Pakistan shuts down subsidized stores, dealing a blow to low-income groups

The Pakistani government, led by PM Shehbaz Sharif, perhaps took a harsh and avoidable decision when it shut down “utility stores” across the country, citing financial constraints.

The closure added burdens on the already struggling shoulders of the low-income Pakistanis who considered these establishments lifelines to procure subsidized groceries.

In its Editorial published by The Express Tribune, titled as ‘A Bad Decision’, the newspaper said: “The decision to shut down Utility Stores countrywide is ill-conceived and will result in societal unrest.”

These stores were like tiny pearls in the ocean of unemployment and inflation, which has already overwhelmed the economically grappling country. The stores employed around 11,000 people.

Till the decision to shut their doors was announced, around 5,900 stores, including franchises, with a subsidy of more than Rs 50 billion, were serving around 30 million low-income people.

It is highly irrational on the part of the Pakistani government to take such a decision when the country is combating rising food prices, say many Pakistan watchers.

“Irrespective of the fact that stocks and service at these outlets were not up to mark and people sizzled for hours to try their luck, it was still a major source of consolation for people who lived on a tightened budget to make ends meet,” The Express Tribune Editorial said describing the harsh stand of the government which will toughen the lives of the lower middle class.

The decision shows the Pakistani government remains clueless and all its efforts fail to provide any support to the overburdened citizens.

The Editorial further said: “It’s high time to realize that the masses are getting furious, and any attempt to push them to the wall will have serious consequences.”

Pakistan’s Dawn News voiced the frustration of the masses in its Editorial published on the same issue: “In a country where price-gouging and black-marketing are common, and state regulation of the market to prevent consumer exploitation by unscrupulous traders is extremely weak, the Utility Stores have provided some relief.”

The long queues of people standing in front of the stores, especially during Ramadan, when traders tend to hike the prices of essentials, proved that these utility outlets have not lost their significance.

It is the need of the hour that the government should immediately announce what alternative to these stores or structural restructuring it is planning to boost the economy.

“If the USC is restructured, how will the state ensure that the poor consumers are not fleeced? A workable plan, therefore, is required that details how the interests of consumers will be protected while the state disassociates itself from the USC,” Dawn News said in its Editorial.

An Asian Development Bank (ADB) report this year said Pakistan’s living costs are the highest in Asia, accompanied by a staggering 25 percent inflation rate.

Released in Manila, the report paints a bleak economic outlook, forecasting a modest 1.9 percent growth rate for Pakistan, the fourth lowest in the region, according to Firstpost.

According to the Asian Development Outlook cited by Pakistan’s Express Tribune, the inflation rate is projected to soar to 15 percent in the upcoming fiscal year, maintaining Pakistan’s status as the leader in inflation among the 46 countries surveyed.

With the struggling economy, rising inflation, power cuts, and the Balochistan crisis, the Pakistani government seems to be in the middle of a devastating cyclonic storm that shows no sign of slowing down. 

PM Shehbaz Sharif’s government should act immediately to restructure the country and ensure he evades a mass agitation like Bangladesh in the future. 

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