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Standing at an economic crossroads

Col (r) Ikram Ullah Khan

With continued deterioration of the economic health of Pakistan while the country is economically standing on a slippery slope, its economic managers are contemplating ways to meet repayment deadline approaching near as the country has to make the payment of 3.7 billion dollars in external debt installment due in June while State Bank of Pakistan has reportedly just 4.3 dollars in foreign exchange reserves. 

According to the reputed UK journal ‘Financial Times’, Islamabad is pinning hopes on China that it will roll over more the 2 billion dollars in debt next month. The UK publication writes that China has committed to help the country meet two crucial repayments in June by providing fresh funds worth 2.3 billion dollars immediately after Pakistan makes the payments in order to avert the looming risk of default. 
Pakistan which has been relying on lenders like IMF and other friendly countries like China, Saudi Arabia and the UAE to finance its budget deficit, is currently experiencing the worst kind of economic and political crises following a spate of unfortunate events occurring one after the other during the past few years that include COVID-19, the devastating floods afflicting the country in 2022, resurgence of terrorism and on top of it, the ongoing political crisis gripping the country thus making the debt-ridden country slide down economically. 
With no other option left, Pakistan looks towards its all-weather friend China in the current crisis situation and desperately needs help from China to stave off the risk of an economic default after the hopes of IMF bailout tranche wither away even after a series of hectic negotiation as the international lender has constantly been moving its goalposts and is reluctant to release the direly-needed bailout package. It may be mentioned here that the IMF bailout package is crucial to unlock the financial help from friendly countries because without IMF bailout package they have expressed their inability to extend any kind of financial aid to Pakistan. 
It’s extremely unfortunate that the economic team of successive governments in the past looking after the country’s economic affairs have been shying away from taking measures that could put the country on the path of recovery with less reliance on foreign loans. Every government thought it prudent to leave the problem to its successor to grapple with it knowing fully well that passing the buck on to the next government can only make it worse. They preferred to look the other way with their eyes wide open and failed to appreciate that managing the economy through foreign and domestic loans can’t provide viable solution to resuscitate it.  
Acquiring loans from IMF and other countries and getting afloat temporarily is just like treating a cancerous disease with untargeted medicines which may provide a temporary relief from pain but doesn’t provide a permanent cure. There is a need to find out a long-term solution to revive the economy and make it stand on its feet. The ad hoc measures the government takes every time to get out of economic crisis further compounds the situation. This chronic economic ailment has assumed the shape of a complicated disease that requires targeted treatment. The disease seems to metastasize with indecent rapidity with its tentacles spread far and wide and is likely to affect the entire body. 
The country is currently facing not only hyper-inflation but stagflationery situation when industries are put almost at a halt, agricultural sector faces insurmountable hardships and unemployment has broken all past records. Foreign exchange reserves have plummeted to a dangerous level which according to economic experts are barely enough to cover about a month of imports thus forcing the government to impose a ban on imports of even those items which are deemed essential for economic growth. This has led to severe import shortage which has pushed the inflation upward to a record high level with consumer price index (CPI) reportedly hitting 36 % in April and is likely to spiral up in the coming weeks and months. 
According to a recent survey report, around  60 % population of Pakistan consists of such families who have a single earner looking after 5-8 family members who are directly dependent on him. So in such a dreadful scenario, it’s not very difficult to imagine how hard it is for a single earner with Rs.50-60 thousand per month earning to look after his family members ranging from 5-8. 
The other day I saw a friend of mine lamenting over electricity bill for the month of April which he was carrying in his hand. The bill showed the units consumed at 177 and the amount at Rs. 8500. In a plaintive tone he said, “we are just two individuals living in our humble dwelling, i.e. myself and my wife, and we have not started using fans as yet. What would happen during summer when we would be using fans round the clock and would also be required to use AC during peak of summer?” 
This is just a small little example and a single case of a common man with average income, but most certainly, there is much more to it than meets the eye, and is sufficient to open the closed eyes of the incumbent rulers. They can’t absolve themselves from the responsibility of the current economic fiasco. 
The unprecedented depreciation of Pakistani currency against US dollar fluctuating between Rs. 290-308 to a dollar and the nonstop galloping inflation has made the life of a common man belonging to fixed income group like salaried people and pensioners absolutely miserable. It has become not only difficult but virtually impossible for them to make both ends meet. In such a grim economic situation, all kinds of promises and consolations on the part of the government sans tangible steps that could be perceptible to a common man only add insult to injury. 
Political stability is the prerequisite for economic stability. Pakistan’s viability depends on a sound economy. Today, we have a devastated economy due to undue political polarization that the country is experiencing. It has led to anarchy and chaos that has paralyzed the country and has brought it to a complete halt. Certain political elements with selfish motives and self-serving ends are seen capitalizing on public sentiments in order to achieve their personal objectives even at the cost of the security and honour of the country. They can’t see beyond the end of their nose.
Such elements are squarely responsible for the current political and economic crisis the country has sunk in deep. These people deserve no sympathy and leniency and must be brought to justice if we want to get rid of the recurring problems hitting the country every now and then.
Lastly, nations do face critical situations in their lives, but with iron determination, perseverance and hard work they manage to come out of the crisis and surmount the insurmountable. As a great nation, we need to show resilience and steadfastness in the face of the current economic and political crisis and rise to the occasion.
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