Piling up pressure on the down-trodden
KARACHI:
The Swiss Agency for Development and Cooperation, in a report released last week, said 48 per cent of Pakistanis faced food insecurity because of the war on terror and its fallout on economy and development. Separately, a top official of the World Food Programme in Pakistan said consumption of wheat in the country dropped 10 per cent as persistently high inflation snatched purchasing power of people who could not sufficiently buy the most basic food staple.
Though inflation has come down to 13 per cent this year compared to over 20 per cent last year, it is still pinching the people, some of whom have also lost their jobs due to domestic economic slowdown and the effects of the global financial turmoil. About half of the country’s budget goes to debt servicing and defence expenditures, leaving very little to spend on social welfare.
In the fiscal year 2009-10 ending June 30, financial constraints forced the government to slash its development budget by 40 per cent to Rs300 billion and many ongoing projects could not be completed while the new ones remained in the pipeline. These public works projects could be a source of employment and generate income for a large number of poor and middle-income people.
Subsidies
The government is gradually reducing subsidies like those on power supply and essential commodities in a bid to improve its finances and to meet a key condition of the International Monetary Fund which is providing an $11.3 billion bailout package.
In the power sector, tariffs have been increased by 18 per cent since October last year and plans are under way to jack up prices by another seven per cent in coming months. All this has been done to cut subsidies, piling up the pressure on the already hard-pressed people.
Besides, the utility stores, a network of outlets providing basic food items at discounted rates, have been increasing prices of commodities, taking away an opportunity from people to buy food items at cheap rates and make ends meet.
In the budget for the next fiscal year announced on Saturday, the government reduced the amount of subsidies by Rs173 billion.
Poverty
According to estimates, poverty level has come down to 17.2 per cent from around 30 per cent in the first half of this decade, but it is a disputed figure. In rural areas, in which more than 60 per cent of the population lives, the incidence of poverty is widespread.
Many in these areas depend on subsistence farming and solely depend on their crops. They have no access to health facilities, education, electricity and gas. Though development work is reported to be going on in some areas, there is a lot more that needs to be done.
During the rule of the previous government before 2008, the economy grew somewhat better, but its benefits did not trickle down to the lower class. Many gave the impression that the poor would eventually reap the fruits of the economic revival, but before it could happen the economy reverted back and a slowdown started.
Remedy
In order to improve the condition of poor, the government should give priority to their basic needs and divert some resources towards that area. It may offer through the utility stores, particularly in rural areas, staple food items like wheat flour and rice at highly subsidised rates to enable them to feed their families.
In Iran, during the difficult times in the early nineties after the war with Iraq, it offered flour at highly subsidised rates.
Besides, modern technology can be introduced in cultivation of crops to give a boost to food production and provide the farmers a better living.
Published in the Express Tribune, June 7th, 2010.
The Swiss Agency for Development and Cooperation, in a report released last week, said 48 per cent of Pakistanis faced food insecurity because of the war on terror and its fallout on economy and development. Separately, a top official of the World Food Programme in Pakistan said consumption of wheat in the country dropped 10 per cent as persistently high inflation snatched purchasing power of people who could not sufficiently buy the most basic food staple.
Though inflation has come down to 13 per cent this year compared to over 20 per cent last year, it is still pinching the people, some of whom have also lost their jobs due to domestic economic slowdown and the effects of the global financial turmoil. About half of the country’s budget goes to debt servicing and defence expenditures, leaving very little to spend on social welfare.
In the fiscal year 2009-10 ending June 30, financial constraints forced the government to slash its development budget by 40 per cent to Rs300 billion and many ongoing projects could not be completed while the new ones remained in the pipeline. These public works projects could be a source of employment and generate income for a large number of poor and middle-income people.
Subsidies
The government is gradually reducing subsidies like those on power supply and essential commodities in a bid to improve its finances and to meet a key condition of the International Monetary Fund which is providing an $11.3 billion bailout package.
In the power sector, tariffs have been increased by 18 per cent since October last year and plans are under way to jack up prices by another seven per cent in coming months. All this has been done to cut subsidies, piling up the pressure on the already hard-pressed people.
Besides, the utility stores, a network of outlets providing basic food items at discounted rates, have been increasing prices of commodities, taking away an opportunity from people to buy food items at cheap rates and make ends meet.
In the budget for the next fiscal year announced on Saturday, the government reduced the amount of subsidies by Rs173 billion.
Poverty
According to estimates, poverty level has come down to 17.2 per cent from around 30 per cent in the first half of this decade, but it is a disputed figure. In rural areas, in which more than 60 per cent of the population lives, the incidence of poverty is widespread.
Many in these areas depend on subsistence farming and solely depend on their crops. They have no access to health facilities, education, electricity and gas. Though development work is reported to be going on in some areas, there is a lot more that needs to be done.
During the rule of the previous government before 2008, the economy grew somewhat better, but its benefits did not trickle down to the lower class. Many gave the impression that the poor would eventually reap the fruits of the economic revival, but before it could happen the economy reverted back and a slowdown started.
Remedy
In order to improve the condition of poor, the government should give priority to their basic needs and divert some resources towards that area. It may offer through the utility stores, particularly in rural areas, staple food items like wheat flour and rice at highly subsidised rates to enable them to feed their families.
In Iran, during the difficult times in the early nineties after the war with Iraq, it offered flour at highly subsidised rates.
Besides, modern technology can be introduced in cultivation of crops to give a boost to food production and provide the farmers a better living.
Published in the Express Tribune, June 7th, 2010.