Pakistani traders strike vs high inflation

ISLAMABAD: Pakistani traders on Saturday went on strike against the soaring cost of living, including higher fuel and utility bills and record depreciation of the rupee against the dollar, which has led to widespread discontent among the public.

The traders pulled their shutters down across the country, while protesters burned tires on roads to express their anger.

The strike was called by ex-senator Sirajul Haq, who heads the religious political party Jamaat-e-Islami, and it was largely endorsed by trade and business bodies, market associations, lawyers associations, and transporters.

The country’s commercial and economic hub, Karachi, was almost completely closed and vehicle traffic was thin on roads, with all markets and shopping centers closed.

“We have shut our shops in protest so that our message reaches the ruling class. If they don’t consider our problems, we will devise further strategies, said Fahad Ahmed, a trader in Karachi, adding “If you pay Rs100,000 ($330) in rent for your shop and you have to pay an equal amount in electricity bill, how can you survive?”

In the eastern city of Lahore, the capital of Punjab province, all the main markets were closed for the day, lawyers remained out of courts and intercity and local public transport were not operating. The northwestern city of Peshawar and southwestern city of Quetta were partially closed.

Pakistan’s annual inflation rate was 27.4 percent in August, according to data released by the state-run Bureau of Statistics.

Pakistan was on the verge of default before securing a lifeline deal with the International Monetary Fund. As part of the conditions for the bailout package, Pakistan was required to reduce subsidies that had been in place to cushion the impact of rising living costs. This likely contributed to the increase in prices, especially energy costs.

Mohammad Sohail, a prominent economist and head of Topline Securities, said that in spite of the IMF program Pakistan is going through a challenging time.

He said the government is trying to implement the painful IMF-dictated reforms while political polarization is affecting sentiments.

“Inflation is a big problem for common Pakistanis. And this inflation is mainly led by the falling rupee. Strict stabilization measures with improving foreign exchange reserves can stabilize the currency and inflation going forward,” said Sohail.

The value of the Pakistani rupee has significantly depreciated against the dollar, crossing a historic threshold of 300 rupees to the dollar. Exchange rate depreciation has led to higher import costs which in turn can contribute to inflation.

Jamal Uddin, a shopkeeper who was participating in a protest rally in Dera Ghazi Khan, said he and other traders were keeping their businesses shut in protest as simply it was not any more possible for them to feed their families.

Shamim Bibi, a widow and mother of three in Multan, said her daughters had to quit school and her young son went to run a food stall to meet the daily needs of the family. “But now our life is miserable due to extremely inflated electricity bills, high fuel and food prices and increasing house rent,” she said.

The caretaker prime minister Anwaarul Haq Kakar, however, downplayed the significance of the protests, referring to the complaints as a “nonissue.”