The economic situation in Pakistan has gone from bad to worse. Prices are going up for electricity, fuel and food. Pakistan imports far more than it exports, and fuel imports in particular are hurting the country the most. So much so that the electricity prices skyrocketed and common people were not able to pay their bills, and the country almost risked default this year. In June 2023 after lengthy negotiations Pakistan signed another 3 billion $ bailout from the International Monetary Fund (IMF), but it came with strings attached. To qualify, it asked Pakistan to cut fuel subsidies, and bring about policy changes which were bound to be unpopular among the masses.
One such province that sustains on government subsidies due to its remoteness is Gilgit-Baltistan (GB). Faced with a financial crunch at the national level and in order to fulfil the IMF requirements, centre asked GB to rationalize wheat price in March this year. Since then Islamabad has been trying to withdraw the subsidy on wheat in the region in an effort to introduce a “targeted subsidy” on wheat. This has become a political issue and there are calls for mass agitation by civil society groups against such a move. What is wheat subsidy and why is this so important for the people of GB? Why has it become a political issue?
In the late 1970’s, instead of integrating the region under the new constitution, in recognition of the fact that the region was part of the Jammu and Kashmir State ruled by the Maharaja of Kashmir until its illegal occupation by Pakistani forces, Pakistan clubbed GB with Kashmir and instead of granting fundamental rights to the people of the region (then called Northern Areas), they were offered a very affordable subsidy on wheat, at one-fourth of the market price. The Federal Government of Pakistan was providing PKR 10bn of wheat subsidy to the people of GB keeping the difficult living situation of the people of the region in mind. However, now it is being lifted. The rate of wheat, which was heavily subsidised for the region, has significantly increased over the past six months first from PKR 7.5 to PKR 20 per kilogram in June and then recently to PKR 52 per kg.
According to a notification , “Government officials above basic pay scale 17 will not receive subsidized wheat, among other relatively well-off segments of the society”. It has to be noted that wheat is hailed as the most essential ingredient used in the making of every traditional dish and local cuisine in this region. If we roughly divide the population of GB, there are three socio-economic strata, high, middle and low, and till now there was a blanket subsidy covering them all. With the change in the policy to targeted subsidy, the most affected will be the low-income section. After the announcement of the new policy, a survey was conducted by the local government in which people were asked to fill forms consenting for the new arrangements. According to sources, there was a lot of resentment and people were doubtful about the new policy. There is a fear among the people, especially near the border regions that they will not get the subsidy at all due to their remoteness. The subsidized wheat on one hand has arguably catered to the needs of people in the region but on the other hand has gravely morphed the subsistent and self-sufficient local farming systems.
The Awami Action Committee (AAC), an alliance of some of the local political, regional and religious parties, is spearheading protest in various areas of the GB’s ten districts and during various street protests in Gilgit and Skardu, protestors were seen chanting slogans against both the local and federal governments. They denounced the government’s decision to raise the subsidised wheat rate to Rs 52 per kg and blamed the local government for giving up to the pressures of the centre.
Many people in the region are also comparing the issue of subsidy in GB to the seamless subsidy given to the people of Ladakh by the government of India. They argue that since both Ladakh and GB have similar terrain, their needs are also similar and hence the government of Pakistan should learn lessons from the success of subsidy in Ladakh and implement the same in GB. The AAC warned that if the government failed to meet their demands by 30 November, they would intensify the protests, observing shutter-down and wheel-jam strikes across the region.
The Committee believes that Pakistan is duty bound to provide wheat on subsidised rates as GB does not have constitutional rights and the regional government does not have any real legislative powers. Many analysts from the region would cite political and constitutional disempowerment as a reason for the region receiving subsidy on wheat prices. The protesters came out with a joint declaration, which said that GB has been governed through executive orders for 75 years and that its people reject the government’s decision to increase wheat prices, considering it brazen exploitation by the government of Pakistan.
The people of GB believe that subsidy is not charity. It is the right of the people of Gilgit-Baltistan. They have also demanded subsidies on other essential items like gas cylinders, opposed the imposition of “illegal taxes” and the implementation of the revenue and finance acts in the region. They also expressed deep frustration over daily power outages despite the region’s vast water reserves, reflecting on governmental incompetence and corruption. The new rates were applied from 01 December and it has to be seen if the government makes some changes in favour of the people.
The issue of wheat subsidy has opened a Pandora’s Box on the status of the region and people are demanding that they should also be given their constitutional rights and be made a separate province or given more rights under the Kashmir affairs. GB is a disputed territory with meagre per capita hand holding as the government and other state institutions are acquiring land at mass scales which further reduces the land available for cultivation in the future. Hence, all the policies geared towards increasing the size of the economic pie should therefore be on the priority list of all stakeholders, alongside the efforts for greater political constitutional justice for people of Gilgit and Baltistan.
Dr Zainab Akhter is a Research Analyst in Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA) and keeps a close eye on developments in Gilgit Baltistan. She is also an associate member of International Centre for Peace Studies. The views expressed are her own
