Recently, I wrote about the devastating – and largely unreported – impact that resource scarcity is having on Pakistan’s fragile economy and society. Barely a day goes by without a new data point that illustrates the size of the problem.
Today, for example, the papers report that the two main political parties (the ruling PPP, and its arch opponents, PML-N) have come together to try and fix an economic crisis that they admit has its main roots back in the 2008 resource price spike:
Sources said the government had told almost all parties that most of the economic pressure had built up because of carryover of huge fiscal deficit from the previous government which did not pass on energy prices to consumers even when international oil prices increased from $90 to $147 a barrel and the current government was facing a similar situation. Most public sector corporations have since been bleeding mainly because of this single factor.
Power companies are getting so desperate for fuel oil (which they are using to replace gas, whose shortage has led to an electricity crisis), that they’re signing sovereign-backed contracts for imports on deferred payments, going against the express wishes of the state-run Pakistan Oil Company, and, seemingly, without explicit permission from the government.
In Punjab, meanwhile, grain markets are grinding to a halt, as the government attempts to tax agricultural production in order to plug its yawning fiscal hole and – I suspect – to make it politically easier to raises taxes on urban consumption. Traders are on strike, accusing the government of destroying the ‘backbone’ of the economy.
The impact on ordinary people is marked. The gas shortage is pushing urban residents back towards a reliance on biofuel. “I am purchasing stove to use firewood in the 21st century thanks to the government,” complains one resident of Rawalpindi.
Fortunately, food shortages are yet to hit one of the citizens of nearby Islamabad: President Zardari. He has his own camel in the Presidential Palace, because he thinks the milk is healthier.
The President House also has a herd of black goats. One goat is slaughtered everyday when Mr Zardari is there.
Earlier, his trusted personal servant, Bai Khan, used to buy a goat from Saidpur village every day, but now a herd has been kept in the presidency to avoid frequent visits to the animal market. The animal is touched by Mr Zardari before it is sent to his private house in F-8/2 for slaughtering.
Good to see one man, at least, taking resilience seriously.