Who will save Pakistan from Existential Economic Crisis?
Pakistan may not default very soon but the lives of common Pakistanis are getting worse day by day due to inflation and price hike. There are several factors contributing to Pakistan’s economic crisis, including bad governance, political instability, the war in Ukraine, wheat and dollar smuggling to Afghanistan, and devastating floods. The cases occurred in recent months where Pakistan’s diplomatic staff in various countries faced delayed salaries, prompting the government to sell properties in Washington DC for funds.
Former Prime Minister Imran Khan blames the government of Shehbaz Sharif for the default risk while claiming that only entering an IMF program can prevent default. Sharif’s government secured an oil import deal with Russia, challenging the narrative that it is backed by the US. Pakistan’s external borrowing, with Khan’s government borrowing around $52 billion in 45 months. Despite Khan’s promise to create a “new Pakistan,” his government signed an IMF deal in 2019 but later violated it. Pakistan faced additional economic challenges, including the impact of the Ukraine war, climate disasters, and a wheat shortage due to smuggling. The country received pledges for reconstruction but still struggled to service its debt of $274 billion.
China and the UAE provided some relief, but the IMF imposed more taxes through a mini-budget. Despite Sharif’s government willing to implement austerity measures and securing a loan from China. However, they made attempts which say otherwise. Their IMF program was criticized by majority. Respected Economist Professor Dr Shahida Wizarat recently came up with a book titled “Alternative to the IMF”. She blamed the IMF and World Bank for destroying Pakistan’s economy because most of the former Pakistani finance ministers were imported from these two financial institutions. She suggested the need for Pakistan to explore alternatives to the IMF and suggests forming an economic alliance with China, Russia, and Iran. It emphasizes the importance of ending tax evasion and bringing the wealthy into the tax net.
All political leaders must provide an economic roadmap. Pakistanis should have elections by the end of this year. They should not vote for faces rather vote for practical economic roadmap. The implementation of Supreme court’s order to hold general elections within 90 days of assembly dissolution is in Pakistan best interest. Pakistanis are urged to vote for a plan that can liberate the economy from foreign powers and prevent it from becoming caught between the IMF, China and USA.
In conclusion, Pakistan’s economic challenges are complex and multifaceted, and they require a comprehensive and long-term approach. It will require the efforts of both the government and the people to address these challenges, reduce the risk of default, and improve the quality of life for ordinary citizens. Additionally, political leaders should prioritize economic reforms and work together to create a roadmap that can guide the country toward economic stability and prosperity.