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Pakistan is
facing a number of constraints in the path of social economic and
political development. One of them is the ever-increasing
inflationary pressure on the general public. This inflationary
pressure created a social instability and misconception among the
messes towards the Government. General public considers the
government responsible for this inflation. Government gave the blunt
gift of inflation, unemployment, terrorism and energy crisis to the
public. The government offended the masses. Some economists argue
that such type of increase in prices was never seen before the
regime of Musharaf. The prices of essential domestic commodities
have touched the psychological boundaries. The fixed income
employees and creditors are affected by this inflation.
During five years the prices of red chilli increased by 62.7%, flour
66.2% vegetable oil 120% sugar 30.9% rice 69.9% and other essential
domestic commodities like vegetables, chicken etc also showed
increasing trend of prices. According to official reports the
inflation rate is 7.2% and according to non-official reports like UN
8.6% World Bank 8.9% and Asian Development Bank 9.1%. This
inflationary pressure has psychologically affected the employees and
employers. Some renounced economists argue that the reason of this
increasing inflation rate is the standard year 2001 according to
which inflation rate is measured. In 2001 the foreign aid was given
to Pakistan therefore low standards were made to measure the
inflation rate. Although the increasing trend in the prices of fuel
and other things in the international market is another factor but
the standard year is also a factor.
Not only these factors caused hyperinflation but also energy crisis
played a vital role in this hyper change in the prices of daily use
domestic and capital commodities.
There are three main resources used to fulfil the energy
requirements Electricity, Fuel and Gas. Despite having the treasure
of natural energy resources,
Pakistan’s
energy production plants are not fulfilling the country’s
requirements effectively. The present energy crisis is affecting the
economy entirely. Industrial and daily life has paralysed by this
energy crisis. WAPDA is just fulfilling the country’s energy need
near to 46% the remaining is fulfilled by the alternative expensive
resources. The energy crisis created cost pull inflation in the
country, as electricity is the key material for any production
plant. There is a general observation of 5-10 hours of load
shedding, but some times it hits the level of 18 hours. Even the
industrial capital of Pakistan (Karachi) is suffering from the same
situation.
Why in the era of energy reservation Pakistan is not utilizing its
energy resources?
Pakistan
is just relaying on the electricity production by Dams. But Pakistan
has not enough dams or water to generate electricity. Although
WAPADA is enjoying the monopoly but government has to pay 2
rupee/unit as incentive. Our neighbouring country India has built a
number of Dams to overcome the energy crisis but Pakistan government
has paid no heed on this issue. Many projects are delayed due to
provincialism the glaring example is of Kala Bagh Dam. The costly
machinery amounted US $9 million is now functionless due to (rust)
delay in the construction of Kala Bagh Dam, Some scientists
predicted that in next 10year world has to face the water shortage
also.
If the government fails to construct dams for the generation of
electricity due to Provincialism government should have to adopt
alternative options to accomplish the energy needs of the country.
As Iran has large treasure of natural energy resources like natural
gas and fuel, despite this Iran is engaged in the attainment of
nuclear power generation plant. Pakistan, despite being an atomic
power does not think about the nuclear electric generation plant.
International community is imposing sanctions on Iran due to uranium
enrichment but Iran pays no heed to them. Then why is the Pakistani
government reluctant to use its nuclear plants to tackle energy
crisis?
Secondly,
Pakistan’s
western area especially Thar is enriched by natural coal, which is
the fifth largest treasure of the world. Pakistan has signed a
contract with China to generate 300 Mega watts by coal deposits in
2003, but due to some reasons it has not been completed till now.
Industrialists due to high prices of electricity use alternative
resources (petrol) in electric generators to fulfil their energy
needs but, the fuel (petrol) prices in international market cross
the psychological limits of US $110/beryl recently. The high prices
of fuel and electricity created a long-term cost pull inflation
(increase in the prices of raw material of one commodity cause high
prices of other commodities).
There are a lot of expectations with the new government as Nawaz
Sharif pledged that if he came in rule he will fix the prices of
domestic commodities like vegetables oil, floor, sugar and rice for
two years. Now the new government should take basic steps to
eradicate inflation. I think energy crisis is the real cause of this
inflationary pressure. We are hopeful that new government will take
some positive steps to fulfil its promises and public expectations.
Ref link:
http://www.nation.com.pk/daily/mar-2008/31/bnews8.php |
