Daily Times

The intent behind the government’s decision to intervene in the market to control prices of food items is no doubt very noble; and it springs primarily from concern for the people even if things like elections and votes would also have counted as serious considerations. Yet such measures invariably involve very large subsidies, especially for a population as large as ours, so it’s inevitable for them to pressure the fragile fiscal situation and end up being a part of the problem rather than the solution.

Plus, it’s also an abject acceptance of the fact that the government has failed to control prices using conventional market methods. Food inflation, especially, has been a problem ever since this administration took office. First it blamed market forces, then mafias and special interest groups, and all the time vowed to take action against them and restore prices. None of that has happened so far; only the official explanation has changed. Now we’re to believe that the post-Covid rush to restore international economic growth, which has pushed up international commodity prices, is also responsible for our worries. But that does not explain price distortions in the local market and disruptions in supply chains before the pandemic. And neither, unfortunately, does the government.

In a way in a situation like ours where prices are deliberately, and quite artificially, skewed to the upside, subsidising the poor man’s food only amounts to putting more officially sanctioned money into the hands of all the looters and plunderers who upset the price mechanism in the first place. And since subsidies come out of taxpayer money, or debts that we are so used to taking, it is the people of Pakistan who are going to foot this bill as well. It seems that after trying everything under the sky and still struggling to control prices, the government has become rather desperate and is looking to send signals that people might appreciate. However, it must not lose sight of the fact that people will only be happy once price sanity is restored, and half-baked approaches that have few, if any, precedents of success are likely to leave them angrier than happier. *