Squeezing the poor - Adnan Adil Saturday, April 16, 2011

The rate at which our rulers are increasing the prices of items of daily use, we should look forward to the day when they might charge a tax on the air we breathe. Given the fact that unemployment is rampant – even the government has admitted it is – (the number of unemployed stood at 3.02 million, according to the Pakistan Labour Force Survey 2009-10) and that minimum salaries for the working class are meagre, the official minimum wage being Rs7,000 or $82 a month, the ever soaring prices of food and fuel amount to squeezing the poor like a lemon is squashed in the presser.

On March 31, the prices of petroleum products and CNG shot up for an umpteenth time during the last three years of the Pakistan People’s Party regime. The price of diesel, widely used in public transport vehicles, has more than doubled – from Rs 41.60 in May 2008 to Rs 92.90 in April 2011. This measure is bound to have a multiplier effect on transport costs and consequently the prices of other essential items, especially food items which have already registered up to 150 percent increase since early 2008.

During the tenure of the PPP, the price of wheat flour has jumped from Rs14 per kilogramme in January 2008 to Rs30 per kilogramme in December 2011, cooking oil has gone up from Rs350 to Rs865 per five kilogramme, sugar from Rs20 to Rs70, packed milk from Rs35 to Rs70, basmati rice from Rs 50 to Rs90, beef from Rs 140 to Rs300 and mutton from Rs250 to Rs500. The prices of lentils such as moong and mash, which are considered the poor man’s food, have risen by more than 100 percent during this period.

Further, there were spells spreading over weeks which saw the prices of vegetables, skyrocketing by 200 to 300 percent in the second half of 2010. At one point in time, the price of onion, essential for almost all cooked food, soared from Rs 30 per kilogramme to Rs 150 per kilogramme and then remained at Rs 80 per kilogramme for several months. Shortages of wheat, flour and sugar for several weeks also took their toll on low-income groups.

Needless to say, soaring food prices have raised the level of malnutrition in the country. The other day, Wolfgang Herbinger, Director for the World Food Programme (WFP) in Pakistan, was quoted as saying that the Pakistan government had pushed food prices too high for an impoverished population, and that malnutrition levels had risen.

He also said that food prices were high and that ordinary consumers were paying double the price for wheat compared to three years ago. He quoted statistics that suggest malnutrition levels in Sindh have reached 21 to 23 percent. A World Food Programme survey in early 2011 found that in some flood-hit areas 70 percent of people were taking out loans and using them even to pay for food. The UN official rightly said that the government has a monopoly on determining the wheat market through its massive purchases, hence it is directly responsible for this price-hike.

Owing to the price-hike, poor households are forced to substitute their food with less nutritious and sub-standard food. Recently, a woman, working as a house maid and whose husband is a private security guard in Islamabad, told this scribe that she mostly cooks vegetables, and occasionally lentils, for daily meals and that too by purchasing the cheapest available vegetables from the market in the evening when the grocers would dispose of the residual and mostly sub-standard vegetables at low rates.

Her family, like most low-income families in this country, would taste protein only at the annual festival of Eidul Azha. When asked about her strongest desire, she replied: “I wish I could have an egg at breakfast.” I had expected she would wish for gold ornaments or a house of her own.

When she was asked what she would do if she received an extra few thousands rupees, she said: “I would buy meat for us to eat.” This is the state of those households where both men and wife are employed. Obviously, the misery of the families where only one person is earning money is much worse. In our country, a vast majority of people can be categorised as the ‘working poor.’

In these circumstances, an increase in fuel prices is excruciating for the poor workers who have been made to pay higher fares for public transport. In big cities such as Lahore, Islamabad and Karachi, the two-way fare between home and workplace for a commuter costs at least Rs1500 per month and may be as high as Rs3,000 per month for those living at some distance from the workplace.

Another essential expenditure is the cost of the bare minimum shelter. Monthly rent for a single-room accommodation in a slum of Lahore or Karachi is a minimum of Rs2,500 to Rs3,000. One can imagine the plight of a labourer, earning Rs6,000 to Rs7,000 per month – the standard wage of an unskilled labourer. Having paid for his transport fares and accommodation, a poor worker is hardly left with Rs1,500 to Rs2,500 to sustain himself and his family.

Obviously, one man’s earnings cannot meet all the household expenses – the cost of food, electricity, water, natural gas or kerosene oil. In most cases, to make both ends meet, women and children join the labour force. Even then, a family of five to six people cannot meet all its essential requirements. Clothing, medical care and education are luxuries here. Hard-working and skilled people are forced to wear used clothes, live in slums, and indulge in self-medication or turn to quacks for the treatment of illness.

There is little comfort for middle-income groups, too. In the last couple of years, the prices of cloth and garments have doubled. The same is the case with the fees of private schools and colleges. Add this to the fact that medicine prices are ever increasing. In the absence of functional public health and education systems, middle-income groups are sliding downhill.

That this strangulating price-hike is an outcome of the economic policies of successive governments is clear. The state is so weak, and lacking in moral legitimacy, that it cannot collect tax from the rich. Nor has it demonstrated a willingness to put an end to wasteful government expenditure.

Governments have only one handy weapon, that is, to bleed the poor as much as possible through printing excessive currency (deficit financing in economic jargon), taking bank loans at high interest rates, raising the utility prices and taxing the items of mass consumption like fuel, edible oil, sugar and other eatables.

In Pakistan, existing inflation is not a product of the economic factors of demand and supply, but has resulted from poor governance and oppressive policies adopted by a callous and selfish elite.

The writer is a freelance journalist.

Source : http://thenews.com.pk/TodaysPrintDetail.aspx?ID=41884&Cat=9

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