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Sugar: health, industry, economy — II

The preponderance of sugar over other industries has contributed to the decline of our resilient cotton crop, causing hindrances to a sustainable economic future. The production statistics for major crops of Pakistan are shown below:

It is essential to analyze the impact of sugar in order to truly understand why perpetuating the ‘sugar mafia’s’ interests is detrimental for Pakistan. Let us take a look at the per capita consumption of sugar in Pakistan:

According to Faostat (2018), sugar consumption per capita reached a high of 23.9 kg in Pakistan. Another important factor to note is the diabetes rate in Pakistan and in the world. The strong correlation between added sugars and the development of type 2 diabetes is well-established. This is attributed to sugar’s direct effect on the liver, as well as an indirect effect of increasing body weight. “The prevalence of diabetes in Pakistan has reached 17.1%, 148% higher than previously reported. In 2019, over 19 million adults in Pakistan were estimated to be living with diabetes – putting them at risk of life-threatening complications.” (International Diabetes Federation). In 2019, 38 million more adults were estimated to be living with diabetes globally compared to the results published in 2017. Pakistan was subsequently placed in the top 10 countries in terms of an absolute increase in diabetes prevalence.

Earlier this year, the IDF urged authorities in Pakistan to double the taxes on Sugar-Sweetened Beverages (SSBs) and to do more to prevent diabetes in the population. They highlighted that diabetes presents a significant threat to economic advancement, particularly in low and middle-income countries, where more than three in four of all people with diabetes now live. Almost two-thirds (63%) of people with diabetes are of working age.

Yet in Pakistan, sugarcane cultivation is increasing constantly compared to any other major crop of the country. Approximately, a million hectares’ land is currently used as cultivation field for sugar in the country. Data from 2011 showed Pakistan ranked at number 6 in the top 10 world’s sugarcane producers, despite the country not having any competitive advantage in sugarcane production.

We previously emphasized that sugarcane is a water-guzzling crop, with disastrous implications for a country facing a water crisis. However, our farmers are prone to thinking in terms of short-term profits, further incentivized to do so through a push from political power and patronage. Not only is sugar touted as sturdier in the face of fluctuating weather, it also requires less manpower in the fields. Long-term implications for GDP, economic growth and health are therefore neglected in favor of higher profits and relative ease.

It is hoped that the government will give serious consideration to our recommendations of doing away with sugar price supports, export subsidies, and the import tariff on sugar imports. The deregulation of the sugar market is essential to allow free trade, thereby attracting investment and increasing competitiveness. Furthermore, the resources wasted in creating market distortions that favour our sugar barons can prove to be far more fruitful if dedicated to strengthening the cotton industry.

The implementation of policies that support the textile industry have borne tremendous results for Pakistan’s economy, whilst creating a number of jobs and easing the pressure on foreign reserves. This is evident from the record increase in exports witnessed last year. A recent State bank report has emphasized the textile sector’s pivotal role. The textile sector recorded an impressive increase of 21%. In the previous year, textile exports accounted for $13 billion but with sustained efforts the industry has exceeded its targets, reaching a figure of $15.5 billion. However, poor productivity in the cotton sector puts the viability of the export-oriented textile sector at risk, and therefore threatens an industry that has a 60% contribution to overall exports of the country. Therefore, we must keep in view the detrimental effects of perpetuating the sugar industry’s interests, not only on the health of our people but also our economy, along with the stark contrast in performance of the sugar industry to the textile industry in recent times.

Shahid Sattar and Eman Ahmed, "Sugar: health, industry, economy — II," Business Recorder. 2021-08-28.
Keywords: Economic growth , Economic zones , Economic activity , Economic future , Economic conditions , Sales tax , Stat Bank , Fedral Budget , Economic policy , IMF , GDP

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