The death of 11 women and children in a stampede in Karachi on Friday during the distribution of charity ration shows how inflation-hit people are prepared to risk their lives to get free food for their families.

The composition of the crowd also underlines that it mostly consisted of women from white-collar families, underlining the reality that the rapidly soaring cost of living is now starting to bite people across the economic divide.

Only the top quintile of the population remains insulated from the adverse effects of the rising prices on their life as middle-income families are now selling their assets to survive after having exhausted their life savings if they had any.

The Sindh Industrial and Trading Estate stampede has been one of the several such incidents occurring from Karachi to Khyber ever since Prime Minister Shehbaz Sharif rolled out his expensive, signature-free atta (wheat flour) distribution project from the start of Ramadan as despondency overtakes a vast majority of the 230 million people of the country suffering from one of its worst economic and financial crisis, exacerbated by the continuing political strife and uncertainty.

A finance ministry report reveals that the free atta scheme for the Benazir Income Support Programme (BISP) beneficiaries across Pakistan will cost the national exchequer nearly Rs100 billion. Punjab is contributing around Rs64bn, Sindh Rs15.6bn and Khyber Pakhtunkhwa Rs19.7bn to the scheme that the ruling PML-N and its allies think will help them recover some of the lost political capital before the elections.

The coalition government has, in a veiled manner, admitted to its inability (or unwillingness) to stabilise the economy, at least in the short term

At least 11 people, mostly women, are reported to have already lost their lives during stampedes at the atta distribution points in Punjab and Khyber Pakhtunkhwa. There also have been reports of excessive police violence on the people who have to line up not just for hours but sometimes for at least two days to collect free atta bags at various distribution points.

Many have questioned the manner in which the “government largesse” is being bestowed on the hungry poor and suggested that the better way would have been to raise the cash stipend for BISP beneficiaries to avoid long queues, stampedes and deaths.

A social media consumer writes: “The images and stories of death, desperation and despair at the government’s atta distribution points are horrifying. There were many humane ways to do this without causing such unnecessary suffering. Working-class lives are sacrificed by a cruel and incompetent regime at the altar of optics. If they had done it in a humane way, how would these little gods be getting the media coverage for them?”

The increasing rush of needy people at the food charities and free atta distribution points brings to light their utter desperation in the face of soaring costs in the last year. The weekly price inflation rose by nearly 46 per cent during the last two weeks of March and has stayed above 40pc since October.

The headline consumer inflation spiked to over 31.5pc in February and was projected by analysts to shoot up to 36pc in March. Fahad Rauf, a financial analyst at a brokerage, projects headline inflation to spike to 35.8pc in March from 31.5pc a month ago, mainly because of higher food prices.

In its monthly economic outlook report published on Friday, the finance ministry has also projected a further hike in inflation coupled with a slowdown of the economy, blaming both political and economic uncertainty for the present situation in the country.

The delay in finalising a deal with the International Monetary Fund (IMF) is causing economic distress in the country while political instability has begun feeding strong inflationary expectations, the report said, painting a very gloomy outlook of the economy.

It is expecting the second-round effect of policy decisions made earlier to raise energy and fuel prices, the central bank’s policy rate, and the rupee’s depreciation to secure IMF funding, etc, to further spike prices in April and beyond.

It said that the Monthly Economic Indicator — a tool to predict the economic growth rate based on past and current indicators — has further slowed.

“Inflation in March may remain in the upper bound as observed in February when it was 31.5pc,” the finance ministry stated. “Despite the State Bank of Pakistan’s (SBP) contractionary monetary policy, the inflationary expectations are not settling down,” the report concedes.

As a result, “inflation is expected to stay at elevated levels owing to market frictions caused by relative demand and supply gap of essential items, exchange rate depreciation and recent upward adjustment of administered prices of petrol and diesel”, it added.

Also, due to the lagged effect of floods, the production losses have not been fully recovered, especially those of major agricultural crops. “Consequently, the shortage of essen­tial items has emerged and persisted,” it said.

Moreover, the economic distress resulting from the delay of the stabilisation programme has exacerbated the economic uncertainty, due to which inflationary expectations have remained strong.

Pakistan has been struggling hard to revive the $6.5bn derailed IMF programme, although its own missteps like the petrol subsidy and attempts to directly borrow from commercial banks have further complicated the matters for the country, wrote a senior business journalist.

The finance ministry also conceded ineffective policy measures and the helplessness of the authorities in containing the inflationary spiral.

In short, the coalition government has, in a veiled manner, admitted to its inability — or unwillingness because of unclear signals being sent from the establishment about its future — to stabilise the economy, at least in the short term. Why would they if they aren’t certain of returning to power after the new elections?

Published in Dawn, The Business and Finance Weekly, April 3rd, 2023