Is Pakistan On Verge Of An Economic Crisis? Know What Went Wong & How It Can Affect India

Following Sri Lanka, another neighbour is now on the brink of a seemingly inevitable economic collapse. It is unsure whether the crisis in Pakistan is a turmoil, an imbroglio, a calamity, or a catastrophe; however, various reports firmly indicate that the situation is much above the former and inching closer to the latter.

It is not good for India if the neighbours are weak and stumbling. From a steep fall in export-import to the influx of refugees leading to law and order issues, the volatile situation is bound to cast many challenges on the country, hurting the economy to that extent. Hence it would be better if bewildered Pakistan recovers and returns to a near-normal position sooner than later. But the possibilities for a quick, early revival are getting thinner daily.

'The weakest economy in South Asia', as described by the World Bank, needs a visionary, a solid force to place it back on rails. Pakistan needs a leader who could push an agenda for the future through the impulsive narrow-minded fragments to exploit the worsening situation for their petty political advantages.

So at present, only external aid could salvage the nation to a certain extent. It is a stark reality, and the leaders and the people of Pakistan are themselves to blame for this pathetic state of affairs. Rulers' apathy and leaders' indifference are taking their toll. People had their share, too, allowing themselves to be ridden by fundamentalists and vested interests.

Natural calamity is said to be a reason for the economic crisis. The unprecedented floods of July last year had inundated vast areas of cultivation. It is now seven months, and it is said that water has yet to recede in many places, and the government machinery has miserably failed in rescue operations.

There is none to alleviate the hardship, to mitigate the pain. Nobody seems to care about finding ways to restore the production of food grains. As a result, people are now on the streets fighting for essential food items. Nothing is done to insinuate much-needed money into the hands of the farmers to instil confidence in the people's minds.

With a paltry foreign exchange reserve of around 5 billion USD, the government of Pakistan is left with no option but to go out with a bowl begging for alms. The inflation rate at the end of last month stood at 24.5 per cent prices of essential commodities in the open market rose from 30 per cent to 50 per cent every month. Some rises are alarming- wheat at 57.3 per cent, tea at 63.8 per cent, and rice at 54.5 per cent. It means that in less than two months, the prices got doubled.

And there is something else to add to their woes. In many areas, open markets are being controlled by elements inimical to the exchequer who charge exorbitantly, squeezing the public and driving them paupers. The helpless government remains a mute spectator. As reports suggest, border areas are in the firm grip of fundamentalists, leaving the survival of the people permanently at the mercy of the miscreants.

As a noble commitment, financial mismanagement is being carefully followed by successive rulers; as a sacred duty, appeasing the fundamentalists is being meticulously carried out by every leader of the prominence. Sadly for Pakistan, no leader ever placed the people's welfare above everything else. Today's economic crisis is the culmination of years of political vengeance, misrule, and mismanagement.

Pakistan for long needed an economic policy that would suit the changing requirements of international trade and business. While the world market is flooded with innovative ideas born out of technical brilliance, Pakistan's rulers should have done something to adapt to the imminent changes that offered more challenges and a lot more opportunities.

They believed in the borrowed economy and resorted to huge foreign loans that go unabated to date. Pakistan celebrates 'success' whenever it receives a loan from outside, ultimately landing the country in a debt trap.

As cautioned by many, China's 'assistance' is behind the economic breakdown of Pakistan. This has almost become the order of the day with the Chinese intervention in a country's economy. Those who vociferously shout from rooftops against the 'oppressive tendency' of 'imperialist America' against the World Bank and the IMF do not utter a word regarding China.

Imran Khan says that around 7.5 lakh youth have recently fled the country, fearing further deterioration. He appeals to the people to 'stay back and fight'. In the meantime, the Pakistani government is in a state of shock as the World Bank has deferred the payment of further loans to its next financial year starting July 1. Pakistan's government had believed that the World Bank would release at least 450 million USD immediately, which would help tide over the crisis for a few days.

It looks certain that the coming months will pose more severe challenges to the people of Pakistan. They need to be persistent and resilient enough to withstand the acute pressure till the production of wheat and other foodgrains provides relief. After that, with a sustained prudent approach of the rulers towards strengthening the indigenous economy, Pakistan could rise as a stable economy. It would require strong political will and a definite national commitment to uplift their people.

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