PESHAWAR: Moody’s downgrading of Pakistan’s sovereign credit rating is a verdict on the current regime’s incompetence in running the economy. In May 2008, Pakistan’s credit rating stood at B1, when it was reduced to B3. And now it has been cut further, to Caa1, its lowest level ever.
On May 28, 1998, immediately following the testing of nuclear devices and the imposition of economic sanctions, Pakistan’s credit rating was lowered from B2 to B3. A few months later, the rating was cut to Caa1, the same level as now.
In layperson terms, these ratings basically downgrade Pakistan’s foreign and local bonds and debts to junk level. This is what happens when politicians without any economic qualifications consider themselves as jack of all trades and instead of leaving important issues to professional specialists start dictating economic policies with pliant economists willing to oblige them. The tragedy of Pakistan is not that its generals or politicians are not qualified economists, but that they consider themselves as Mr Know-it-alls, deciding matters which are beyond their comprehension and grasp. While these politicians and generals have multiplied their assets, the country has been driven to near-economic collapse, inflation is rampant and unemployment high. This, in turn, provides an ideal breeding ground for terrorism and gives rise to even petty street crimes.
Gul Zaman
Published in The Express Tribune, July 19th, 2012.
