Economy, society and institutions

By Dr Faisal Bari | Published: December 22, 2008

A number of people in Pakistan have been arguing, in political, journalistic and intellectual circles, that the problems of the 'common person' are of inflation, employment, poverty, access to electricity and water on the economic side, and that of the threat of terror on the political side. But he/she is not concerned about issues of the judiciary, whether it be restoration of the chief justice or the issue of the award of extra marks to the daughter of the sitting 'justice', or the issue of the powers of the president as opposed to the prime minister or the fact that the current president is the head of a political party as well. And the list can be fairly long.
It is true that the immediate concerns of most people in Pakistan, facing economic downturn, hardship and the real possibility of a meltdown, are about employment and inflation. How can it be otherwise? A majority of the people in the country are quite vulnerable to income and poverty shocks, a significant number, without getting into the debate of whether it is 30 percent or 40 percent, are poor, and/or are bunched around the poverty line, how can inflation, unemployment and economic slowdown not be concerns?
If prices rise, as they have been in the last few years, and incomes do not, it would be silly not to be concerned. In fact the people should be more than concerned: they should be petrified. With the state providing poor quality health and education services, and almost no social protection nets, loss of job or purchasing power would be devastating. Similarly, for most of the people of the country, the fact that the state is not able to provide safe drinking water to the majority, cannot manage to provide uninterrupted electrical and gas supply to the country, should be a cause of concern for the people. Their well-being is deeply tied to provision of utilities and the quality of services provided by the relevant departments.
But this is not the issue. There are two things to keep in mind here. If people are concerned about the fact that they might have to face poverty or hunger or unemployment or lack of good health in the near future, does this preclude them from thinking about other things or being concerned about other things or feeling passionately about other things? Yes, they might prioritise their concerns in a way that hunger and poverty come first, and they may even have a bit of a lexicographic structure for concern, but it still does not mean that they will not be or should not be concerned about other things.
Even more importantly, though the concerns might be about inflation and employment, given the connectedness of various issues, one cannot separate these concerns from other larger and more medium to longer term concerns. Take any issue you like and the analysis will be more or less similar.
In the case of inflation, we know that there is usually a tradeoff between lowering inflation and keeping higher growth. If you assume tighter fiscal and monetary stances (raise taxes, lower expenditures and lower monetary expansion) inflation is likely to come down but since you also squeeze demand directly and indirectly, growth is likely to also slowdown. Now consider a government that was more concerned about keeping a higher growth trajectory than about bringing down inflation, if a tradeoff was offered to them, would this not bring the economic and the political spheres together? Will the concern about inflation not also be a concern about what sort of government is in power?

This news was published in print paper. To access the complete paper of this day. click here

Your Opinion

Bramerz Bramerz Bramerz Bramerz

© Copyright 2004 - Nawaiwaqt Group of News Papers - All rights reserved.

Daily Weekly Both