All trade no production. This has led to a false reality in our bigger cities. If you go through the streets of Lahore you will see so many shops that you will think it is a burgeoning economy. The reality however, is different. Every frustrated young man, and retired professional laid down by downsizing to cut budget deficits, is opening up a grocery store or the like.
Streets have shops from corner to corner but few customers.
This results in a dizzying rate of business failures which goes unnoticed by the economy that is largely informal now. The number of petty trade businesses has translated into an ever-reduced number of customers per enterprise. This results in further pressure on each establishment to hike up their profit margins to remain solvent. It all translates into a nightmare of artificial inflation, which is feeding upon the few remaining capital resources of the poorest people in the society. Micro-finance has no service to offer in such a situation.