Unrealistic claims

At its meeting in Islamabad on Wednesday, the National Security Council (NSC) discussed the issue of high prices of essential items and the Medium Term Development Framework, mostly in a self-congratulatory way, and in one instance, to the point of losing touch with reality. Prime Minister Shaukat Aziz informed the participants of various measures that his government undertaken for an efficient management of 11 essential items
These measures, he said, had positively impacted the prices, and further that special directives had been given to provincial chief ministers to monitor the prices of essential commodities. This portrayal of the situation would differ sharply with the view of the common man, who finds it increasingly difficult to make ends meet
The NSC was also told that inflation is a short-term phenomenon, and the government is committed to bringing it down to 5 percent within the next two years. The causes of current inflation were identified as expansion in private sector credit, increase in money supply over the last three years, quantum rise in the prices of crude oil in the international market, and increase in the support price of wheat, besides shortage of certain food items. So far as the first two factors are concerned, they affect the prices of luxury goods, and hence need to be ignored in the present context
The more pressing problems relate to the needs of the poor. Going by the government's own admissions 30 percent (some unofficial estimates put the figure at nearly 40 percent) of the country's population lives below the poverty line. Another huge segment hovers just above this line. For all these people, the prices of essential items are of primary importance
Unfortunately, for the last many years these have consistently shown an upward trend. Some of the increases like the one caused by oil prices or enhanced support price for wheat may be unavoidable, but shortages - quite often created artificially by unscrupulous hoarders and black marketeers - can certainly be overcome through timely and effective government action
The government has the necessary mechanism to do that. In the event of a supply side problem, if for some reason the private sector is hesitant to import a needed item, the government can import it via the Trading Corporation of Pakistan. In case, the shortage is related to distribution, it can seek the help of the National Logistical Cell.
Given the prevalent levels of poverty, the government must use all means at its disposal to bring immediate relief to the common man. For the longer term, it must come up with new strategies for poverty reduction. Mere claims of having made a dent in the scourge of poverty are not going to help the poor or the country's overall developmental process. Yet, despite the mounting evidence that shows during the last few years poverty has advanced rather than receded, General Musharraf went on to make an astonishing claim on the subject
The per capita income, he said, had jumped from $501 in 2000-01 to $736 at present, which, he averred, was a clear indication that poverty is on its way down. But the situation on the ground does not support that conclusion. Higher per capita income, needless to say, does not automatically translate into reduction in the number of poor. Surely, the per capita income has increased, as is obvious from the economic growth figures for the last few years, but so have income inequalities. The rich have grown richer and the poor even poorer.
The briefing that the participants of the NSC received on the Medium Term Development Framework (MTDF), 2005-10 also made similar claims on the basis of figures with which many independent experts would want to disagree vociferously. It was stated that building on the 'gains' of the last five years, during which 5.1 million jobs were created, the MTDF aims at generation of additional seven million jobs to reduce unemployment from 7.5 percent to 4 percent and cut down poverty by 30 percent
If these figures are to be believed, in another five years' time, unemployment in Pakistan will be at about the same level, if not lower, as that of the most advanced nations of the world. As it is, the current unemployment rate in the UK - Europe's most robust economy - stands at 4.7 while in the world's most advanced nation, the US, it is 5.1. Clearly, our rulers badly need to make a reality check.