in the world, are being doubly hit by inflation: through skyrocketing energy price and the high-flying dollar.
Ejaz Ahmad Magoon
Doha
Published in The Express Tribune, September 27th, 2022.
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