| April 22, 2002 | Monday | Safar 8, 1423 |
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Middle class misery
Phone complaint blues
THE International Monetary Fund has expressed the hope in its latest annual World Economic Outlook report that some of the current domestic and world economic trends would support stronger growth in Pakistan. It has listed lower inflation, improvement in external balances, appreciation of the exchange rate and decrease in the interest rates as encouraging domestic trends which would support stronger growth in Pakistan in the future. On the international front, the IMF views the signs of recovery in the US economy, moderation of recession in Europe and Asia, and an overall strengthening of consumer and business confidence as positive developments for Pakistan. But, in order to take advantage of these trends, Pakistan, according to the IMF, needs to ensure adequate revenue performance and push ahead with structural reforms and privatization. The IMF blames the global slowdown, increased regional uncertainty owing to the conflict in Afghanistan, heightened tensions with India, and a fall in cotton crop production for the decline in gross domestic product from 3.9 per cent in 2000 to 3.4 per cent in 2001.
One cannot but agree with the IMF on all these points. However, as long as the economy continues to grow at a snail’s pace, it would be almost impossible for the government to ensure adequate revenue performance. With revenues showing no signs of increasing, it would be well neigh impossible for the government to either revive the economy or do anything meaningful about poverty reduction. The continued emphasis by the Fund on keeping a tight lid on budgetary deficits has over the last three years reduced public sector development spending to little or nothing. Taking a cue from this, the domestic private sector also seems to have gone into hibernation. There is a proven correlation between public and private investment. Public investment in the socio-economic infrastructure and in capital intensive services and industries serves as an inducement for private sector investment. Without such public investment, the private sector would be seen to be investing only in safer but low revenue generating areas like spinning, etc. This attitude serves to discourage foreign investors. The IMF, therefore, should come up with some creative prescription to correct this position instead of continuing to force the government to reduce budgetary deficits, no matter how. In fact, this outmoded prescription has made the government raise oil and gas prices. This has in turn led to an overall increase in prices, rendering domestic investment almost unprofitable and making our exports non-competitive in the world.
Since overall investment has been sluggish all these three years, the rate of unemployment has soared during the period, thus more than neutralizing most of the poverty alleviation programmes launched by this government. The Rs250 billion which this government has used to buy dollars to window-dress its foreign exchange reserves cannot be used for repaying part of the debt nor for meeting the shrinking trade deficit or even for domestic use, for that would entail conversion in rupees which, in turn, would send both the exchange rate and inflation skyrocketing. Instead, this money would have yielded medium term gains if it had been invested in public sector development projects. This certainly would have immediately increased budgetary deficits, but the resulting increase in revenue collection in the medium term would have more than covered these deficits with a time lag of a year or two.
THE misery of the economically hard-pressed middle class was painfully evident from a letter written by a distressed Karachi citizen addressing our award-winning finance minister through this newspaper. The writer in question is educated, has a reasonable job, and lives in a middle class neighbourhood with his parents, wife and two school-going children. His problem: he cannot make ends meet despite cutting corners wherever he can, and is now contemplating suicide. He says that a large portion of his salary goes into paying rent, utility and medical bills, school fees and transportation costs. Thus, he ends up in debt at the end of every month, with inflation making it harder by the day for him to maintain a balanced budget. Undoubtedly, the man’s dilemma is shared by hundreds of thousands of people in the urban workforce today.
The middle class is finding it increasingly difficult to tackle the problems of survival amid growing inflation and diminishing purchasing power. A near-total absence of social services only adds to the problem. No wonder then that the suicide rate has risen considerably in recent years, with the majority of victims ending their lives because of their inability to cope with financial pressures. The Pakistan Mental Health Association puts the percentage of people suffering from depression at nearly 30 per cent in Karachi. The statistics in other urban centres cannot be too different. The absence of social support groups in society makes it hard for the suicide-prone to seek help without being stigmatized for it. These social problems are typical of a society in transition. It is vitally important that the government takes note of the increasingly precarious condition of the middle class and takes urgent action to give relief to this section of society. While it is perhaps not wise or practical to demand an across the board increase in salaries, as this in itself could further stoke inflation, there is a need for offering this section a relief package. The package could include measures such as relief for school fees or utility bills, for example, or concessions in transport.
THE saying that too much technology can be a bad thing seems to hold true in the case of PTCL. Despite putting in place a computerized system to attend to subscribers’ complaints, the corporation’s ability to promptly rectify faults has not improved in any significant way. If anything, it is more of the same: a cabal of linemen and mid-level technicians often hoodwinking their supervisors into believing that a particular complaint has been dealt with and cleared, when in reality it has not. The blame for this also lies with the supervisors — usually at the sub-divisional level — who often do not check for themselves whether a phone has actually been fixed. The result is that phones can be out of order for as long