Source: Bloomberg

By Khalid Qayum and Farhan Sharif

Jan. 17 (Bloomberg) — President Pervez Musharraf, battling civil unrest and a surge in terrorist attacks, is facing growing discontent caused by record wheat prices and power cuts in Pakistan.

“The flour crisis is bad, but in ordinary times it would not have been an impossible policy problem,” said Adil Najam, professor of international relations, at Boston University. “But times are not ordinary in Pakistan and it has become not just an additive to Musharraf’s problems but a metaphor for all that is wrong in his regime.”

Pakistan’s opposition parties hope to gain votes by highlighting the long queues of people waiting at government fair price shops across the country to buy subsidized flour. Power outages in the past month causes by a water shortage have also led to protests.

South Asia’s second-biggest economy is not likely to achieve its 7.2 percent economic target in the year ending June 30, because incidents of terrorism hurt industrial growth, Dawn newspaper reported today, citing a briefing given to Musharraf by the finance ministry.

The price of wheat flour rose to a record 2,150 rupees ($34) for a 100 kilogram bag because of hoarding and smuggling to Afghanistan, said Iqbal Dawood, chairman of the Pakistan Flour Mills Association. Pakistan harvested a record 23.2 million tons of wheat in 2007, and has set a target of 24 million tons for this year, according to the farm ministry.

Opposition politicians say the plight of Pakistan’s 164 million people has worsened during Musharraf’s eight-year rule.

Shortages Advertised

“Flour shortage, electricity shortage, gas shortage: Is this your performance!” read an advertisement by former premier Nawaz Sharif’s Muslim League in ‘Jang,’ an Urdu newspaper.

Flour, in short-supply across the country, isn’t available at most stores in the biggest city of Karachi. The government sent troops to guard flour mills last week to prevent illegal hoarding and smuggling and said there is enough wheat to avoid a shortage.

“Musharraf and Pakistan Muslim League-Quaid-e-Azam have been discredited because of lawlessness, unemployment and inflation,” said Farhatullah Babar, spokesman for slain opposition leader Benazir Bhutto. “After all, this is what the people look for before voting for any party.”

Rising Inflation

Pakistan’s inflation accelerated in December, increasing the likelihood that the government will miss its annual target of 6.5 percent. Consumer prices jumped 8.8 percent from a year earlier, after gaining 8.7 percent in November, according to the Federal Bureau of Statistics. The cost of food and beverages climbed 12.2 percent in December from a year earlier.

The Musharraf-backed Pakistan Muslim League-Quaid-i-Azam has ruled the south Asian country since 2002. The party’s return to power is being challenged by opposition leaders Sharif and Asif Ali Zardari, who is heading the Pakistan Peoples Party as co- chairman after last month’s assassination of Bhutto.

Pakistan’s national elections are scheduled for Feb. 18 after the government delayed voting by six weeks following countrywide riots after the assassination of Bhutto on Dec. 27.

Pakistan, which plans to import 1 million tons of wheat before the new crop arrives in April, will award tenders to import 610,000 tons of the grain tomorrow.

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Tags: Assassination, Benazir Bhutto, Elections, Inflation, Musharraf, PPP, Wheat crisis