PRICES are declining, though slowly. But Suhail Mahmood is not happy. The plunging headline inflation hasn’t brought much relief for the 33-year-old draughtsman who works two jobs — at a construction company in the morning and at an architect’s office in the evening — to make ends meet.
“The people who are telling us that prices are on their way down or the economy is recovering are either cut off from the reality or are lying to the people. Only if they knew what it takes for people like me to pay their bills,” Suhail muses.
The number of people working more than one job in the cities in Punjab is growing for some time now as years of hyper-inflation and economic slowdown on the back of chronic energy shortages have significantly eroded purchasing power of the lower and middle income groups.
“The two jobs help me survive. But it is barely enough to pay all my bills,” Salahuddin Ahmed, a B.Com graduate who hasn’t landed a permanent job even six years after graduation, says of his dual income.
Few believe in the government claims that the economy is recovering; “What recovery?,” asks Salahuddin. “For me the economy will turn around the day I will get a decent permanent job that will pay all my bills.”
There is significant evidence to suggest that income and other inequalities have increased in Punjab since 2008, the year the economy began to slow down and the cost of living began to escalate on the back of rising global food and energy prices.
Even declining domestic prices, especially of energy and a few food items, on plunging global commodity markets and improving macro-economy in recent months have not helped make the life of people like Suhail and Salahuddin easier.
“Decrease in prices and economic stabilisation are very recent phenomena. You cannot expect the benefits of macro-economic improvements or lower inflation to trickle down to the common people so soon or without growing the economy by an average of seven per cent or above,” argues Abid Burki, a professor of economics at the Lahore University of Management Sciences (LUMS), who has recently co-authored a study concluding that inequalities have increased across economic classes as well as geographical regions over time.
Private employers also remain sceptical of the government’s claims of economic recovery and unsure of its growth plan, and most businessmen are unanimous in their criticism of the lopsided economic policies of the government.
“Before anyone asks about the reasons for the lack of trickle-down effects of stabilisation, he must analyse the quality of the so-called recovery,” emphasises business leader Gohar Ejaz.
He says whatever stabilisation has been achieved so far is because of external factors like falling global oil and commodity prices, and multilateral and bilateral assistance. “Our internal economic realities haven’t changed a bit. How can anyone expect a broad-based distribution of wealth across different economic classes without creating jobs and dismantling inequality traps by developing industry and social and economic infrastructure, and increasing exports?”
Gohar points out that the economic policies being pursued are increasing the cost of doing business in Pakistan, stalling investment and shifting thousands of manufacturing jobs to other countries.
“Our policy-makers are turning Pakistan into a lucrative market for manufacturers of China, India and elsewhere by encouraging import-based consumption. Such policies will further impoverish our people rather than enrich them,” he concludes.
Other entrepreneurs like Almas Hyder concur. “Pakistan’s economic policies do not create economic activity or jobs in the country; these encourage imports and concentration of wealth in the hands of a few. For example, when the Punjab government launched the Metro Bus project in Lahore, it also imported glass for the bus stops from Turkey instead of procuring it from local manufacturers. You think this kind of thinking will tackle the issue of concentration of wealth in the hands of the elite,” he wonders.
Published in Dawn March 22nd , 2015