SUGAR POLITICS

SHAMIM AHMED RIZVI,
Bureau Chief, Islamabad
Sep 17 - 23, 2007

During hearing of a suomoto notice of "Sugar Price Scam" on Wednesday last, the Supreme Court of Pakistan directed the sugar Mills owners to submit their replies with in one month on the findings of the National Accountability that hoarding of huge stocks by them was the main factor of unprecedented hike in the prices of sugar last year.

The 7-member bench headed by the Chief Justice Iftikhar Mohammad Chaudhry posed question as to why action was not taken against the sugar mills charged with hoarding in the NAB report and how and why the report was hushed up.

The National Accountability Bureau (NAB) has come out with a report about the sugar scam which played havoc with the common man's budget by increasing the price of the commodity form RS. 21 per kilogram in February 2005 to RS. Rs.45 per kg by the end of January 2006. Reports in the print media at that time had pinpointed top politicians who were owners of the sugar mills as minting money and the grab of low sugarcane by hoarding sugar in the mills.

It was early in 2006 that the government's on persistent allegations by the members of the National Assembly on the floor of the house the sugar price hike was manipulated by sugar mills through hoarding of stocks, asked the NAB to hold an inquiry. During the inquiry the NAB found lot of substance in what had been alleged in the national Assembly. Inquiry team had identified the names of the sugar mills who had formed a carted and withheld large stocks leading to price hike. Initial findings of NAB inquiry team was also leaked to the press.

But before the NAB could finalize its report and submit to the powerful lobby of the sugar Mills owners including Ministers, and stall warts of the ruling party came into action. A delegation of Pakistan Sugar Mills Association (PSMA), headed by Zaka Ashraf, held a meeting at Presidency, with Chairman NAB an Prime minister's Advisor on Finance, Dr. Salman Shah, to clarity their position and what they communicated to the government before the crisis started. The PSMA demanded that the inquiry launched by the NAB should be stopped as it was sending wrong signals the market

After a few days the ANB announced the suspension of its inquiry, explaining that while preliminary investigation was in progress, "a lot of hue and cry was raised by various quarters, giving an impression that the NAB inquiry was contributing to further escalation in sugar prices". The Pakistan Sugar Mills Association had demanded the inquiry to be stopped saying it was sending wrong signals to the market. A press report also mentioned that, while briefing journalists on the issue., NAB had held the millers responsible for the sugar crisis, pointing out that they did not release sugar in accordance with the price at which they had procured sugarcane from the farmers. NAB, in its press release said that the impression that inquiry could contribute to further escalation of sugar price.

At any rate, it is hard to understand how a probe into profiteering and a suspected wrongdoing could have contributed to pushing the sugar prices further up. On the contrary, ordinary people had felt reassured when the government started taking various remedial measures such as releasing buffer stocks and permitting import of the commodity in gig lots, which should have dispelled the impression that the shortage would continue. Since the probe aimed at punishing those responsible for the crisis, it lent further credit to government efforts.

There are reports of a further rise in sugar prices after the shelving of the NAB inquiry, and those who had this probe abandoned must have noted the spurt with a sense of satisfaction. This is not the first time the government has stopped a good move in its tracks. AS far back as June last year, a report had disclosed that the Monopoly Control Authority (MCA), had conducted a study of the market on the direction of Prime Minister Shaukat Aziz. An MCA official told Page that on the basis of the study of the authority had reached "the conclusion that sugar mill owners have formed a cartel to fix prices at their own", and consequently the MCA "had suggested punitive action against those who were part of the carte". But as it turned out, MCA failed to issue show cause notices to the cartel members, who included some of the most influential people in the federal as well as provincial government. Little surprise then that the NAB probe, too, has been shelved on a flimsy pretext.

The NAB decision and its tacit approval by the government by keeping mum on the issue has shaken pubic confidence in government agencies and fee concerned about the plight of the poor consumers. If the government has been honest, the important thing was to establish, whether the crisis was the outcome of the sugar cartel's manipulative tactics or it had something to do with some systematic weakness. In either case, responsibility needs to be placed where it belongs and the culprits dealt with accordingly. Unfortunately so far the government has remained shy of adopting measures that secures the interests of ordinary consumers.

The report submitted by NAB to the Supreme Court has named eight ministers or their party colleagues responsible for sugar hoarding, which created sugar crisis and the price hike. This is a very serious revelation against those who are part of the government and even more so that they exercised their influence to stop the inquiry by the NAB giving the impression that the investigation was further escalating the sugar price. In any civilized society or country when an allegation is levelled against a functionary of the government, he tenders his resignation. But unfortunately this culture has not nurtured in our society and the corrupt do not bother about what people think about them and they go scot-free. These practices have impacted the Pakistani's image and we are considered as one of the ten most corrupt countries in the world. Now that the NAB report is out, the leadership of the country and the party must take appropriate action against those corrupt elements and the plundered money recovered from them.