Friday, August 6, 2010

Sugar problem:People vs Elite?

Sugar pr0blem is poised to emerge again.Ramzan ,the fasting month,is approaching.Today newspapers reported sugar prices crossing the mark of Rs.70 per Kg.Sugar in the previous months have been sold at Rs.100 +.And it was not available at all under Supreme court edict and Governments somewhat lame crack-down on sugar mills ,traders and other hoarders.Sugar is an essential food item and more for the poor,whose staple diet is bread(Roti),onions and tea.Sugar is a great source of energy and enthusiasm for the poor workers.Why does the government and Supreme court could not do much to address the problem?

I have not personally investigated the problem but keep reading about various aspects of the problem.The major argument is that one cannot fight market and the greed.When prices are high in international market , and domestic controlled prices too low,either price control would be defied ,or hoarding and smuggling would take place.Government can do very little about it,it is argued.But do consumers get the benefit,when international prices are low.Consumers can get benefit if it imports the foreign sugar at the right time and in right quantities which it somehow fails to do.Sugar mafia somehow manges to put a hammer in the process and contentious debates ensue as to who was responsible.

There is a simple answer,may be a little too facile,but still reasonable and defend-able;sugar mills are owned by the political and even military elite.In the days of General ZiaulHaque , there was a Parchi system under which most politically desirable and powerful politicians were given loans by the DFIs and banks.One parchi for banks and another for HMc and KSEW who mostly supplied the machinery and installed the plants.The beneficiaries were mostly the right wingers and todays principled politicians of PML(N) and not very principled PML(Q) leaders, who were together in those days.A whole new political class was developed and strengthened in the country to support the military general.Then came PPP government of 1988 which repeated the sugar mill parchi syndrome with a vengeance.Mr. Zardari and his associates benefited this time to complete the circle. As a result a sector developed which predominantly is owned by the political elite,who rule the country .Whether democracy reigns or dictatorship ,one powerful group defending the private interests of the sector is always there.Opposition also has its representation in sugar mafia.So it is people vs elite.And they say jo maza haram kamane main hay wo halal main kahan and who says it is haram?

Those who are older like me would remember the famous Ration Shops in General Ayubs period.Every Mohollah used to have a ration shop and every family used to have a ration card which also used to double as an identity card in those days when NADRA and NIC were not there.In those days of no computers,families and there ration shops were registered with nearby ration shops which supplied ATA(flour) and sugar for fifteen days of a family quota defined by the government.I remember going to these shops regularly fortnightly and get the ration,on payment and not free,as some may be akin to dream?This was a stable system and worked well without computers to keep a tab on misuse.No big scandal was reported ,although in such regulatory and control system some misuse is expected.The ration shops were in private sector and worked under government license.Today a near equivalent of Ratio shops is the Utility store owned by the government but no ration cards and fixed quotas. As a result Utility store sells to the hoarders and every body else till the supplies lasts and most deserving consumers do not benefit from the concessionary rates.

It is time to revive ration shops and ration cards and include utility stores in the system as well.Poverty and food items pricing and scarcity issues are not expected to go away.I have discussed tis issue in my book:Pakistan's development challenges as well.

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