Who will bill the cat?

Written by The Frontier Post

Advisor to the Prime Minister on Accountability and Interior Mirza Shazad Akbar has written a letter to Governor State Bank of Pakistan (SBP), Chairman Competitive Commission (CCP) and Chief Secretaries of Punjab, Sindh and Khyber Pukhtunkhwa to take action against the sugar cartel in their respective domains in the light of Sugar Inquiry Commission Report. Federal government has sought clarification from CCP for delay in action against this cartel. Moreover, Federal Board of Revenue will investigate matters pertaining to dubious transactions by sugar mills’ owners and massive tax evasions.

Prime Minister used to say that conflict of interest has corrupted the political system of country, which is responsible for the concentration of national resources in few hands. He had made a promise to for doing legislation to separate business from politics. However, preference for the electable in 2018m elections made necessary to compromise this loud stance.

 The stakeholders of cartels had enjoyed dominance in the legislative and executive branches of the state during the governments of other two mainstream political parties and even in PTI. Grant of subsidy on the export of sugar and wheat had been routine affair in the previous two governments and the present government has also given it.

Despite the repeated advice of the multilateral donor agencies neither the previous governments budged an inch to give financial autonomy to central bank nor does the present government want to make the bank autonomous in decisions regarding the country’s monetary policy. The role of the central bank is limited and cannot  take any decisive action against the recovery of defaulted loans from the sugar mill owners. Loans acquired under political clout have always been written off by the influential political and business elite.

The CCP is toothless and its promised reorganization has not been done. The commission is unable to ensure fair competition in the commodity market within its current mandate.

The FBR will conduct the audit of production and sales of sugar mills, dig out tax evasion and even initiate legal action. But millers can drag cases in law courts for years by hiring high paid lawyers. The delays in adjudication of tax cases have occurred in the past and will happen in future as well. The administrative actions do produce some positive results in over pricing and hoarding by the wholesalers and retailers. In case of producers with strong connection in the corridors of power anti-hoarding administrative measures have not achieved the desired results.

Few months ago, government enforced a law titled “Price Control and Prevention of Profiteering Act.” The law has simplified the procedure for making arrest and confiscation of hoarded commodities. The price of sugar has gone up by Rs. 20 per kilogram as result of hoarding by influential owners of sugar mills. But the law is yet to be brought into action against them. The major stakeholders in cartels of sugar and other food commodities have gone to the extreme length by virtue of their tentacles in legislature and executive to keep agriculture in perpetual crisis. They have made this mainstay of the economy so convoluted that all the variables including land, water resources distribution, fixing of price of produce, seed, fertilizers and processing industries among others are either totally controlled or owned by feudal-cum-cartels. The burning question is still that “Who will bell the cat,” when lawmakers and decision makers in the executive are part and parcel of cartels. It is an undeniable truth that a government officer of local administration will think 100 times to make his mind for taking action against any politically powerful stakeholder of cartel. The ECC has given approval for the import of 300,000 tonnes of sugar as supply augmenting measure in anticipation of shortage of commodity. Import of food commodities had worked as an effective stabaliser of prices in 2000-07, when cartels were not so strong and wielding influence in government’s decision making. Let us hope that imported quantities of sugar will not end up in the hands of cartel.

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The Frontier Post

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