Clutching at straws

Clutching at straws


September 19, 2021

The moral of the story about the boy who cried wolf is often cited that if you lie one too many times, people will stop believing you. What people often miss as part of the same moral in the same story is that if you keep acting in a manner inconsistent with your stated goals and objectives, your results will likely be a reflection of your action and not what you may have wanted.

This is somewhat the dilemma the government currently finds itself in as it clutches at straws to control runaway inflation in the country. The government has promulgated yet another presidential ordinance whereby it will set up a National Food Security Management Committee. To be headed by the PM, the committee will look for updated data on crop production and other metrics on essential food items. The ordinance will also empower the federal government to set prices for essential items, including wheat and sugar, through a centralised database.

This is not the first time that the PM has decided to personally tackle inflation of essential commodities and has been found warning officials of stern action for failing to control prices. But like the boy in the story, it seems that the PM forgets that beyond the punitive measures to control overcharging, hoarding and cartelisation amidst challenges for accumulating updated data on vital food stocks, the actions of his office perhaps have had the greatest impact.

At the moment, we are witnessing hyperinflation in the country. Petroleum prices are at their highest ever levels, as are the exchange rates and taxes. Simultaneously, subsidies provided on key essential items including wheat, sugar, electricity and gas are at their lowest ever levels, and are combining for a multiplier effect on the average consumer. In order to truly control rampant inflation, the government needs to look at every aspect of the food supply chain and optimise it for pricing at the consumer end. This would require the government to take some hard decisions and swallow quite a few economically bitter pills to maintain a desirable level of survival for the people.

Published in The Express Tribune, September 19th, 2021.

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