A sugary mess | Pakistan Today

A sugary mess

Once again, the man in the street is in the grip of a sugar crisis. What is more, he finds himself in a helpless condition. This time the courts did not interfere as the fixing of the sugar price by the Lahore High Court last year had led to the commodity disappearing from the market altogether. There have been no raids on those holding back stocks either for similar reasons. After threats from PSMA last year to close down industry if coercive methods were used to lower the price, every institutional defender of the rights of the common man has kept mum while prices continue to skyrocket.

The profits earned by the sugar barons and hoarders are phenomenal. A banner headline story in an Urdu national daily on Wednesday claimed that the sugar mafia is minting Rs 600 million per day by artificially raising the prices. Rs 18 billion in super profits had reportedly been pocketed in just one month.

A newspaper report tells that the TCP was refused funds for import of sugar by the Finance Ministry when the international price was around 18 cents per pound and agreed to release them only when it had risen to a staggering 33 cents. The import would not have cost more than Rs 55 per kilogramme, but now it is Rs90. Whatever the explanation, the step has helped the sugar mafia at the cost of the common man

What the TCP did last year indicates the state controlled organisation too is part of the problem. In 2009, it continued to delay the imports for months till the ground was prepared for the sugar lobby to raise prices. Finally when sugar was imported, Transparency International Pakistan charged the TCP of adding corrupt and fraudulent amendments in sugar import tenders to benefit one particular party in Dubai. The imported sugar too had, consequently, a high price.

What is conceded by all players is that the price of Rs 130 per kilo is exorbitant. They only differ on who is actually responsible. The sugar mill owners blame mismanagement on the part of the TCP. The Competition Commission of Pakistan (CCP) says the hoarders are responsible. So does Mian Nawaz Sharif who is himself a sugar mill owner. Nearer to the truth is perhaps the stand taken by The Network for Consumer Protection which holds collusive practices on the part of sugar barons, racketeers and administration to be the real cause.

The industrialists set up factories with loans taken from the banks. Those with political clout get them subsequently waived. According to a statement by Finance Minister Naveed Qamar in the National Assembly on Monday, a total of Rs 59.94 billion was written off during accounting years 1999-2007 alone. The textile industry and sugar mills owners were amongst the foremost beneficiaries.

The industrialists squeeze super profits by paying low wages to the workers which they maintain are to be determined by the market in Pakistan but they insist on charging the prices of the goods produced by them like sugar and cement in line with the rates prevailing in the international markets. The commodity would be smuggled out otherwise, we are told. Many think the smuggling takes pace through a nexus between the industrialists, hoarders, smugglers and those guarding the national frontiers, with everyone having a share in the pie. The super profits earned in Pakistan do not trickle down but are taken abroad where these are either deposited in banks or invested in industrial or business enterprises providing jobs to foreigners and taxes to their respective governments. All this, at the expense of the common man.

While landlords and industrial barons avoid paying taxes in full, the ruling elite safeguarding their interests remains addicted to wasteful expenditure. The economy therefore soon faces a crisis. As a rule of thumb, the government takes recourse to the IMF which could be avoided it if the elite was to agree to bring back the money collected through business malpractices or through sheer robbery called bank loan write offs and neatly deposited abroad. But as many of those involved are senior politicians from all the mainstream parties, they are not required to do this. With the IMF come crippling conditionalities that increase the sufferings of the common man and add to the already big reservoir of poverty.

Where are the law enforcers and the regulatory mechanism? It is an unbridled free market that would not allow any regulatory mechanism to function or law enforcement agency to punish those indulging in collusive manipulation of prices.

The media reports the existence of cartels and the common man suffers from their malpractices but none can stop them from the malpractices. There are legal hitches. Anti-cartel laws are designed to suit the manipulators who, as stake holders, play a decisive role in their formulation. In April this year, the Senate Standing Committee on Finance decided not to approve the Competition Commission Ordinance 2009 till necessary amendments were made to make it acceptable to those who mattered.

Sad, but thats how life is, somebody whispers in my year.

Wait till the markets start acting in a perfect environment, says another.

The people of Pakistan have waited for over six decades to be rid of hoarding and black-marketing. It might take many more decades or even a century for the perfect environment to be created. Will the people continue to wait, or mediate doing something else?

The writer is a former academic and a political analyst.