?.. by Dr Shahzad Latif
The writer of this article has been writing for the past couple of years that Pakistan unfortunately soon will be facing a phenomenon of stagflation; economic stagnation (slowness) thus joblessness and very high prices!
Pakistanis are now facing two-faced sword; high prices and joblessness.
Unless we take some drastic steps, inflation will go out of hand and Pakistan will lag behind economically.
High inflation will force businesses to increase wages thus resulting in a further increase in prices! Additionally, the cost of production inputs will increase thus render our exportables even more uncompetitive. This will result in further job loss.
Poverty is very high in Pakistan. Poor are getting poorer. In Pakistan average annual income is U$1516?per person, which is one of the lowest in the area. They cannot afford the basic necessities for survival.
There is an estimated Rs.250 billion worth of charity given every year. Yet this charity has not made any dent in poverty in Pakistan. This responsibility lies on the shoulders of the state to ensure no one sleeps hungry and all the basic needs of the poor are met.
Drastic steps must be taken to eradicate this problem of poverty.
What we need is; a quasi-socialist economic system with the agricultural revolution.
Pakistan is supposed to be an agrarian country yet we import food items like vegetables, fruits, lentils, edible oils, and even cotton!
Our main focus must be agriculture, dairy, cow-sheep-goat farming, poultry farming, and fish farming.
We must quantify as accurately as the possible annual consumption of each and every consumable product and produce beyond needs with proper guidance to farmers.
All agriculture products must be bought by the government at a set rate from farmers directly and sold straight to consumers through?properly managed?utility stores, cutting out all the middle-men and hoarders to ensure availability to consumers at lowest prices possible.
Balance of the produce should be sold to value-adding agro-products manufacturing businesses to help create jobs.
This will ensure farmers maximize their production and receive good prices for their produce.
Agricultural universities must be required to do a better job and come up with innovative ideas through research such as the development of better seeds to enhance production per acre. Also, strategize where to produce what to maximize production. Other agro-products we import must be produced domestically. This is to have better control over prices and the least use of the foreign exchange.
These universities need to bring education to agriculture thus up bring a new generation of educated farmers.
In this time of scarcity of water, it is imperative to use modern ways to irrigate. The drip water system must be implemented to reduce water usage by more than 75%. Thus water will be available to irrigate more land.
Rivers and canals must be connected to have a better irrigation system, save water and start boat transportation. This will also supply water to areas where it is not available.
Higher production of fertilizer must be encouraged to ensure availability at reasonable prices.
Cartel hold on sugar industry must be removed to decrease and regulate price. The government should buy the whole sugarcane crop at the right price and then supply to the sugar industry. Then buy back the sugar at a set reasonable price to supply directly to the public.
Meat is one of the most expensive food in Pakistan. Public consume a very low quantity of meat and fish because of the high cost.
Pakistan is the fourth largest producer of milk, yet we consume water mixed milk, even God sake chemically made milk.
Capacity-building efforts must be made to enhance the production of meat of all kinds and milk to reduce prices domestically and enhance export of value-added products.
Agriculture must be controlled by the government to maximize production by research, employing efficient means, cold storages, proper pricing and supply to consumers and sales to agro-products? manufacturers.
This special focus on agriculture will have multiple benefits along with controlled prices for basics like onion, tomatoes, lemon, lentils, meats, etc., better lives for farmers, earning of foreign exchange, job creation and a reduction of migration to urban areas.
Additionally, we need to adopt inward-looking policies.
We must produce all possible importables such as; high brand women?s make-up, chemicals, cars, motorcycles, mobiles, etc. domestically in Pakistan. All big name brands and manufacturers of items most imported should be invited on very attractive terms to set-up manufacturing in Pakistan.
This way we can reduce imports, save foreign exchange as well as create jobs within Pakistan.
We should encourage to establish businesses in both public-private and 100% private sectors. Business establishment process must be made easy.
We must help establish small businesses especially industry based. Because in any country small businesses help create the most jobs. De-regulation must be done as much possible.
In Pakistan, inflation in most part is supply-side driven rather than demand-side driven. State Bank must be discouraged to increase interest rates to such a high level. Increasing interest rates slows down the job-creating activity. Also increases the cost of doing business.
Exports must be enhanced by reducing the cost of manufacturing inputs, thus making exportables very competitive in the world market.
Indirect taxing must be eliminated as much as possible, like on mobile phone cards, etc.
The actual cost of petrol, diesel, gas, and electricity must be made public. No taxes should be added on these by the government. These must be supplied to the public at true cost.
This will have inflation controlling and economic development effect.
Direct taxes must be ensured to be collected from the whole population at a very low rate. There must not be a choice that one can be a non-filler.
Reduced government with no layers as per proposed structure by the writer (See:?NIZAM.pk) will deliver better service. Instead of blaming each other for lack of water, cleanliness, schools, etc. there must be only one government layer that would be responsible and answerable. This will also reduce government expenditures by a great deal.
This quasi-socialist agenda must be confined to agriculture and production inputs.
The current economic system and political structure have not provided the very basic necessities of the public. This has resulted in a much greater number of have-nots.
We must make concrete structural changes to ensure Pakistan is put on the right economic and social development path. .. by Dr. Shahzad Latif, (Political Economist & Reformist), 15 Jun 2019