Daily Times

PAKISTAN is on the verge of experiencing an economic catastrophe that it has not experienced in decades. However, the significant contributing factor, the recent “constitutional hoax,” and the political turmoil brought on by the PTI administration that is presently out of power are not the only ones. Many administrations and Pakistan’s governing class, both military and civilian, share most of the blame for the problem since they failed their constituents, representatives, and the people they purport to represent. ?

Key indicators reveal the severity of the ongoing severe economic crisis. The rupee to dollar exchange rate needed to be corrected; however, the 40% value decline does not qualify as a correction. Due to the lack of an exchange rate and trade strategy, as well as the speculation that hammered the rupee based on the total lack of political vision, there is now a significant hazard of political instability. ?

Similar to this, despite numerous economists’ warnings that the current account deficit was fading and could rise to 6 per cent of GDP, the PTI government was preoccupied with regaling and partying Pakistanis living abroad and making Pakistan attractive to them while ignoring those who were experiencing economic hardships at home. The administration laughed off the abnormally high inflation rate, which has been in double digits for over two years, since, according to its calculations-based on a lack of knowledge of fundamental statistics and economics-Pakistan was still less expensive than most other nations. ?There is no need to list all of the pompous claims made in 2018. The government of Pakistan had to lower its growth projections since the economy was unable to support the high GDP growth rate it had set as its goal for this fiscal year. What irony. ?But right now, the Pakistani government is pleading with the IMF for money to survive for fear of going bankrupt and defaulting, as if the country’s economic expansion vanished in a matter of weeks. The economic situation in Pakistan is really dire. ?

Imran Khan’s arrogance thwarted any attempts to communicate with the opposition.

Staying in power for more than a few months would be unwise and opportunistic on the part of the next administration that has replaced the PTI. They will regret their choice to delay the announcement of polls and may lose the elections ahead if they take place fairly. Over the upcoming weeks, one may anticipate further turbulence and unrest, and no new administration will be permitted to rule with a combative PTI in opposition. Due to the severity of the economic crisis, harsh steps will be taken, which will cause more inflation, much higher gasoline and power prices, a dollar worth more than Rs200, and an increase in interest rates. For some time, the economy will remain in disarray. ?Recent global events are also impacting Pakistan’s political and economic stability. One is that the region is now at a distinct volatility stage after 40 years. Afghanistan is no longer at the centre of Pakistan’s military or geopolitical priorities, nor is it for the US or other major players-at least not for now. Global geopolitics have changed in various ways, including China, new alliances, and shifting priorities in the Middle East and elsewhere. Pakistan’s worth and relevance have significantly decreased on the regional and international levels, which has an economic impact. In the past, Pakistan was getting much of the finances by fighting other’s wars, but now this is not the case. Bailout packages won’t be as easy to get. ?

In addition, a war in Europe, a significant worldwide downturn, and extremely high and growing commodities costs. While comparable to 2008, China is unable to save the global economy this time. Pakistan has historically exhibited some resistance to global trends, but perhaps this time, it won’t be as strong. ?For example, of the 40 nations and regions included in The Economist, which includes Pakistan, 37 have seen a significant depreciation against the US dollar, with Pakistan losing 23 per cent and Turkey as much as 50 per cent since last year. Pakistan’s currency is not the only one to suffer from increased US interest rates and a stronger dollar, but many other currencies will be weakened too.

Furthermore, it is anticipated that commodity prices will remain high for several months as a result of this and the conflict in Ukraine. The current worldwide phenomenon of inflation is expected to last long into the upcoming fiscal year. No matter what economic policies Pakistan seeks to implement, with or without the IMF, it would not be immune to such vulnerability. ?

If changes like redistributing resources and shifting priorities are not enacted, the economy will continue to experience recurrent crises. This is not only about the interests of one political party or the military in terms of whom and what they back. The recent comments made by the former finance minister show that these are collective concerns that are beyond the awareness of people who make decisions. Whatever else Mr Shaukat Tarin may have stated, his confirmation that his administration had grown debt to 76 per cent and not 80 per cent as reported was seen to be of utmost importance. Squabbling between interest groups has replaced discussion of policy. ?

Expecting the military and civilian elite that has controlled Pakistan throughout this neoliberal era to alter its objectives and behaviour after ruling Pakistan for decades is stupid. Both political parties have disregarded the needs and interests of the people they claim to represent in favour of pandering to their wealthy supporters on a local, regional, or international level. No matter how much joy is expressed about exports, remittances, and GDP growth, what matters to people is inflation, a topic that receives little discussion outside of inanities from the wealthy and the privileged. ? More freebies, more “relief,” and more aid are their suggested solutions to this issue. Giving Pakistan 22 past programs, most of which have completely failed or have been discontinued, further shows that the IMF has caused much more issues than it has been able to resolve. ?

Imran Khan’s arrogance thwarted any attempts to communicate with the opposition. He solely mistreated his political rivals. He frequently got bitten by this. A new administration’s only responsibility is to make all political opponents and allies aware of the impending economic catastrophe in Pakistan and to encourage them to work together to reach an agreement on the country’s future economic course. This economic crisis is the result of conflicts among Pakistan’s ruling elite. Governments come and go, but those burdened by broken promises deserve a brighter future. ?

The writer is a student at Quaid-i-Azam University, Islamabad