Daily Writeup & Opinion | How Price Has Become the Cause of Worries in Pakistan?
The following article, “How Price Has Become the Cause of Worries in Pakistan?” is written by Sameeullah Kakar, a student of Sir Syed Kazim Ali. Moreover, the article is written on the same pattern, taught by Sir to his students, scoring the highest marks in compulsory subjects for years. Sir Kazim has uploaded his students’ solved past paper questions so other thousands of aspirants can understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
Introduction
Price hikes have undoubtedly become a source of economic instability, social distress, and anxiety among the population worldwide. Moreover, it increases the cost of living and pushes the country into the inflationary cycle. The fact, therefore, remains the same: the more the rise in the prices of commodities in a country, the higher the social unrest in the state. Apart from that, Pakistan, in a state of trouble and unrest, has faced a price hike of unpredictable range, which can be understood from the increase in the price of a single parcel of flour from 1245 in July 2022 to 2865 in July 2023. Instead of the worries mentioned above, the price hike has also caused an unstable economy, a decrease in power to purchase and the fall of business and Foreign Direct Investments. Moreover, it has caused food insecurity and unemployment in society, leading to suicide attempts, easily detectable from the suicide attempt of Mohammad Masood in Rawalpindi. However, the menace of a hike in price can be countered through the implementation of monetary and taxation policies, along with the encouragement of market competition and better agricultural methods. Thus, if the suggested measures are adopted in time, Pakistan can control the constant increase in price. The short essay under discussion sheds light on the current situation of price hikes in Pakistan, along with their drastic impacts and possible remedies to counter the issue.
“The more the hike in price, the more the number of social evils.”
Harold Wilson
The current situation of price hikes in Pakistan
In the current situation, Pakistan has been facing a rise in the price of basic commodities. Moreover, it has come into that a majority of people have become unable to manage the basic necessities of life, observable from the rise of the price of a twenty-kilogram flour parcel from 1245 rupees in July 2022 to 2865 in July 2023- according to the Sensitive Price Indicator Pakistan’s Bureau of Statistics. Apart from that, the increase in the price of basic commodities has compelled the earners to commit suicide, prominent from the suicide attack of Mohammad Masood in Rawalpindi, presenting the worst picture of price hikes in Pakistan.
How price has become the cause of all worries in Pakistan?
Pakistan has become the centre of problems. Moreover, a number of factors have encouraged the evils, but one of the main reasons is, for sure, the constant rise in the price of basic commodities of life. The first implication caused by the price hike is the higher cost of living and the decrease in the power of people to fulfil the basic necessities of life merely with their fixed monthly incomes, especially the poor. It can be predicted from the report of the Sensitive Price Indicator Pakistan Bureau of Statistics, according to which the price of one kilogram of sugar has risen from 88 rupees in July 2022 to 138.96 in July 2023, compelling the people to compromise on the standard of living. Thus, the price hike has caused several worries to the people of Pakistan.
“Adopting measures for the treatment of price hikes is treating social evils.”
Mohammad Abdullah- DD Ombudsperson Balochistan
Similarly, the other major drastic impact of price hikes is the fall of a country within the inflationary cycle. Moreover, the rise in the price of commodities causes economic instability and uncertainty due to the high wage demands of labourers to meet basic necessities. To meet the demands of the labourers and servants, the country of Pakistan has taken loans multiple times. Currently, she made an agreement with the Inter Monetary Fund (IMF) in 2023 and signed a deal of three million dollars to meet her expenditures and pay the due amount of the loan that has already been taken. Similarly, due to the rise in oil prices in Venezuela, she started overprinting her currency, leading her to hyperinflation in 2016. Thus, a price hike leads a country to fall in the inflationary cycle.
In the same way, the increase in the price of basic commodities slows down the rate of business and decreases the foreign direct investments in a country. Moreover, to meet the necessities, labourers demand higher wages from companies, and the company transfers the additional cost to the end consumer to bear the loss. However, when the price of the commodities increases, consumers become unable to buy them, which becomes a source of loss for the investor, compelling the investor to withdraw their investments from the country. The same case can be observed from the news of Honda Atlas Cars Pakistan shutting down its plants in Pakistan in the near future just because of the devalued currency, along with higher taxes in the budget. It, in turn, has a negative impact on economic growth and employment opportunities in society. Thus, the price hike is the cause of a decrease in the business and Foreign Direct Investments.
Additionally, social unrest is another implication of the rise in the price of commodities. Moreover, the rise in price imposes severe impacts on the people of multiple sectors, like teachers, due to which the government and society have to face social challenges and unrest in the country. According to reliable sources, teachers have protested more than three times in 2022 to have an increase in salaries, disturbing the social peace of society. Furthermore, the sit-ins have also disturbed the policies of the government that have to be formed independently to produce fruitful results; however, they are usually moulded due to price hikes and social unrest in society. Thus, price hikes do cause a rise in social unrest.
