Farm owners and growers in Kalat district looted or destroyed tomatoes imported via trucks from Iran on September 9, arguing that local crop was ready for delivery to the domestic market. Instead, they asked the government to stop these essential imports till the arrival of the local harvest in the market.

As the prices skyrocketed after large swathes of crops were washed away by floods, the government allowed the immediate import of 13,000 tonnes of tomatoes and onions from Afghanistan and Iran for inflation-hit consumers. Analysts believe these imports would not be enough to meet the domestic demand, as one initial estimate shows 8.3 million acres of crops destroyed countrywide by the deluge.

Based on humanitarian grounds, they suggest a cheaper option to buy onions and tomatoes from India, as was frequently done before the trade ban imposed by Islamabad in August 2019.

The Kalat incident represents a lack of robust social values that promote collective interests.

The success of policies depends on responding directly to the needs of ordinary people for a more secure existence, rather than being limited to pro-self avenues

Similarly, an analyst points out there is nothing worse than someone taking advantage of another’s misfortune. He was referring to some traders from Punjab travelling to flood-affected areas in Sindh to buy livestock at throwaway prices from desperate cash-starved small farmers.

The two events demonstrate the social orientation of personal pro-self(s) — as experts define it — who only care for their own interests, and so they seek outcomes benefiting themselves only.

Looking at the big picture, much of national debate also revolves around one’s perceived performance of personalities and institutions rather than how to resolve the country’s multiple crises.

In sharp contrast, the other orientation is stated to be pro-socials who care for collective interests and seek outcomes benefiting themselves and others.

One can observe these two trends in our economy. According to anecdotal evidence, a firm forwent some of its profits to compensate its long-time dealer/wholesaler, who suffered a loss on goods purchased from it on legitimate grounds. Pakistan has also distinguished itself in the realm of philanthropy.

There are also examples where a manufacturer is also an importer, exporter and financier of its subsidiary firm and runs wholesale and retail outlets as well. This concentration is a response to the high cost of doing business due to the adverse regulatory environment and excessive speculative activities. Then the markets are rigged through cartels to avoid competition and block the entry of new market players.

The socio-economic environment created by pro-self orientation has eroded social cohesion and nurtured misguided political polarisation when collective efforts are needed to put things on the right course.

Social values such as fundamental rights, democracy, equality, rationality, patriotism, human dignity etc help establish the stability of social order. On the other hand, economic values are mostly related to monetary conditions.

Social values are based on a set of relative evolving and enduring principles that, as the historical record shows, push forward the development of human civilisations.

For too long, Pakistan has pursued pragmatic policies, setting aside guiding principles and opting for short-term tactical measures that overruled long-term strategies needed to put the economy on an even keel.

Some economic activities, such as the rupee’s freefall with severe impacts, are driven by speculation that fuels inflation, results in the volatility of interest and exchange rates and discourages private investment.

Because of violations of regulatory measures, the authorisation of two exchange companies was suspended on September 11 by the central bank for three months. Speculative activities should be subdued to divert investment to production-led economic activities.

For that to happen, economic growth has to be made socially sustainable. GDP growth measures only national income and not the living standards of the people.

Poor social indicators can explain the boom and bust cycle. To quote a development economist, the success of social policies depends not only on providing services but on inviting people’s participation to respond directly to the needs of ordinary people for health, education, employment and more secure existence. Social development, he adds, demands much higher political participation at all levels.

While recently, there was much talk of geo-economics taking precedence over geopolitics, the government is hesitant to import cheaper vegetables from India to overcome food hyperinflation by reducing shortages.

The demand for the import of cotton from India for the textile industry — the country’s largest industrial segment with a major share in exports — is not being allowed by the authorities. The All Pakistan Textile Mills Association estimates a $1.5bn production loss of cotton crops due to torrential rains and floods.

Our policymakers need to see what geopolitics is doing globally. The alarming situation has been summed up by Ian Goldin, a professor of globalisation and development at Oxford University, as follows: “I think we are living through the biggest development disaster in history, with more people being pushed more quickly into dire poverty than has ever happened before.”

And economic experts point out that in these changing times, businesses around the world must be managed in order to deliver the maximum social impact.

To quote former US secretary of labour and UC Berkeley Professor Robert Reich, everybody is ignoring the deeper structural reason for price increases: the concentration of the American economy into the hands of a few corporate giants with the power to raise prices.

If the markets were actually competitive, he argues, corporations would keep their prices as low as possible as they compete for customers.

In Pakistan, a significant rise in the inflation rate can be attributed to the fast depreciating rupee value, which has tumbled from Rs60 to Rs235 (on September 14) in the last 15 years after hitting a recent peak of Rs240. Unlike Pakistan, the US has a strong currency.

To quote Social Value UK, an advocacy outfit, “social value has huge potential to help us change how we understand the world around us and make decisions about where to invest resources. By changing how we account for value, we believe we will end up with a world with more equality and a more sustainable environment.”

Published in Dawn, The Business and Finance Weekly, September 19th, 2022