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Pakistan's Inflation Rate Rises After Joining U.S.-War On Terror
By Aamir Latif, IOL South Asia correspondent
KARACHI, Feb. 18 (IslamOnline) – The inflation rate in Pakistan -- one of the key allies of United States in its war against “terrorism” -- has surged by 2.30 percent during the last 5 months due to the closure of local industry, cancellation of foreign orders and withdrawal of foreign investment.
The country’s official inflation rate is 6 to 7 percent, but independent sources say it is 10 to 11 percent.
Inflation based on Sensitive Price Indicator (SPI), Consumer Price Index (CPI) and Wholesale Price Index (WPI) during the last five months surged by 2.09 percent, 2.53 percent and 2.53 percent, respectively, over the period 2000-2001.
Official figures released Monday, February 18, by the Federal Bureau of Statistics (FBS), showed inflation increased by 5.35 percent, 4.88 percent and 6.71 percent during 2000-2001 in comparison with the period of 1999-2000.
In 1999-2000, the inflation rate increased by 1.84 percent, 3.37 percent and 1.53 percent, respectively, over the same period of 1998-99, according to figures.
Statistics show that Pakistan’s textile industry, which has been the country’s backbone for the last 54 years, has been badly affected after the September 11 events, after almost all European and Middle East countries; the Unites States, Japan, Canada and other countries cancelled their orders, compelling industrialists to close down a considerable number of textile units.
According to FBS, about 20 million people are directly connected with textile business in Pakistan, especially in Punjab and Sindh provinces. Textile
industry contributes almost 70 percent of the country’s total exports worth 9 billion dollars.
Hundreds of hosiery, weaving and spinning units, providing livelihood to thousands of families, have been shut down all over the country because of lack of orders for at least one year to come even from the U.S.
In Faisalabad, dubbed Manchester of Pakistan and the major hub of textile industry, almost all mills and factories have no orders from abroad at the moment, local industrialists said.
"We have closed down our 3 main hosiery units, besides relieving 2,000 daily wages workers since September 11," said Mian Farooq, the general manager
of a big textile mill told IslamOnline.
Although, he said, the U.S. and European countries had announced an increase in Pakistan’s textile quota, there was nothing on ground. "Practically, we still stand there where we were on September 11," said Farooq. "I see no improvement at least in next couple of years."
"We even are facing in recovery of our outstanding dues against foreign buyers,” said Haji Siddiq, owner of a medium size textile unit in Faisalabad. "We believe that we are not doing a good thing by stripping poor people of their livelihood. But we have no other option. We have no orders, even for local consumption
we are facing difficulties.”
Dr. Shahid Hassan Siddiqui, a renowned economist, told IslamOnline that the inflation rate might go up further as the government itself had confessed
that it would not be able to meet the targets of tax recovery and foreign exports.
"The so-called war against terrorism has severely affected the economic activity in Pakistan,” he said. “The government claims that now Pakistan is the most attractive country for foreign investment, but according to my knowledge, the Swiss government has asked its private sector a few days ago not to go Pakistan as it is not a safe country.”
He said the kidnapping of Wall Street Journal reporter Denial Pearl would also aggravate the situation as regards foreign investment.
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