There is not a shred of doubt that the recent developments in Islamabad have affected the country’s economic progress, causing direct and indirect, measurable and immeasurable losses.
The sit-ins, organised by Imran Khan’s PTI and Tahirul Qadri-led PAT, have forced the cancellation of a visit by Sri Lankan president before casting doubt on the planned arrival of the Chinese head of state.
The nature of the Chinese president’s visit is as high-profile as it gets and the slightest of reshuffling in plans would strengthen hands of those international forces that do not want to see close ties between Pakistan and China. Furthermore, Chinese president is set to visit India, which could be interpreted as further isolation for Pakistan.
During the visit, the Chinese head of state was expected to sign several defence and economic pacts.
Pakistan has been negotiating a deal to acquire four submarines besides purchasing two squadrons of JF-17 Thunder multi-role aircraft, which is the joint production of Pakistan and China. Additionally, agreements were expected to be signed for 14 power sector projects that would have the potential to generate 10,400 megawatts of electricity with active Chinese assistance.
At a time of a severe power crisis, the deals are priceless.
“The international image of Pakistan has considerably been shattered,” the federal government responded in the Supreme Court of Pakistan. The fallout has also shattered confidence of investors, it added.
The government has so far estimated overall losses to the economy at Rs547 billion. Out of the total, Rs228 billion have been estimated on account of 4.3% depreciation in the value of Pakistani rupee against the US dollar. Another Rs319 billion was estimated due to decline witnessed in the stock market. However, the Karachi Stock Exchange has now entered the recovery mode on the back of reports suggesting that the contesting parties have agreed to resolve the issue through dialogue.
The government has also claimed that political uncertainty has also adversely affected financial markets and foreign currency reserves have declined to $13.52 billion from the $13.926 billion in the week that ended on August 15.
It comes as no surprise that protesters have rendered the government machinery dysfunctional. The Pak-Secretariat – the seat of civilian bureaucracy – remained almost closed for about two weeks. Important matters remain unattended and barring emergency nature no other files are being entertained.
Since August 16, less than half of the Federal Board of Revenue’s workforce has been able to attend office that is also located at the Constitution Avenue. However, it would not affect revenue collection as the work in field formations is going on smoothly.
The additional cost of security has been estimated at Rs357.6 million. An amount of Rs226.8 million has already been released, while ministry of interior has requested Rs130.6 million additional funds as of August 29.
The damage to public property has been estimated at Rs5 million by the Capital Development Authority. The equipment of state-owned Pakistan Television was also damaged while protestors burnt a police vehicle besides damaging 17 others. So far, 717 persons have been injured including 202 police personnel and three protesters also lost their lives, according to official estimates.
The Trader Association of Islamabad has claimed Rs10 billion losses – a figure that seems highly exaggerated. However, the government machinery has come to a standstill.
Schools have remained shut with children losing valuable learning time. Police forces from Punjab and AJK have been temporarily using the schools’ premises.
The fear is that the government will try to hide behind the political turmoil to hide its inefficiency on the economic front. The government has set ambitious economic targets for the current financial year and many of these cannot be achieved.
However, protestors seem to have given an excuse to the government.
International financial institutions that were somehow ready to deal with the government have, for the time being, taken a back seat and are waiting for a resolution of the dispute.
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Published in The Express Tribune, September 8th, 2014.
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