KARACHI, June 4: The Economic Survey for 2005-06 blames ‘extra market forces’ for sharp rises in prices of sugar, pulses, milk, beef, mutton and some vegetables.
This, however, comes as a casual reference and the survey does not say who these “extra market forces” are and what is their social status, political position and economic clout.
“Inadequate supplies of essential items provided rooms to extra market forces to play their role,” the survey observes while mentioning the shortfall in supplies and rise in prices of sugar, pulses and other items. Its prescription is “enhancing production and imports”.
The government has resorted to imports to offset the shortage of essential items with impact limited to prices of selective items in the market. Sugar is still selling at Rs36 and Rs38 a kilogram in major cities while a large number of sugar mills carry a capacity inventory.
“The key to addressing this challenge is to give due importance to minor crops and livestock and dairy sector,” the survey says, hinting at some new government initiative in the 06-07 budget to be announced on Monday.
With a claim of reducing substantially the number of people living below poverty line, the survey obliquely admits the “marginal increase” in the number of consumption inequality during 01 to 05. “More attention will be required in skill development in both urban and rural areas,” it suggests.
The survey is a political document and its authors claim that notwithstanding the sharp rise in prices of some food items in the second half of 05-06, “the prices of essential commodities are still relatively cheap in Pakistan”.
For example, it says, the prices of wheat, wheat flour, rice basmati broken, masoor pulse, gram pulse, chicken and red chillies in Pakistan are lowest in South Asia. Drawing up a periodical comparison of prices of essential items in the South Asian countries is a new challenge to the media.
When the references and observations made in the survey are compared with those in annual and quarterly reports of the State Bank of Pakistan, one finds that the SBP reports warned repeatedly of growing cartelisation and business syndicates in Pakistan’s market over the past few years and pleaded for framing anti-trust laws.
Much of the contribution in the 6.6 per cent growth in the national economy has come from the services sector that grew by 8.8 per cent in 05-06. The growth comes in aftermath of the devastating earthquake on October 8 last year and rising international oil prices.
There was not much of infrastructure investments and government or private business stakes in Azad Kashmir and the quake-affected parts of the North-West Frontier Province; hence not much of a loss in economic terms. In fact the relief and rehabilitation work in these areas is helping to give a boost to certain sectors of economy — cement, construction etc — in Sindh and Punjab and that speaks of the regional inequality in the country.
Speaking of regions, it is often asked why the federal and provincial governments do not issue economic surveys of the provinces and districts. Now that devolution and decentralisation have become the guiding principles, there is a need for periodical economic surveys of Punjab, Sindh, the NWFP, Balochistan, Azad Kashmir and the Northern Areas. Agriculture has been hit hard by a fall in cotton and sugarcane productions.
