Simmering fires of Pakistan’s inflationary crisis could sever connection between citizens and state

The connection between citizen and state is becoming frayed to an extent I have rarely seen before.

In our national conversation, most of the reason for why this is happening has been ascribed to the rollback of rights and constitutional protections in recent years, a phenomenon that is accelerating rather than drawing to a close. Part of the reason for this emphasis is the large and outsized voice that lawyers have in our national discourse, and they necessarily see everything through the lens of law, rights and the Constitution.

But there is another reason that is at least equally important and, I will argue, more foundational. That reason is livelihoods. The most ferocious inflationary fire of our history still smoulders in our midst. In the last five years, my own per unit electricity cost has more than tripled. The price of petrol has gone from around Rs 100 (or slightly above) to somewhere around Rs 260 per litre. The dollar has gone from around Rs 150 to Rs 270 today, with further devaluations still possible in the months ahead.

I could go on and on to establish the fact that the past few years, whatever starting point you wish to choose, have seen a historic erosion of both wealth and the purchasing power of ordinary citizens. Salaried individuals could have seen as much as 30% of their purchasing power wiped out in the past five years. If you kept your wealth in rupee-based assets, devaluation alone could have wiped out more than half of its value.

This is not normal. These are near historic levels of degradation of the standard of living. And it is not properly understood by us as to how such episodes of severe degradation of the standard of living impacts a citizen. We don’t have full appreciation of all the ways in which a population which has stewed so long in the fires of inflation will react and behave.

Here are some examples. Consider the cost of healthcare rising. Somebody who used to go to a doctor when they or their child was sick and can no longer afford to do so will turn either to homeopaths or spiritual healers. Somebody who cannot find a safe place to keep their money from eroding in value will either seek to dollarise it, invest in “committees”, or place it in pyramid schemes that promise large and rapid returns.

Some universities are seeing declining applications, while in others, applications may not be declining, but conversations with teachers and VCs suggest that the financial stress on students even from “middle class” backgrounds, those whose families own property, a car, and have multiple children in elite institutions, has risen to the point where it is aggravating behaviours that show a transactional approach to education. More students bickering over grades, for example. Or more students telling their teachers “we are paying you for this”; and definitely elevated stress levels among the students, with one senior university leader describing the response as “generalised anger” at things around them.

This is the part about inflation that is not properly appreciated. Inflation is not just about things becoming more expensive and leaving people worse off. In its most benign forms, that is what it is. But in aggravated form, of the sort that we have seen in the last four to five years, with the peak hitting around the first half of 2023 but the smouldering remains still around us, inflation can burn away at the rational moorings of a human being and the human’s connection with the larger systems of power and control within which we live and pursue our livelihoods and well-being.

At any given time, a certain proportion of the population will certainly be in contact with faith healers and predatory lenders and speculative rackets, to secure their health, finance their consumption, or park whatever little wealth they may possess. But after an inflationary tsunami like the one we have just seen, this proportion rises dramatically, and the intensity of their engagement with these informal, non-rational sources of income support, wealth management, educational investment all increases. And with this rising arc of rising numbers of people exiting the rationality of the system, come other things.

A large population in the hands of quacks and rackets is more likely, to take one example, to believe in conspiracy theories to explain large developments in their world. In such a population, mobs can be quick to form, violence erupts more readily and social media rumours trigger large crowd behaviours as well as propagate myths that may appear to others as sheer nonsense but exert a powerful grip on those caught up in the mania of the moment.

The vulnerabilities that eventually express themselves as lynch mobs, widespread faith in conspiracy-based disinformation, generalised anger at the world, or any other seemingly irrational belief or behaviour, often have their origins in people’s thinking and behaviour becoming unmoored from the system from which they expect to derive their livelihood.

As the system intensifies its demands from the populace – demands for capturing their incomes to pay for its own expenses, or demands of continuing loyalty in the face of grievous rights violations – it enters a vicious cycle where it cannibalises the sources of its own support to pay for its own dysfunctions. This is what makes the present crisis different from preceding ones.

Expressed purely in economic terms, the present moment is not worse than what Pakistan saw in 2007 and 2008, for instance. The scale of the terror attacks is not larger today than it was back then. What is different this time is the sheer number of people who are expressing their total rejection of the system and its demands, with the latest such expression coming in the form of the February 8 vote.

Coercion and repression will not set this equation right. Only dialogue and reconnecting with the people’s will can do that.

The writer is a business and economy journalist.

This article was first published on Dawn.com.