Pakistan roiled by flour and electricity shortages, food price rises.
By: Vilani Peiris and Keith Jones
21 Januar, 2008

Pakistan’s US-backed military dictatorship has mobilized
more than six thousand paramilitary troops to guard flour mills
and distribution points and escort supply-trucks, as it seeks
to staunch a flour shortage that has resulted in breadlines and
spiraling prices.

Rangers and Frontier Constabulary were ordered into action
by the newly created Federal Food Committee (FCC) on Sunday, January
13. In the preceding days there had been long lines of angry people
outside government food distribution centers who had to be turned
away empty-handed and several instances of anti-government protests.

State-subsidized flour, when available, sells for between and
14 and 18 Pakistani rupees per kilogram, but the price on the
open market more than doubled at the beginning of January, reaching
60 rupees in some areas.

Roughly the equivalent of $US1, 60 rupees is the average wage
of a day laborer in Pakistan. Three-quarters of Pakistan’s
160 million people live on less than $2 per day.

The price spike has aggravated the suffering of millions whose
daily incomes have already been taxed by rising food prices. Food
prices have risen by more than 10 percent in each of the last
three years, including a 14 percent hike in 2007.

The government has blamed the flour shortage on the riots that
erupted across the country in response to the December 27 assassination
of Pakistan People’s Party (PPP) leader and former Prime
Minister Benazir Bhutto. The government and the Bush administration
have rushed to pin Bhutto’s murder on Islamic extremists,
conveniently ignoring the Pakistani military’s longstanding
sponsorship of, and intimate ties to, various Islamicist militias,
including the Taliban, and its decades-long hostility toward the
PPP.

The majority of Pakistanis, however, believe that sections
of the military-intelligence apparatus and/or their allies were
the real authors Bhutto’s death.

A Gallup Pakistan poll, based on interviews with 1300 people
and released last week, found that 23 percent of Pakistanis believe
the military and its agencies were behind Bhutto’s assassination,
25 percent suspect political allies of the government, and 12
percent blame the US. Just 17 percent of those polled believe
the Taliban or al-Qaeda were responsible.

The government claims that massive amounts of grain and flour
were stolen during the riots, especially in Bhutto’s native
province of Sind. Opposition politicians charge that the government
estimate is grossly inflated.

At the very most, the anti-government riots brought to a head
a developing crisis.

Early in 2007 the government took the decision to allow the
export of half a million tons of wheat, but subsequently Pakistan
found itself short of grain and to make up the shortfall imported
wheat from Russia and Australia at a 70 percent higher price.

Says PPP spokesman Farhatullah Khan Barbar, “Either the
claims of a bumper crop [made in early 2007] were false and designed
to justify wheat exports when exports should not have been permitted
or, if the claims were correct, the wheat stock has been hoarded
somewhere and the current crisis is artificial.”

Significant amounts of wheat and flour have reportedly been
smuggled from Pakistan into Afghanistan and India, where they
have been able to command higher prices.

In 2004, in keeping with its neo-liberal economic agenda, the
government relaxed controls on the shipment of wheat across provincial
boundaries—controls that had been introduced to thwart hoarding
and price manipulation.

Speaking to the press at the beginning of last week, the FCC’s
chairman, retired Lieutenant-General Farooq Ahmed Khan, said his
concern was increasing supplies, not ferreting out hoarders: “I
am not responsible for who did what in the past. I am here to
improve the situation through supplies and bring down prices.”

In retaliation for an FCC-directed campaign to stop flour and
wheat from entering Afghanistan, Afghanistan closed its border-crossing
with Pakistan at Chaman on January 15 and only reopened it the
next day. The US-installed government in Kabul has denied it ordered
the shutdown, which held up oil shipments bound for NATO forces
in Afghanistan. It says the closure was imposed on border officials
by local warlords and smugglers.

The flour crisis is also bound up with an even larger problem—Pakistan’s
chronic power shortage.

