Re: An ode to Shaukat Aziz
The government buys Atta and distributes it to retailers at a fixed price below fair market value (because fair market value is too high for the ordinary Pakistani to afford). The problem is that Atta is worth more outside Pakistan than inside Pakistan.
Therefore, it makes less sense to sell Atta to the Pakistani government to sell to Pakistan consumers than it does to smuggle the Atta outside, or to hoard it and sell on the black market until the price in Pakistan rises closer to international levels found in Afghanistan and Central Asia.
There's enough Atta inside Pakistan to feed everyone. Right now it is being hoarded and smuggled. Private companies and individuals, in their greed, don't want ordinary Pakistanis to get it because they are hoping to get more money selling it to others.
Sounds sensible enough. A businessmans sells where the profit comes the most. Politically it would be popular to put checks on the exports but then economically that would be damaging because it would decrease incoming revenue though it would get a lot of votes. This is precisely how global markets operate. If someone else were selling on the market cheaper than Pakistani sellers then obviously our shortage would subside.
The politically correct way to fix this problem would be economically damaging so how do we deal with the situation. I think capitalist countries simply would let their population pay more until something else replaces the demand for it though I doubt that is possible since it is the basic essential of food in Pakistan. Same in the case of rice. So the article is not incorrect in saying that the export facilitation has caused this though not enough are knowledgible to understand the difference politically and economically especially for those households where there is no enough to eat now.