By Zubeida Mustafa
WITH shopping plazas mushrooming all over, new restaurants springing up, car showrooms proliferating and the advertising industry enjoying a boom, how can one say that consumerism in Pakistan is not on the rise.
With people equating personal happiness with the possession of goods and services, the cosumerist culture has been actively promoted as an intrinsic part of the government’s economic policy in the post-9/11 period.
In the last three years or so, the country has been awash with cash — some from the remittances by the Pakistani expatriates, and some from the aid given by the West to reward Islamabad for its cooperation in the war on terror.
When a policy to kick-start the economy was introduced, interests on bank loans were lowered drastically, returns from saving schemes were cut phenomenally, leasing for the purchase of cars, air conditioners and other household goods became good business, and banks made loans available for the asking. In fact the banks went on an aggressive drive to extend loans and telephone calls were received from banks offering loans for the purchase of a house or tempting people to obtain a credit card.
What was the result? People responded. Those who had one car bought a second car because they were made to believe that it was their need. Those whose car was two years’ old and in perfect condition felt that they had to buy the latest model to keep up with the Joneses (or should we say the Jans). Those who had done without a car all their life found they could now buy second-hand cars being disposed of by the rich. The more enterprising obtained a loan from a leasing company and went in for a new car.
Look up the Pakistan Economic Survey, 2003-04 and you will see how the production of consumer items has suddenly shot up. The manufacture of cars (that are basically sold in the home market) jumped up by 63.5 per cent in 2003-04 compared to the previous year. The production of vegetable ghee and cooking oil increased by 13.6 and 22.9 per cent respectively in the same period (something that will not overly please the cardiologists). The manufacture of refrigerators was up by 68.8 per cent. And of course, there is the ubiquitous cell phone, now a necessity for the new lifestyle and a status symbol for every class. The number of users has registered a whopping increase of 54.2 per cent with 3.7 million cell phone owners in the country.
This has certainly activated the national economy. But at what cost? By the State Bank’s own admission inflation was 8.5 per cent in June 2004 and the Economic Survey concedes that the contribution of food inflation to overall inflation has been 50 per cent and that is why the low income classes have suffered most. Food inflation was 13.4 per cent (for those with an income under Rs 3,000 it was 15.1 per cent).
Apart from the economic impact of consumerism, which can be negated by corrective measures, the grim repercussions of a policy based on demand side economics that blatantly promotes consumerism are felt most in the social behaviour of the people.
We have always been famous for being spendthrift with poor saving habits. Now we are being actively encouraged with official backing to borrow and spend. It would be interesting to note a few years later what the recovery rate of loans will be, that is, if defaults are not already taking place. That will of course have economic consequences.
But this is going to affect our social environment as well, as is already happening. The first impact is that the divide between the rich and the poor is growing. Worse still, it is very visible because consumerism also brings in its wake conspicuous consumption. Many goods are purchased as status symbols — the brands are important and not the utility. After that the latest model acquires equal importance. There comes a stage when people lose the ability to distinguish between need and desire. If they want something they feel it is their basic need, even if it is not.
Where do the poor stand in this race between need and desire? The government’s own exercise to assess poverty has led it to the happy conclusion that poverty is on the decline in Pakistan. Patting the policymakers on the back, the Economic Survey says that “the incidence of poverty at the national level has declined by 4.2 percentage points … These results are not surprising as there has been a 35 per cent increase in the average monthly consumption expenditure of households … Other social indicators and living conditions have also exhibited significant improvements”.
According to this calculation, people are better off because their caloric intake has improved, school enrolment ratio is up and a bigger amount is being spent on social sectors, especially education and health care (Rs118 billion in 2003-04). But have our planners ever cared to ask where this money is going? It is obviously not going into the right channels because the quality of education and health care remains poor. Corruption, which has been the bane of this country for decades, is now on the rise.
Economists and sociologists would do well to estimate how much consumerism has contributed to the growing corruption. When people live beyond their means they have to cut corners by cheating to meet their expenditure. If they were not being encouraged to buy air conditioners through offers of easy loans, they would not feel the need to operate kundas to make optimum use of the air conditioners because of which their electricity bills shoot up to the sky.
The incidence of crime has also been growing. At one time, Conventional wisdom held that those deprived of the means to fulfil their basic needs, mainly the indigent, committed crimes such as theft for their sustenance. But now we know many of those involved in crimes are children of affluent parents who are not satisfied with the money they get to spend.
While all this is bad enough, one must also address the erosion of human values that has come in the wake of a selfish, market-driven consumerism. Martin Jacques, a visiting fellow at the London School of Economics, identifies three trends that are profoundly changing the very basic nature of society. One is the rise of individualism. The second is the spread of the market in every area of society that has led to greater competitiveness and third is the spread of communication technology which is “contracting our private space erasing our personal time and accelerating the pace of life”.
These changes are not good omens. Add to this the tendency to look for avenues to make a quick buck. Gone are the age-old ambitions of people to work hard for a lifetime to earn enough to achieve their dreams.
Consumerism will undermine the human values and relationships we have cherished for generations. It is sad that the market is making people identify strongly with the products or services they consume, especially those with commercial brand names that are considered prestigious. Globalization has exacerbated the crisis as all major multinationals are now operating in Pakistan. Isn’t it time that this policy of promoting consumerism was halted? Why does all the investment have to go into the manufacture of consumer items? It is a myth that this policy has created jobs, for unemployment has gone up — from 5.8 per cent (2.3 million) in 1999 to 8.2 per cent (3.7 million) in 2004.
It is time the long term effects of the consumer culture were studied and alternatives found such as diversification of the economy, increasing the real purchasing power of the people, curbing inflation and checking the easy leasing policy for consumer items.