Here we go

It begins.

When we stopped for gas today, I noticed that the price of fuel had gone up considerably since the last time we filled up the car. When I remarked on this to the driver, he informed me that the price of fuel had gone up some 10%, literally overnight. It wasn’t just fuel, he told me, but staple goods such as sugar and flour as well. Predictably, these sudden and dramatic price hikes sparked demonstrations in Rawalpindi yesterday, and probably elsewhere too. (Pindi is about 30 minutes from Islamabad, and is the source of most of the capital’s commuters. ISB is practically deserted on the weekends, because everybody lives in Pindi.)

We asked the driver whether the demonstrations had been peaceful. The brown eyes that regarded me in the rearview mirror were amused. “This is Pakistan. We are not having peaceful demonstrations. Somebody will be throwing the bricks, and then somebody else is start breaking something. Once somebody is breaking something, everybody is start breaking something.”

In this combustible society, it doesn’t take much to spark something, and unfortunately, the floods have supplied a whole book of matches. The economic impact of the floods is going to be huge. There are lots of angles to this, but the most significant is agriculture. Many of the country’s most important export crops have been wiped out. Agriculture accounts for 21% of GDP and a whopping 45% of employment. This means that food prices are going up even as spending power is dropping. It also means that the government has a lot less money to spend on social transfers.

The Pakistani people expect their government to shield them from shocks like these – as any people would. But the government just can’t do it. Meanwhile, the papers are full of stories of corruption and embezzlement, including of aid money. Pakistanis are used to corruption, but their patience is understandably ebbing.

It seems inevitable that social unrest will increase over the coming weeks and months, as the full livelihood and economic ramifications of this crisis really begins to bite. Riots are already commonplace at aid distribution sites, which is par for the course. But as the secondary effects of the floods start to come on line, the problem will expand to urban areas, the big cities in particular, and that’s when things could really get out of hand. The Pakistani police are not known for being soft touches, either, so the potential for downward spiral is high.

A lot of this could be alleviated by a sufficient injection of cash. Trouble is, the cash would have to go the government – they’re the only ones who can go to the required scale. Guess how enthusiastic the donors are about that?

All in all, it’s another nail-biter in Pakistan. We’ve escaped some of the worst-case scenarios already. Some are still up in the air. Large-scale civil unrest is one of those things.

Watch this space.