Despite the cost borne by businesses in the form of chowkidars, musclemen, security guards and informal payments to area cops, the destruction and losses could not be averted. Livelihoods of a sizable population have been jeoparadised, especially of those who do not possess the means to recuperate the financial and material losses. Worst still, the effects are far from over in many sensitive locations across the country.
Distribution/sales of essential food items such as flour continue to be a major cause of anxiety amongst the residents of many riot affected localities. Dozens of incidences have occurred in south of Karachi alone where trucks carrying flour or milk have been hi-jacked and the supplies looted. As a consequence, the supply chains have been rendered ineffective due to the refusal of distributors and petty goods transporters to operate in such areas.
Businessmen and retailers complain that the matter has been brought to the notice of concerned town nazims and local police but in vain. Shortages, price hikes and mal-distribution of commodities/products have been reported all across settlements, especially remote areas of the country.
Efficiency at all stages of production and marketing is finally tested through the retail outlets. The addition of cost variables at the stage of retail has drastically raised the prices of commodities. It has a direct negative impact on the consumers. For example, during the last week of December 2007, the flour bag of 10 kg was sold at Rs290 in some shops of western and southern Karachi. This showed a 25 per cent rise over normal prices in other locations.
The worst hit were katchi abadis and remote location dwellers who had to top up transportation cost to carry these essential items to far flung locations as local shops were left without supplies. Similarl,y the vegetable vendors sold onions and potatoes at twice the usual prices.
The unprecedented rise in prices was caused by the precarious law and order conditions that did not allow wholesalers to operate. Feedback from a few respondents revealed that the ‘invisible’ costs of doing business in low income localities and far flung locations has risen tremendously. An auto-tyre shop on Super Highway reported that he has to pay Rs300/- per day to different categories of petty muscle men and even personnel of law enforcing agencies. This burden perpetually keeps him hand to mouth. Despite obediently obliging these local influentials, no protection or respite is guaranteed in times of riots or accidents. The shop owner lost his equipment / belongings and is forced to start from scratch.
On Chakiwara Road in Lyari, shopkeepers have to continuously oblige the front men of area gangs for regular favours. The gangs have burned or destroyed retail establishments whenever any resistance was offered. A well known sweetmeat shop on M.A. Jinnah in Karachi confirms that they have to extend informal payments to nine outfits including personnel of law enforcement agencies. It may be noted that to remain financially afloat, the shop keepers are forced to add these cost variables towards fixing the selling prices of commodities.
The other approaches adopted by retailers include the adultery in saleable provisions, sale of fake products under the guise of known brands, frequent changes in selling price and limiting the routine operations. Mainly affected in these circumstances is the ordinary consumer especially the low income households. Whereas the retailers cannot be exonerated for serous malpractices, the factors that impact the performance cannot be overlooked.
In relatively affluent locations, the retailers resorted to self-help measures for propping up security. Hiring private security guards was considered as the best solution. Many handicaps were recently detected in these arrangements. Whereas the security guards proved partially useful to check the shop lifters and petty thieves, they deserted their positions to rioting mobs.
The security guards have not been effective to prevent the black mailers, extortionists and law enforcing personnel from fleecing their clients. It was also noticed that the retailers welfare associations do not possess the capacity to come up with a viable solution to these compounded problems. Local administrations also proved ineffective in this fray.
The aftermath of this scenario is multi-dimensioned. The reputation of many stakeholders – such as government, corporate houses and elected leadership – is tarnished. Cost of living of ordinary citizens is raised without any benefit. Unless the security of retail business is given the right priority and is resolved by concerted official efforts, the people shall continue to suffer.