Monday, 14 October 2013

Wise up on inflation - coping with austerity in Pakistan

It’s time to get smart about austerity. You’ve seen the plunging rupee and headlining inflation figures on the news but more than that you will have felt the pressure on your pocket. Whether you’re a member of the Birkin brigade or a low-paid blue-collar worker, you will be aware that money simply doesn’t stretch as far as it used to.
Cash is tight by the end of the month                                     DESIGN: JAMAL KHURSHID, Express Tribune

I recently came across my accounts diary from 5 years ago and the figures were startling. Actual prices may vary somewhat depending on where in the city you are (Defence will be significantly more expensive than Garden for example) but the trend in prices is the same all over the city.


The Institute for Social Justice, an NGO, has similarly published 5 year retail prices for basic items and their figures tell the same story. Basic foodstuffs like daal, sugar, ghee, flour and rice have doubled or tripled over this period. Fruits and vegetables vary seasonally but the year-on-year trend is the same for these staple foods. Petrol, CNG, electricity and rents have risen likewise.


The government has only just brought inflation down to single digits but for the last five years rocketing prices have been playing havoc with household budgets from Peshawar to Karachi. There are many whose income has kept pace with these price hikes. Several business sectors are doing very well and posting great results. There seems to be plenty of cash floating around the economy. However, the majority of people have seen their ability to save plummet. Cash is tight by the end of the month and little luxuries have been quietly dropped. So what’s the best way to cope in these uncertain times? There are 5 simple steps anyone can take to cope better with rising prices.
1.     Shop smart – look for bargains, shop in bulk for extra savings and be prepared to venture farther afield for better prices.

2.     Eliminate waste – buy only what you need to avoid throwing away food that has spoiled before you get a chance to use it. Use up leftovers in imaginative ways -  think soups, sandwiches & wraps.

3.     Think twice – stop those impulse buys. Go to the shops armed with a shopping list. If you fall in love with a gorgeous pair of shoes, wait a couple of days and take another look through your closet before handing over your hard-earned cash.

4.     Re-think your menus – go veggie a couple of days a week, bulk up on pulses and filling salads - we eat too much meat as it is. Try less expensive restaurants when you eat out – some simpler eateries sometimes offer far superior food to fine dining establishments.

5.     Stop worrying about keeping up with the Jones’. This relative may have spent hundreds of thousands on his sons wedding. That friend may have bought a new car but there’s no reason for you to even if you can afford it. Ostentatious spending is even more short sighted and unnecessary in inflationary times than it is at the best of times.
Finally, raise your staff’s salaries in line with inflation or maybe even a little more if you can afford it – yes, actually increase your expenditure. If you’re feeling the pinch, chances are members of your staff are doing without some essentials unless you’ve raised their salaries. Give increments every year as a matter of course, in line with inflation and then some. For the upper middle class and above it barely means one less jora or eating out less every month. If you’re lower down on the economic ladder, remember no matter how low your own income, the people you employ are earning significantly less than you are. Every rupee on the price of flour and ghee and other basics makes it more difficult for them to feed their families. You may pay well, you may cover medical and educational expenses, you may be a model employer but increments are vital to help maintain quality of life. Your neighbours and relatives may get away with paying less but perhaps this is an area where ethics not market forces should rule your decisions.

Published in the Express Tribune on 13th October 2013

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