A major reason for the lack of flour was that flour mills had
been forced to curtail their operations due to power-cuts.

Acting on FCC orders, the Ministry of Water and Power announced
in the middle of last week that it had taken steps so as to ensure
that 90 percent of the country’s flour mills were receiving
at least 19 hours of electricity per day.

But large sections of the economy continue to be crippled by
the power crisis.

Pakistan’s power system has long been plagued by cuts
and brownouts. The government claimed that privatization would
attract new investment, but the sell-off of the Karachi Electric
Supply Corporation has resulted in higher prices and continuing,
if not worsening, power cuts.

In an attempt to balance power generation and demand, the Water
and Power Development Authority announced a four-hour daily cut
in service in December. This was doubled to eight hours after
the late December riots disrupted the distribution of oil and
natural gas.

In early January, the government ordered all the country’s
steel smelting units and many steel re-rolling units shut down
for two weeks, leading the steelmakers to put thousands of workers
on temporary layoffs.

Textile mills have also been instructed to close operations
for five hours in the evening to conserve power.

According to an article in yesterday’s Dawn,
thousands of workers in Sailkot’s surgical instruments
manufacturing industry have been laid off because of the combined
impact of the electricity cuts and problems in the supply of natural
gas from Baluchistan.

In mid-December, the same newspaper reported that more than
a hundred textile mills had closed down for want of gas.

The Musharraf regime has repeatedly been lauded by the Bush
administration and such mouthpieces of international capital as
the Economist magazine for its right-wing economic program
of deregulation, privatization, and anti-workers laws. Over the
past five years Pakistan’s economy has grown at an annual
rate of more than 7 percent, as foreign and expatriate Pakistani
capital have sought to exploit new profit-making opportunities
and Pakistan’s abundant cheap labor and as the officers corps
has gorged on a steady stream of US aid money.

But Pakistan’s economy faces mounting problems due to
its massive dependence on oil imports, dilapidated physical infrastructure,
and lack of investment in education and health care. Moreover,
the expansion of recent years has been associated with increased
social inequality, in a country already marked by great extremes
of wealth and poverty, and increased economic insecurity.

The IMF recently warned that Pakistan’s economic growth
will slow in 2008 and expressed concerns about the country’s
burgeoning current accounts and trade deficits. During the first
half of the current financial year, which began last July 1, Pakistan
recorded a trade deficit of $8.24 billion.

There have been repeated warnings from the government that
unpopular measures, including hiking gasoline and kerosene prices
to international levels, will be required in the coming year.

The State Bank has warned of “renewed macroeconomic complications
... if prompt action is not taken to correct the drift in fiscal
indicators.” But the government is trying to delay the oil
price increases and other dramatic measures, for fear they will
further unbalance the regime.

In a foretaste of what is to come, Islamabad signaled earlier
this month that it is cutting the country’s development budget
by 15 percent, or 80 billion rupees.

The PPP and the Pakistan Muslim League (Nawaz), the principal
opposition parties, are acutely aware of Pakistan’s mounting
economic problems and especially of the profound popular anger
over price rises, unemployment and the lack of public services.
This has only made the bourgeois opposition, its leaders’
bombast notwithstanding, all the more determined to prevent any
mass popular agitation against the Musharraf regime. They fear
that a mass challenge to the dictatorship could escape their control
and give rise to a movement that couples demands for the scrapping
of military rule and the breaking of Pakistan’s subservient
military alliance with Washington with calls for radical socio-economic
measures to provide jobs and a decent income for all.

Instead Sharif, himself the scion of a prominent family of
industrialists and a former political protégé of
the military, and Bhutto’s dynastic successor, her husband
Asaf Ali Zardari, continue to appeal to Washington and London
for support—no matter that the Bush administration and its
British allies have demonstrated time and again that they are
determined to see a military-dominated government in the saddle
in Islamabad, the better to pursue their predatory interests in
the region.

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