Pakistani Traders Protest Rising Cost of Living and Dollar Depreciation

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In an unprecedented display of public dissatisfaction, Pakistani traders nationwide launched a strike on Saturday, protesting against the crippling cost of living, record depreciation of the rupee against the dollar, and skyrocketing fuel and utility bills. Orchestrated by ex-senator Sirajul Haq, leader of the Jamaat-e-Islami political party, the strike drew significant support from diverse sectors, including trade and business bodies, market associations, lawyers, and transporters.

The economic hub of Pakistan, Karachi, witnessed an almost total shutdown, with thin vehicle traffic and closed markets and shopping centers. Other major cities like Lahore, Peshawar, and Quetta also observed significant closures, reflecting the widespread discontent simmering across the country. As per the state-run Bureau of Statistics, the annual inflation rate in Pakistan was 27.4% in August, indicating the severity of the economic crisis that the nation is grappling with.


Nationwide Strike in Pakistan Over Rising Living Costs

Pakistani traders initiated a countrywide strike on Saturday, protesting against the escalating cost of living, higher fuel and utility bills, and a record slump of the rupee against the dollar, causing widespread public discontent.

Strike Endorsed by Various Bodies

The strike, called by ex-senator Sirajul Haq of the Jamaat-e-Islami religious political party, was widely supported by trade and business bodies, lawyers’ associations, market associations, and transporters. Traders across the country closed their shops, while protesters took to the streets, burning tires to express their anger.

Major Cities Paralyzed

Karachi, Pakistan’s commercial and economic hub, was almost completely shut down, with thin vehicular traffic on the roads and all markets and shopping centers closed. Similarly, Lahore, the capital of Punjab province, saw major markets closed for the day, lawyers stayed away from courts, and public transport ceased operations. Peshawar and Quetta were also partially closed.

Fahad Ahmed, a trader in Karachi, expressed his concern, saying, "If you pay 100,000 rupees ($330) in rent for your shop and you have to pay an equal amount in electricity bill, how can you survive?"

Inflation a Major Challenge

Pakistan’s annual inflation rate stood at a staggering 27.4% in August, according to data released by the state-run Bureau of Statistics. Prior to securing a bailout deal with the International Monetary Fund (IMF), Pakistan was on the brink of default. However, conditions for the bailout required Pakistan to reduce subsidies that cushioned the impact of rising living costs, leading to a surge in prices, especially energy costs.

Mohammad Sohail, a prominent economist and head of Topline Securities, admitted that Pakistan is going through a challenging time. He highlighted the difficulties the government is facing in implementing the painful IMF-dictated reforms amidst political polarization.

Depreciating Rupee Fuels Inflation

The Pakistani rupee’s significant depreciation against the dollar, crossing a historic threshold of 300 rupees to the dollar, has led to higher import costs, contributing to inflation. Sohail believes that strict stabilization measures and improving foreign exchange reserves can stabilize the currency and inflation in the future.

However, the caretaker prime minister, Anwaarul Haq Kakar, dismissed the significance of the protests, referring to the complaints as a "nonissue."

Takeaways

The nationwide strike in Pakistan points to the wider economic challenges the country is grappling with. Despite securing an IMF bailout, the measures required to fulfill the conditions of the bailout are causing further hardships to the common people. The depreciating rupee is adding to the woes, contributing to the inflation. The government’s dismissal of the protests as a "nonissue" could further fuel public discontent if the authorities do not take immediate steps to address these pressing issues.

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