Pakistan is facing one of its worst economic crises. Economists have been critical of many policies, both long-term and short-term, and blame them for the current predicament India’s neighbor is facing.
Pakistan, a country in South Asia, with a population of almost 243 million people, which is the fifth largest in the world, and which has the world’s second-largest Muslim population, is staring at a major economic meltdown.
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Pakistan’s currency plunges to 262 against the dollar amid IMF aid uncertainty. This will be the sixth time the IMF bails out Pakistan. Frequent blackouts, agricultural land degradation caused by floods that hit Pakistan last year have led to food insecurity and price increases. Inflation is at an all-time high, and people are struggling to meet even the most basic needs due to the worsening economic crisis in Pakistan.
A host of issues have been pointed out
Firstly, Pakistan’s economy is not fiscally prudent but “publicist,” meaning that political parties, in an attempt to capture votes, are giving “freebies” to the public when this money should be used for the infrastructural development of the country. Thus, several initiatives and policy decisions are in its “political interest and not in its economic interest.”
Secondly, Pakistan is spending its budget more on defense than social welfare schemes. The country is infamous for terror funding activities and providing safe havens to terrorists on their land. Now this is backfiring, when earlier this month an attack in Peshawar, the capital of Pakistan’s Khyber Pakhtunkhwa province, claimed the lives of more than 100 worshippers at a police compound mosque. The responsibility of the attack was taken by TTP (Tehreek E Taliban Pakistan), which is an umbrella organization of various Islamist armed militant groups operating along the Afghan–Pakistan border who aim to do exactly the same thing to Pakistan as the Taliban did to Afghanistan.
Furthermore, Pakistan has lost its independence by being completely under the influence of China, so much so that Pakistan is now being called the “adopted child” of China. The Pseudo infrastructural projects building in Pakistan naming it as China Pakistan Economic Corridor (CPEC) has trapped Pakistan in China’s famous ‘debt trap policy’
Way out from economic crisis
Experts said it is the Pakistanis themselves and not the International Monetary Fund (IMF) that can help the country come out of the crisis. They need to come up with innovative measures and follow a collective approach that is “not anti-India but pro-Pakistani.”
Pakistan also needs to reduce its dependence on China and focus on manufacturing goods in the country itself. Pakistan had been good at manufacturing in the past. But those industries were either closed or affected by Chinese competition.
Pakistan needs to showcase that the system is transparent and that the money is spent on the issues and challenges that Pakistan is facing right now. Besides, different political parties must solve the problem together rather than changing the government altogether. Pakistan is in dire need of a strong government that is pro-people, proactive, and accountable.
Lessons for World
Pakistan has laid out a roadmap for other countries on “what not to do.” Particularly, this message should be heeded by South Asian countries. Already Sri Lanka has gone bankrupt and learned its lesson the hard way. Another country, Pakistan, is on the verge of collapse.
China is increasing its clout in the south Asian region with enormous speed, whether that is building infrastructural projects under the Belt and Road Initiative (BRI) or extending loans to countries. Small countries like Nepal, Bangladesh, Myanmar, and the Solomon Islands are under the radar of China.
Countries should focus on building their economies’ resilience. Money should be spent on building human resources rather than building military capabilities. Better understanding local interests, promoting good governance, and strengthening civil society capacity can surely bring positive changes.