Further on, the rise in price of commodities has increased poverty and unemployment. A number of industrial sectors have been closed and shut down due to the price hike of the commodities and to the reliable resources; steel mills have been privatized in Pakistan with the removal of 4544 employees, including the assistant managers, in the cost reduction program just because of the high price of the raw materials in Pakistan. These steps have led people towards unemployment, which has, in turn, exacerbated poverty. According to the report of the Ministry of Planning and Development submitted to the National Assembly of Pakistan, fifty million people live below the poverty line in Pakistan. Thus, price hikes have increased poverty and unemployment.
In addition to that, price hikes have caused both food and home insecurity in Pakistan. Moreover, with the rise in employment and poverty, as mentioned earlier, there is an increase in food insecurity, and according to the report of the World Food Program (WFO), 36.9% of people are facing food insecurity in Pakistan. Apart from that, the number of homeless people is increasing constantly, for there are nearly twenty million people with no proper homes in Pakistan, and they live in slums and shelters waiting for the mercy of death. Thus, the price hike in Pakistan has caused both food and homes to be insecure.
Last but not least, price hikes have become a serious concern due to their large contribution to promoting psychological issues and suicide rates. Moreover, instead of fighting poverty, the price hike has compelled people towards suicide, clearly observable from the suicide case of Mohammad Masood in Rawalpindi due to his inability to pay a loan worth 13000 rupees initially. According to the inquiry reports, he availed the loan to pay the fees of his children, and the loan slowly and gradually increased due to its high interest rate, but he could not pay the loan because of his low salary and more expenditures, encouraging him towards suicide. Thus, it has been proved with the above-stated implications that price hikes are the worst of all worries in Pakistan.
“To implement better monetary and fiscal policies is to prevail happiness in society.”
What are the possible measures that adoption can counter the price hike in Pakistan?
As every disease needs proper treatment to minimize its drastic impacts, let us explore the proactive and worldwide accepted measures to counter the issue of price hikes in Pakistan. Moreover, the first measure, in this regard, can be the establishment of monetary, such as the adjustment of interest rates, and fiscal policies, like taxation. According to the experts, both have to be increased to counter price hikes in Pakistan. The rise in interest rates and taxation will decrease people’s spending capability overall, decreasing inflationary pressure. Similarly, strengthening supply chains, a practical approach, can also play a vital role in controlling the price hike in Pakistan; however, supply chains can be strengthened through the management of better relationship relationships among the suppliers to ensure the steady and continuous flow of raw materials. Thus, price hikes can be controlled through establishing monetary and fiscal policies and strengthening supply chains.
In the same fashion, price hikes can be controlled through the encouragement of market competition and the provision of assistance and subsidies to the targeted areas. Moreover, with the rise in market competition, there is an increase in the production of multiple products of variable qualities at the same rate, forcing sellers to present better products to consumers. Similarly, the government has to provide assistance and subsidies to the targeted areas in Pakistan, which stabilizes the price of essential goods, enabling the poor society to fulfil the basic necessities of life. Thus, the increase in market competition and the provision of assistance and subsidies to the targeted areas can counter the price hike in Pakistan and decrease the cost of living.
Furthermore, maintaining coordination among government entities, regulatory bodies, and stakeholders can play a major role in controlling price hikes in Pakistan. Moreover, they will not only take timely action against the uncontrolled increase in the price of the products but will also put forward early warning mechanisms to counter the price hike. It will also enable them to monitor the markets effectively and take measures against unfair practices like hoarding. Last but not least, educating consumers regarding their rights and fair pricing policies is a must for the control of price; it will enable the consumers to make a voice and take strict legal actions against the monopolies and the sellers to counter unjustified increases in price. Moreover, it will also enable the consumers to demand quality products in relation to the demanded price. Thus, price hikes can be controlled effectively if the above-stated measures are adopted in time.
Critical Analysis
Upon closer analysis and in-depth analysis, it has become clear that there is no other evil as dangerous as the price hike in Pakistan. Moreover, it has not only raised the cost of living but has also decreased employment opportunities, and it can be predicted from the action of Steel Mills against its employees. However, the problem is the fruit and product of only a few monopolies, including less than five percent of people, and the elite businessmen increasing and decreasing the price of commodities through hoarding all over Pakistan. The price hike can, therefore, not be countered unless each and every member of society, especially the rich, works honestly and adopts certain measures, like the encouragement of monetary and fiscal policies, coupled with the imposition of a ban on illegal acts of hoarding the basic commodities of life.
Conclusion
To draw a final verdict from the facts and figures given above, it is outstandingly clear that the price hike has become the worst of all worries in Pakistan. Moreover, it has not only decreased the rate of business and Foreign Direct Investment but has also positively impacted psychological disorders, pulling the poor of society towards the mercy of death. However, it can be countered through the adoption of certain worldwide accepted measures, such as the formulation of monetary and fiscal policies to strengthen market competition and to provide subsidies to the targeted areas of society.
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