EDITORIAL : THE DAWN, PAKISTAN

Petrol price increase

AN oil price hike is not something anyone likes to see. It puts economic growth at risk, and Pakistani consumers are already hurting from inflation that has reduced their ability to spend on food, transportation and utilities, let alone health and education. So Thursday’s announcement that petroleum prices are being raised by up to 13 per cent comes as distressing news. But the fact is that the government had no choice; given significant increases in international oil prices, exacerbated by tensions in the Middle East, it lost Rs35bn by keeping domestic prices stable from December through February and in March by limiting the increase to five per cent. Continuing to fund the difference would increase public debt and worsen the fiscal deficit. It would also further complicate negotiations with the IMF, which has demanded the removal of subsidies.

But external factors do not bear sole responsibility for this painful adjustment. Mismanagement of the economy as a whole has created a situation in which the government cannot afford to protect its citizens from higher fuel prices. Tax collection remains at unacceptably low levels, and certain large sectors of the economy enjoy concessions due to lobbying and political interests. Public-sector enterprises continue to eat up billions. Ever so often the power sector’s ongoing circular debt problem requires an injection of government funds. This administration and previous ones have also failed to adopt long-term, forward-thinking measures to reduce our dependence on fuel, such as improving mass transit, shifting reliance from road-based to railway transport and increasing power generation from resources other than furnace oil. Meanwhile, hedging strategies to reduce our exposure to global oil price fluctuations have been suggested but not implemented, and a redesign of the oil-pricing formula to reduce the profits of oil refineries and dealers still remains under review. Regardless of external factors, Pakistan might have been able to reduce the impact on citizens if the economy had been handled better as a whole.

That said, what will not help at this point is a political reaction with little regard for economic realities. Political parties will be tempted to milk the price increase for popular support, such as in January, when the MQM’s intransigence led to the withdrawal of a proposed price hike. For the last few months, the government has reportedly been making an effort to educate both coalition and opposition parties on the need for raising petrol prices. One hopes this has laid the ground for cooperation on the economy rather than political attacks that will only hamper the government’s moves to improve the economic situation.

Rights of tenants

THE issue of Punjab’s landless tenants is in the headlines again. On Monday, the Anjuman Mazareen Punjab organised a march to Lahore to press for ownership of the land the tenants have been cultivating for over a century. The marchers’ route was blocked at Khanewal, and the police, which had made the highway impassable by placing containers across it, resorted to unnecessary force. Cases were registered against scores of tenants under the anti-terrorism act, prompting the Human Rights Commission of Pakistan to issue a statement of concern on Wednesday. The following day, the police said that the demonstrators would not be released, adding that only 29 individuals had been arrested. Reportedly, an attempted dialogue on Thursday between the tenants and the local administration failed. The protesters have set up hunger strike camps in seven villages, and the AMP has accused the Punjab government of intending to hand over portions of the land at the centre of the conflict to multinational companies and Gulf-based enterprises.

The use of force is unlikely to achieve much; we cannot expect the matter to die down quietly. Over the years the issue has cropped up time and again, with the Punjab government doing little other than making empty promises. In 2000, protests were launched across the province to counter the government’s attempt to change the tenants’ status by putting them down as ‘contractors’ in the revenue records. It is time that the administration took concrete steps to address the tenants’ one-point agenda of ownership rights. At stake are nearly 70,000 acres of state land in 10 Punjab districts that has been cultivated by tenants since 1905. Some of the land has already been taken over as military-owned dairy farms and for agricultural research. The provincial government and the military have continually overlooked the rights of the tenants, and as the 2000 move and the police violence on Monday show, have at times acted directly against the tenants’ welfare. The interests of the province and the military must be balanced against the tenants’ rights and the injustice they have long suffered.

Extortion racket

THE fact that traders blocked Karachi’s arterial M.A. Jinnah Road to protest against rising incidents of extortion on Thursday shows that the menace is getting out of control. The protest was sparked by a recent incident in which a trader was shot and wounded while resisting extortionists. Some suspect that the recent Empress Market blaze was also ‘punishment’ for resisting extortion demands. Backed by the city’s chamber of commerce, traders say they will observe a strike on April 5 unless corrective measures are taken. The business community has asked why the police have failed to nab suspects, especially when alleged criminals use cellphones to issue their threats, along with leaving their phone numbers on extortion notes. The situation has caught the attention of the presidency. But issuing statements and sending in the interior minister to rectify the situation is no solution; there needs to be visible action.

Protection rackets exist all over the world, often being run under the nose of the police. In Karachi, extortion is a well-organised affair, with many suspecting that the city’s main political parties are complicit in the racket. Criminals may well be using the parties’ names, but since none of the parties have taken a forceful stand against extortion the impression that politicians may be patronising criminal elements is strengthened. The city’s political stakeholders have the key to controlling the menace of extortion. The politicians must realise that by supporting criminals, they are punishing Karachi’s citizens. With high inflation and a climate hardly suitable for investment, the state and Karachi’s political players are not doing the city any favour by failing to act against extortionists. Last month, a suspected extortionist was lynched in Kharadar; the state must understand that if it continues to remain a spectator, this is the way in which the public will deal with the problem.