DESPITE the inflation rate slowing to a six-year low, it remains top concern of the majority of Pakistanis, followed by unemployment and increasing poverty. IPSOS, a Paris-based surveyor, in its latest Consumer Confidence Index, has identified rising tax burden as another highly troubling factor for the households. The findings of the survey showed that an overwhelming 79% – four out of every five people – believed Pakistan was heading in the wrong direction. Only one in five Pakistanis thought the country was on the right track. Its findings revealed that females were more pessimistic about the country’s direction than males. Only 14% of women saw the country moving in the right direction, compared to 23% of men.
The observations of the survey reflect the ground realities and these should serve as a guideline for the policy-makers to make necessary adjustments to ease life of the common man and boost confidence of the people in the future of the country. No doubt, the Pakistan Bureau of Statistics (PBS) reported this week that inflation eased to 4.9%, the lowest rate in six years and the leadership of the incumbent government is justifiably taking credit for the phenomenon but it must be kept in mind that the rate of inflation has come down but prices continue to rise, albeit slowly. The drop in inflation doesn’t mean that the back-breaking prices have been reversed, therefore, people continue to feel the heat. Prices went up due to the cumulative effect of the unprecedented hike in the tariff of both electricity and gas during the last few years; surge in prices of the POL products not just because of fluctuation in the price of oil in the international market but also due to addition of more taxes and imposition of unrealistic petroleum levy; increase in tax rate; and removal of subsidies even on essential items like milk. The prices also went up due to the inability of the Government to effectively check unscrupulous business activities by greedy elements. According to the survey, Pakistan sees its external sector showing signs of stability with a low current account deficit, improved export and remittance performance. While the exchange rate has also remained stable, Deputy Prime Minister Ishaq Dar, who successfully kept the exchange rate stable, remarked that the rupee’s current value is artificially high and should not exceed Rs240.
The rupee is not recovering against the dollar mainly because of undue interference and pressure of the International Monetary Fund (IMF). As the factors behind the price-hike have not been addressed by Federal and the provincial governments, people see no hope of any improvement in their life. Similarly, continued political uncertainty and confusion has a telling effect on the overall confidence of the people and some of the policies in the name of structural reforms like closure or sale of national institutions and discontinuation of the pension scheme have demoralized the ordinary citizen. The situation can change provided economic activities revive and industrialization takes place affording opportunities of more employment opportunities and more exports. The Special Investment Facilitation Council (SIFC) continues its efforts to attract foreign investment and bolster local investor confidence. However, prevailing political, economic and security challenges, coupled with inconsistent policies, hinder investment efforts. Job security has also become a major concern in the country due to policy changes at the government level and slow growth of the economy. Resurgence in terrorism is also affecting the pace of economic development besides sending negative signals to the prospective investors. The issue needs to be addressed on priority basis and our armed forces have the ability to tackle the challenge given unflinching political support and increased coordination between the federal and provincial governments.
