When governments cannot control inflation

APRIL 10, 2019

Remember the optimists? It seems like ages, but did they not say Imran Khan and the Pakistan Tehreek-i-Insaf will change the face of the country? That within hours of a PTI government taking over, the US dollar would sell for Rs 60? That $200 billion would be repatriated the next day? Do you think any of them is regretting voting for the PTI? While one cannot vouch for everybody, I do know a few people who admit to yearning for the days when the Muslim League and the Peoples Party were in charge.
Imran Khan apparently thought regulating the prices, including those of US dollar and stock market shares, was child’s play. If only life were so simple.
While inflation is a fact of life and cannot be wished away, the kind of inflation we are witnessing these days can be controlled. Unfortunately, this government seems to have the most inept and incompetent people at the helm of affairs in the country’s history. This is partly the reason we are likely to face rampant inflation in the near future.

While inflation is a worldwide phenomenon, countries like Japan have managed to significantly reduce it. Pakistan, unfortunately looks increasingly like the countries where nothing can be done about it. After many years, we’re likely to see double digit inflation even as (re)defined by the government. No wonder the common man is suffering and confused. The bad news is worse is yet to come.

Those curious as to why the government has been unable to do anything about the problem should simply take another look at the people surrounding the prime minister. His cronies are not likely to suffer from the effects of inflation. One of them had the temerity to tell the people the other day to eat only less (he is unaware possibly that millions of Pakistanis are forced to literally beg on the streets for every meager meal). The smugglers in PTI’s home province of KP are not worried about the high prices of fruits, vegetables and other edibles. Those eating regularly at expensive restaurants in Karachi and Lahore will not lose any sleep if they have to pay double what they do for their food today. But ask the waiter who serves them, or those who commute to work in jam packed buses, and they will tell you they are already finding it hard.
Every government before this one has blamed its predecessors for the poor state of economy. Yet every government has managed to keep prices at reasonable levels. With PTI, the only thing the ministers can do is to say that the previous government is responsible for all the country’s problems. Well, it’s been eight months now since they took power. This should be time enough to make a difference. The prime minister had told people to judge his government’s performance after 100 days. Now it’s been more than 200 days and there is no sign of an improvement in the state of affairs.
All they had to do was to improve tax collection. That requires going after tax evaders. If the government cannot resist pressure from smugglers, property sector crooks and electricity and gas thieves the people will take to the streets and boot them out.