When Benjamin Franklin said that nothing is certain in this world except for death and taxes, he should have added inflation to the list of certainties. But perhaps inflation wasn’t much of a problem in those days.
We should not be surprised at the high rate of inflation in Pakistan. For one thing, we are unable or unwilling to bring down the population rate. I can’t understand why the government insists that the birth rate is just above 2%. How can it be when almost everyone in our rural areas has at least six children? Naturally, with an exploding population, inflation has to be high, with demand exceeding supply and more mouths to feed with every passing year.
On the inflation front, the PML-N’s period (2013-18) was not quite as bad as that of the previous government. In fact, the rate of inflation has been much lower in the present government’s tenure whereas there was rampant inflation during the PPP government of 2008-13. According to a recently published news report, prices of all essential commodities increased substantially when the last PPP government was in power. Compared to this, during the present government’s tenure, the rate of inflation has not been so much (except for chicken meat), with prices of some essential items actually being less than when the last government handed over power to the present one. Daal (lentils), for instance, is now available for Rs90 per kg, compared to Rs135 per kg in 2013. The price of another essential commodity (sugar) rose in 2008-13 from Rs25/kg to Rs55/kg, but today it is still available for Rs55/kg. Again, ghee now costs 10% less than it used to in 2013. Similarly, electricity prices rose every year by 25% per month from 2008 to 2013, compared to 8% in the present government’s tenure.
They say that inflation has a lot to do with crude oil prices. But this does not explain why petrol prices in Pakistan increased substantially in the PPP’s reign, despite crude oil prices going down in the same period. When the cost of a barrel of crude oil was $145 (in July 2008) the price of petrol was Rs63 per litre, yet in 2013 it was Rs103 per litre (despite crude oil price being $93-94 per barrel).
Then there is the effect of the exchange rate on inflation. For some reason, during every PPP government, the value of the dollar has always increased against the rupee. The first thing Z A Bhutto did after assuming power in December 1970 was to lower the value of the rupee from Rs4.50 to Rs9.90 against the dollar, with disastrous effect on the economy. During the last government’s tenure, the rupee decreased from Rs68.80 to Rs98.30 to the dollar (a slide of 43%). The present government has been able to contain the slide of the rupee, allowing it to decrease by only 12% in five years (from Rs98.30 to Rs110.50 per dollar).
Of course, the PML-N government has been lucky in that crude oil prices have been lower during its present tenure. But the fact remains, despite high imports as well as low exports (compared to the previous government’s tenure), the rupee has remained stable against the dollar.
If you told the average voter in Punjab that the national debt has soared during the PML-N reign, he would simply shake his head. Even if he is told that every Pakistani now has a debt of Rs94,000 (it was Rs90,000 in 2013), it would not bother him. What he knows is that prices of eatables have not risen as much as they did when Nawaz was not in power.
So, unless something happens in the next few months to cause food prices to soar, the common man, particularly in Punjab, is unlikely to vote for any other party except the PML-N.
Published in The Express Tribune, March 12th, 2018.