The Inflation Controversy
By Dr Zafar Altaf

I AM not a very television person because I think one is better off if one is not looking at the idiot box. The only area I have willingly seen is when there is a good game of cricket on the box. I almost invariably shut the voice out and live with the pictures.

It is when I am a captive viewer at another’s house that politeness forces me to keep quiet. It might come as a surprise for viewers to hear that for the first time I saw and heard capital talk in one of the programs. Captive as I was I listened to what were essentially a non-talk and the guest-Dr. Salman Shah and Dr. Zubair. Both I know in varying degrees.

The problem with Dr. Salman Shah is that he has been in bad company for a long time and as advisor to the Finance Ministry he has acquired the ills of what ever happens in Washington DC. Dr. Zubair I respect for he has never tried to bull his way through and he is a very sound economist which is more than what one can say about the other gentleman.

Life for Salman was not bad when he had his ears and eyes open while at Zabist. Even with the Punjab Government he still had his wits about him. He was too my mind left of center but Kharboza ko dek key kharboza rung pakartha hai and the stint at Finance has left him extreme right of extreme right. We know that such persons are blind, deaf and dumb.

They do not listen and do not assimilate any thing. I have always been an advocate of doing my thing in Pakistan. The compares as all compares are surreptitiously involved with the government and therefore the government representative is always helped by either shifting the question or shifting the argument.

The argument on inflation and agflation has to be dealt with in two distinct ways. First inflation in general is also dependent on the macro framework and that macro framework is ridded with contradictions.

Let us look at the FDI that Shah was so eloquent about. This has been in the IT system or in the service sector and they have already taken away their investment through repatriation of profits. These two sectors are also the exploitative sectors besides the oil prospecting sector.

Not a single investment has come in manufacturing or where there has been any technology transfer. Yes we have sold our banks and we have allowed our silver to the Agha Khanees and the Mid East individuals that have siphoned off the majority of our assets. The land scams and the Stock exchange scandals are indicative of what has happened to us.

I am not bothered with what is happening in India and China for I happen to live in Pakistan and for all I am concerned they can go up the creek that they can find. India as an example is not well founded and the statement that Atta there is selling for 22 rupees per kilo is false and perpetual so. They have managed their economic systems as they saw fit and good luck to them. There is no need for magistrates but the whole gambit is false.

Wheat production is not what the government keeps on saying. In fact my visits to the surplus districts indicated that the top panicles of the plant did not have any seed filing for a variety of reason but the most compelling ones were the lack of availability of good seed and the fact that the seed had broken down [Open pollinated generally do so after five to six years]. Sind, NWFP and Baluchistan are minor players but the massive rains followed by high temperatures had a terrible affect on productivity.

The total production was not more than 17 to 18 million tons. Had they followed my advice in April they would have been able to buy this wheat from the world markets at less than 200 dollars per ton and now they will get third rate quality at over 500 dollars per ton. Who is responsible? India imported wheat at $375 per ton.

So if you are an India watcher and have done so to justify your doings how about the opportunity cost that you will have to explain, a loss of $ 300 per ton. How goeth it? Justify? Keep on rationalizing. Keep on giving misinformation about hoarders and bad doers.

There isn’t enough wheat to go around. You will import more and you will import even more than what you have conceived at the moment and it will be at a higher cost. Ever heard of forward contracts? Ever done any hedging?

Does Mr. Shah understand that printing money to cover the remittances by itself can be and is inflationary? The rupees cover means that the money supply goes through the roof. If macro figures were so good what about the increase in foreign debt and the figure of 16 billion dollars in FE is a red herring because trade is not getting to you the currency that you so seriously want?

The fact is that with money coming in from USA we have become the prodigal son and waste is our way of life. The road structure that the CDA has built in Islamabad is an indication of egoism that is so prevalent in the governance of this country that the janitors have brought in. They have swept everything clean.

The Seventh Avenue cost for 5 kilometers is Rs.900 million. That is some road going fro nowhere to nowhere. Go through the cost structure in CDA and whatever they have done over and over again smacks of wastage and wasteful spending with limited benefits.

The constitutional avenue should be renamed as Non-constitutional Avenue and the cost of the annual plantations determined. It is silly what is happening but the ministers and advisors of this government, no better than tadpoles, will keep on vigorously wag their tails and keep on doing things that they have nothing to do with.

That is not their responsibility but they have the ability to say what they have o. Pads have been created for the pleasures of the powerful. What will happen when the pleasures of the powerful come to an end as end it must?

The BOP is in stress and the employment figures have been fudged. I do not see the job creation and in fact I see the young are frustrated. Yes there is a lot of self employed-11.1 million of them and these are the ones that have created hawkers to abound. Beggars are a good indication of what is happening in the system.

If you look at the proxies of this country you would understand what has happened. Figures propounded by Shah are only for illumination and not for support. If these are used for support then we have every right to contest these figures. There are statistics, lies and damned lies in statistics.

If you take the stand that the present government has done nothing wrong then I will have to pretend that I did not see the advertisements on TV and the press-full page and colored crying out Salaam Pakistan. Rather early this Salam Pakistan? The misallocation of resources is such and the lies perpetuated are such that it will be impossible to govern this country.

The problem is with the compares for either by default or for lack of time or for lack of ability they have allowed these ministers to get away with murder and lies. Keep on, lagae raho. The end will be terrible as end it must. The perversions of this world will haunt you for I cannot believe that these ministers do not have sensitive hides.

The controversy rages on irrespective of the details the entire nation has been held to ransom by the Ruet-i-hilal committee.

Come on. There are serious works to do and the decision having been given we should all honor it. Will we or will we have many Eids and be helpless about it. Carry on Jeeves that are in the government. You have done a good job of belittling the people of Pakistan.●

© 2007 Dr Zafar Altaf