Notwithstanding the weak economic indicators, business was buoyant, particularly in the country’s cattle markets, with traders leading 30 million citizens to boost the Eidul Azha economy by a good 20 per cent in volume over the last year.
Keeping up with the growing trend, the size of the Eidul Azha economy surged to a record — reckoned at Rs510 billion in 2013 — from Rs450 billion in 2012.
The figure of spending was based on a series of calculations inferred from indications such as figures of Eid-related cash withdrawals from banks, cash injections by the State Bank to ease banks’ liquidity position, and results of random surveys of buyers and sellers by the media from multiple sources and cities in the country
The marginal improvement in the security situation must have helped, but experts credit the rising religiosity in the society and among non-resident compatriots for the surge.
According to a random survey, every sixth citizen of the 180 million-strong population participates in the sacrificial animal market. In the trading community, however, following the Islamic tradition of Prophet Abraham’s sacrifice is said to be the strongest, as no less than 95 per cent of traders participate in this to earn God’s blessings.
The middle class is understood to be under pressure because of static wages in a moribund economy, as well as a hike in the cost of living and shrinking multiple income options for a family. However, the sacrificial activity cannot simply assume the projected volume without the participation of this class, which constitutes 55 per cent of the population.
People with lesser means sometimes opt for collective arrangements, with several families sharing the cost of a big cattle head and combining the occasion with social and cultural underpinnings.
They pool agreed shares and contribute accordingly to cover the total cost of managing the whole exercise. In 2013, a share in a cow was at least Rs5,500, up from Rs4,500 in 2012. It varied with the size of an animal and the trouble that the family was willing to go to seek a bargain price.
The question is: who funds the massive spending on this occasion? In the absence of official consolidated data, this scribe relied on responses of informed businessmen, bankers and economists to identify sources that sustain and support the annual increment in Eid spending.
As much as 30 per cent of the total spending during Eidul Azha is said to be covered by overseas compatriots. The bigger chunk of the rest is financed by incomes not fully reflected in the national accounts of the country. It includes wealth in the undocumented sectors.
“All my relatives living abroad prefer to do qurbani in Pakistan, even though many have the option to do it in the country they now live in. They believe it would be done here more to their preference. It is very impersonal out there.
“Besides, sending money back here to their relatives earns them respect and social standing in the family/community that they left behind but like to keep in touch with,” Najam, a banker, told this writer.
“If overseas compatriots can remit billions of dollars a year, they sure can foot the bill of a sizeable portion of Eidul Azha spending. There are towns and districts where every family has someone working abroad. In Mirpur, Azad Kashmir, it is hard to find a family without a connection in the UK,” a former president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) told Dawn.
Earnings from trading and real estate businesses and of service providers are not documented. Several attempts by the government to get them into the tax net have not succeeded so far.
“The real economy is much larger than the size of the one projected in official data. The spending on occasions such as this can be used by the government as a window to peek through and gauge the actual size of the economy. Had the government cared, it would have done it,” said an economist.
“I am positive that traders (shopkeepers, even pan shop owners), as a collective segment, are most actively involved in qurbani. If one in 10 citizens buys cattle for sacrifice, almost cent per cent retailers do it. Survey the city of Karachi. You will find better, bigger and most expensive animals in localities of traders,” Shabbar Zaidi, a tax expert and former Sindh minister of finance, told this scribe.
“This class earns well. Though no one knows how well, as the sector is not documented.
They feel no obligation to pay income tax and other liabilities to the exchequer. They probably like to spend their savings on animals to seek God’s blessings,” he added.
When reached over phone, Dr Shahida Wazarat was perplexed over the affordability of ‘common citizens’ in a manipulated market, where goods are priced dearly. “I wonder how people of smaller means buy animals that people with stable salaries find hard to afford,” she said.
FPCCI President Zubair Ahmed Malik said the trend depicts the real size of the economy. “We have been telling the government not to burden the corporate sector and those already in the tax net with additional taxation. It is unfair and unjust to burden ordinary people and taxpaying businesses with new levies when there is so much hidden wealth that surfaces on occasions such as this,” he lamented.
“Does it not surprise you that an activity of this scale has not been able to catch the attention of those vested with the responsibility of improving economic governance in the country,” asked an anonymous economist.
“Can you blame me if I suspect that the administration is hands in gloves with barons who operate and manipulate the huge cattle market? As for buyers, I think people budget this spending in their annual accounts. They block their savings in dollars or other avenues to cover their Eid budget. Did you not hear about the long lines for encashing dollars a day before Eid holidays,” he asked
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