Politics on Inflation

The unpredicted and unwelcome return of rapid price increases has reshaped the political landscape with stark consequences for the PDM agenda. The Pakistani people now believe that inflation is the most important issue facing the economy and the country, and they don’t think that this current coalition government is paying attention to it. This explains why so many Pakistanis disapprove of PM Shahbaz’s economic performance—and why it is undermining his 11 parties coalition government.
Inflation is always and everything a monetary phenomenon resulting from, and accompanied by a rise in the quantity of money relative to output. Inflation has plunged countries into long periods of instability. Politicians have won elections with promises to combat inflation, only to lose power after failing to do so. Inflation was even declared Public Enemy No. 1 in the United States—by President Gerald Ford in 1974. Inflation is associated with more than just economics and electability. It is also linked to political instability. The historical record contains many cases where inflation went hand in hand with major political realignments, coups and even bloody revolutions. This history is worth keeping in mind as countries throughout the world grapple with spiraling prices.
In Pakistan, all the political parties have been using ‘Inflation’ as their political campaign. During previous government, the opposition of that time, PDM started political activities against Imran Khan’s government. They held Mahngai Mukao March, Cycle March, Tractor March to protect against inflation and to dethrone PTI government. Moreover, No confidence motion was brought out against Mr. Khan and he was ousted successfully.
When Shahbaz Sharif of Pakistan Democratic Movement (11 parties coalition) takes over the chair, the biggest challenge before him was to deal with rising inflation. Moreover, It was also PDM’s campaign against previous government. But after coming into power, the Coalition government did contrary to what it had promised to the people for reducing the inflation rate and petroleum products prices. PDM government increased patrol prices up to 84 per liter that had once held couple of Mengai Marches in month of march before ousting PTI government in the Centre.
After the couple of price hikes, coalition government then blamed the PTI government had fixed the petrol and diesel prices in violation of its promise with the International Monetary Fund (IMF) and now Pakistan could not receive the IMF loan without increasing the prices of petroleum products. In March 2022, the former PTI government gave a Rs38 billion subsidy on fuel, whereas, it planned to purchase oil from Russia at 30 per cent less price as compared to the global market. It may be noted here that India is already purchasing oil from Russia at a lower price.
Due to the increase in the petroleum prices, the inflation rate measured by the Sensitive Price Index (SPI) in Pakistan increased by 3.38 per cent in comparison to the previous week.
After Finance Minister Miftah Ismail made the announcement to increase the fuel prices on Wednesday, saying that the move is to reduce the fiscal deficit and revive loan support from the International Monetary Fund (IMF), protest rallies and dharnas were carried out in parts of Sindh, resenting the hike in fuel prices.
The protestors said a rise in petrol price will only lead to steeper inflation making the life of lower strata people more miserable. The protestors also threatened to intensify the stir if measures were not taken to control this spiralling inflation.The prices of high-speed diesel (HSD), petrol, kerosene, and light diesel oil (LDO) have gone up by a massive 83pc, 56pc, 73pc, and 68.4pc respectively, since May 26.
SYED TAHIR RASHDI
SHAHDADPUR