EDITORIAL: Social and economic disparity was always high in Pakistan but now it is growing to a dangerous level. The story has now morphed into something that may be beyond the metaphor of ‘the haves and have-nots’. The middle class appears to be shrinking and many are falling below the poverty line.

On the other hand, extravagance by the rich continues and shows no signs of abatement. For example, the only locally assembled car that is selling like a hot cake lately, is also the most expensive one and continues to attract a premium of nearly 50 percent of its factory price, while lower segments of society are struggling to cope with balancing their budget for kitchen essentials.

According to BR Research’s calculations, average price level of consumer goods has doubled in the last six years while average income – particularly of daily wagers - up by only a two-thirds. The average Joe is becoming poorer by the day. And there is no stopping it. Lately, food inflation has spiraled out of control as 12-month moving average food inflation is approaching 30 percent. The trend shows movement in a very dangerous zone.

Many households simply cannot afford two meals a day any longer. At the same time, a new Canadian coffee chain opened in Lahore has broken all sales records (based on transactions) of that coffee shop anywhere in the world on its opening day.

Long queues of people arrived from far and wide in a suburb in Lahore to sip the much-hyped imported coffee. At the same time, the poor queued outside outlets where free (or cheap) food items are being sold or distributed.

Evidently, there are two Pakistans. One is where people are successfully maintaining an ostentatious life style and flaunting their wealth for fulfilment of their fantasies by excessive consumption – such as buying expensive cars (including EVs), foreign travel, eating out in fancy restaurants, and the other is, where people are struggling to eke out a living and finding it ever more difficult to meet basic nutritional needs of their family members.

The inhabitants of the former are thinking of protecting their savings or multiplying them by looking for ways to convert these to gold, real estate, commodities and foreign currency. They continue with their opulent ways and excessive consumption. While residents of the other Pakistan with their limited means find it difficult to continue with education of their children and meet their family’s basic needs.

Pakistan is said to have a very high philanthropic ratio. Every day, numerous charity organizations and thousands of wealthy individuals pay for food for those who cannot afford it. Moreover, people support others when they are in need for a health emergency or in spending for festivities such as weddings. Many employers in the informal sector do not give bonuses or market-based salaries to their employees, yet they do support them in their hour of need.

This reeks of a sense of entitlement among the rich as they are happier offering ‘help’ like alms to the needy. Unfortunately, salary-based individuals among the poor and lower middle class have historically suffered in silence and co-existed with it, even if that means struggling to provide their children basic rights of education and health.

Many have also been in a state of happiness despite congested housing and the absence of safe and free drinking water. Many have also been at peace with poor policing and law enforcement. However, one thing they may not be able to make peace with is hunger.

So far, mercifully, there have been no episodes of mass hunger or starvation due to sharp price increases. However, on the face of it, the incidence of stunting and malnutrition is quite noticeable. Staple food items remained enough to feed the population.

However, that phenomenon is changing. Population growth is fast outpacing grain production. Moreover, smuggling of food items due to perverse incentives and lax border control management has increased considerably. Imports are becoming expensive due to the Ukraine war, and the country’s ability to import is fast diminishing due to growing balance of payment (BoP) challenges.

Time is not far when the charitable organizations may not be able to provide food to the poor. Moreover, widespread shortages of medical and fuel supplies can become a reality if the country ultimately commits sovereign default. Last but not least, it is important to note that the stark contrast between haves and have-nots has always existed but in woefully bad economic conditions injustices become more painful.

Copyright Business Recorder, 2023