Tuesday, September 24, 2013

Electricity and Petrol bombs ready to blast soon

It has been long time that Pakistan economy is undergoing many evils like terrorism, corruption and political instability. Every morning when people wake up, they look in to the headlines just to know either any new evil has come in or not. The most important among these is inflation which Pakistani economists try to overcome but in vain due to many reasons like corruption etc. People living in this country are unable to fulfill basic needs of everyday life. And hence newly terrorist activities (suicides, kidnapping, murdering, robberies etc) take place which weakens social and economic situations of the people day by day. According to an international report many Pakistanis are living under the poverty line. The poor are becoming poorest and the rich class is becoming richest. Anyway this is the area of great discussion and we should be restricted to our topic about the new evil of energy prices. I would like to share a short story in this aspect, when I was in bachelor, one of our teachers used to say that every economic theory and policy fails to work in Pakistan economy. I some time thought that our teacher is lying but today I accept that he was right. Behind every success and failure there is an invisible hand and in case of Pakistan that invisible hand is political virus which has become so healthy that it works everywhere if it is politics, sports, education, health or any other activity which are for social welfare.  In this regard a famous economic theory comes to my mind “Phillips theory/curve”, which states that inflation and unemployment are inversely proportional. It means that if one increases the other one will definitely decrease and vice versa. But in case of Pakistan the theory fails because both these evils are chasing the peaks and moving positively in the same direction. Leaders and economist are trying to overcome but they fail every time and I finally remind the famous saying of our teacher that every theory fails in Pakistan.

Nowadays the government is busy in preparing another bomb for blast before Eid-ul-azha. According to a newspaper headline, oil and electricity prices are likely to increase from start of October. The newspaper reported that 4 Rs per liter oil product prices will increase which will also enhance the prices of electricity up to 30% and people would have to face another tsunami of inflation. Officially it is announced that increase in energy prices are due to international market oil prices but the fact is, government has taken new loan from IMF and this is conditionality from International Monetary Fund (IMF) to trim down subsidies in energy sector. Our respected finance minister says that Pakistan economy will not be defaulted and we will return the whole loans on time and economic situation of people will be better off but he should think upon it that people living in this country will bear the whole cost and will worsen the economic life of people. This fresh decision of government will lead inflation to cross all limits. People are already hanged in many economic problems, living under the poverty line and this decision will extremely hurt them which will result to commit suicide. Every day we listen about unwanted events of murders, robberies and suicides which are likely to be enhanced by these two bombs. Instead of a cut in energy sector subsidies government should reduce their own expenditures and stop hurting people because they are unable to bear any new costs.

No comments:

Post a Comment