LONDON: Mr Ghulam Mohammad, Pakistan’s Finance Minister, said here today [Oct 7] that Pakistan’s decision not to devalue its rupee was primarily based on the desire to earn dollars. The Minister, in an interview, said the cost of production of raw jute, which is Pakistan’s main dollar earner, “is determined mainly by the cost of necessities of life of the cultivators in East Pakistan.

“The bulk of the cultivators’ income is spent on the buying of rice... . For the past few years the price of rice has been rising in East Bengal due to the unsettled conditions in Burma and Siam, the main exporters of rice to the Dominion.

“East Pakistan does not grow all the rice she needs and the marginal imports from Burma and Siam determine the price of the rice,” he added. Stating that the demand for jute was not unlimited, he said that if Pakistan had devalued like the other sterling countries, “the fall of Pakistan’s dollar earnings could not have been recouped” by the resultant impetus to the Dominion’s exports. “Devaluation would not only have decreased our dollar earnings, but also raised the internal prices in daily necessities... .

Published in Dawn, October 8th, 2024