KARACHI:
Presently, Pakistan is faced with multiple socio-economic challenges that must be addressed immediately. The value of the Pakistani rupee constantly fluctuates and recently plummeted to an all-time low against the US dollar. The State Bank of Pakistan (SBP) is in a severe crisis with only $11 billion left to pay for imports, which cannot even buy two months of imports. The SBP also has to pay out $14 billion in the next nine months; this demonstrates a balance of payment crisis. Resultantly, Pakistan will now be unable to pay for the essential imports and external repayments.
The current situation in Pakistan appears to be quickly descending towards that of Lebanon and Sri Lanka, which should be a cause for concern for many. Lebanon, which was once a prosperous country, is currently faced with grave social, economic, and political crises. The leadership is involved in a power struggle and has paid little heed to the power shortages and high inflation that are crippling the Lebanese people. Sri Lanka is also going through a severe balance of payment crisis with the Sri Lankan rupee continuously depreciating. Long-lasting power cuts and price hikes have become a routine in the country.
For the last several years, Pakistan’s exports have been in decline and the country is experiencing premature deindustrialisation. Our current account deficit is expected to widen to nearly $20 billion. The ever-widening economic disparity is alienating the masses and can cause a serious civil crisis. With all these issues looming, all eyes are set on the new government and its ability to stabilise the economy. There is a need to strategise and reconsider policies toward different sectors. The country needs to speed up domestic production to increase exports and engage in balanced trade.
Iman Riaz Khan
Peshawar
Published in The Express Tribune, April 13th, 2022.
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