Given the low tax-to-GDP ratio (below 10%), the gap is filled with printing rupees without sovereign guarantees causing its depreciation. But the government transforms this challenge into opportunity by allowing essential goods (which become cheap due to depreciation of our currency) to the foreign markets.
Now the situation is that Pakistan is exporting its essential goods that otherwise would have been not if rupee had not depreciated and these goods have not become cheaper for the foreign consumers. We can’t import such things from nearby markets, for the currency exchange rates are not favorable to us.
After meeting the demand of neighboring and far off markets, whatever essential items (read it pulses, meat etc.) are left with us, they are not enough to cater to our needs. When we compete on resources short in supply, the highest bidders (rich and well off) are favored. Statistics show that the twin cities (Islamabad and Rawalpindi) are slaughtering animals 30% less than the last year, for the prices are high and some sections of the city are using this commodity less than before.
The real culprit behind the price hike is, of course, the fiscal deficit. That the rich contribute less to the national kitty and the government is not serious in taking austerity measures, the purchasing power of the lower and middle income groups is on decline. More people are getting down the poverty line. Regional trade can help but absence of good governance will prevent to reap its benefits.
Poor DCOs and their assistants still have to do their jobs. They have to use the centuries-old methods (which they are known to) of bringing down the prices of essential items though the same are short in supply knowing not that the market is not closed and there is democracy, not dictatorship, in place.
Howthe outrageous retailers and frustrated consumers will react on polling day? This is, actually, a million dollar question. The reason is that politics in Pakistan is seen through the prism of ethnicity and racialism. Democracy only succeeds in a free society, which we are not. If we claim that it is working in Pakistan, the credit goes only to the ill-informed consumers.