Pakistan should set its home so as: Global consultants on its financial disaster

akistan has been reeling underneath a large financial disaster with the nation’s rupee recording a historic low of 275 to the US greenback, inflation rising to over 27 per cent and international trade reserves dropping to the bottom stage since 1998 at round USD 3 billion. (File photograph)

By Press Trust of India: Pakistan is dealing with an unprecedented diplomatic and financial disaster and even its pals within the Islamic world now recognise that the nation has to set its home so as and never help radical Islamic teams to function from its territory, international strategic consultants mentioned.

They had been additionally largely in settlement that the Pakistani “deep state” is “shaken up” and doesn’t know learn how to deal with or management the frankenstein that it created within the type of terrorist group Tehreek-e-Taliban Pakistan (TTP).

Pakistan has been reeling underneath a large financial disaster with the nation’s rupee recording a historic low of 275 to the US greenback, inflation rising to over 27 per cent and international trade reserves dropping to the bottom stage since 1998 at round USD 3 billion which isn’t sufficient even to cowl a month’s imports.

The downside has been additional exacerbated by a collection of terror assaults, together with a serious suicide bombing within the northwestern metropolis of Peshawar on January 30 that killed greater than 100 individuals.

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Pakistan authorities’s negotiations with the International Monetary Fund (IMF) to unlock USD 1.1 billion funds haven’t but yielded constructive outcomes, triggering fears of additional deterioration within the total state of affairs.

Husain Haqqani, a former Pakistan ambassador to the US and Senior Fellow at Hudson Institute, mentioned terrorism has blocked international direct funding into Pakistan and its “unrealistic dependence” on China has resulted in an enormous exterior debt.

The consultants additionally identified the aid-driven nature of Pakistan’s economic system and mentioned the nation should have a look at avenues for income technology.

“Pakistan’s recurrent economic crises are the product of a refusal to reform. The country’s national narrative has led to ever-increasing and unsustainable military spending. Jihadist terrorism has blocked foreign direct investment. An unrealistic dependence on China has resulted in huge external debt,” Haqqani mentioned.

“And poor relations with neighbours – Afghanistan and India – have limited trade prospects. Pakistan needs to go beyond a political economy of conflict to become prosperous and that seems a bridge too far for now,” he added.

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Former Indian Army chief Gen (retd) JJ Singh mentioned Pakistan seems to have already “pressed the button to self-implode”.

“The situation is slowly spiralling out of control and we do not know who is actually calling the shots in Pakistan. The deep state in Pakistan is also shaken up and they do not know how to handle or control the frankenstein they created in the form of TTP,” Singh informed PTI.

It is a reason for concern for everyone together with India when a rustic having nuclear weapons is in a state of affairs the place there seems to be a major problem of management, he mentioned.

Former Indian excessive commissioner to Pakistan G Parthasarathy mentioned Pakistan should transfer away from selling terrorism and concentrate on constructive financial cooperation if it desires to get out of the disaster.

“Pakistan now faces an unprecedented diplomatic and strategic crisis. Even its friends in the Islamic world recognised that it also has to set its house in order and not support radical Islamic groups and terrorists on its territories and its neighbourhood,” he mentioned.

“Pakistan’s past embrace of the Taliban has done its neighbourhood immense damage. It would be well-advised to move away from promoting terrorism to constructive economic cooperation bilaterally and regionally,” he mentioned.

Former Indian Army chief Gen Deepak Kapoor mentioned that the state of affairs in Pakistan is simply too fluid.

Sajid Tarar, a profitable Pakistani-American businessman, mentioned the inflation in Pakistan goes by means of the roof, and attributed the present collapse of the nation’s economic system to corruption by successive governments.

“There is no accountability,” he mentioned. “Our ruling elite has no interest in Pakistan,” he alleged.

Dr Farzana Shaikh, Associate Fellow of Asia-Pacific Programme at Chatham House, London, mentioned that financial turmoil in Pakistan was within the making for the previous couple of months and have become more and more acute because the new authorities took over.

“Where precisely the blame lies is difficult to establish because the current government blames the precarious economic situation to be the fault of the previous government, headed by former prime minister Imran Khan,” she mentioned.

“But I think it is also fair to say that the economic turmoil has been made much worse by the fact that the current government simply did not have a coherent policy in place to address what it knew would develop into an economic crisis,” she mentioned.

Shaikh additionally echoed considerations flagged by Gen (retd) Singh.

“For the region, Pakistan is not a small country – it is 220 million people, it’s nuclear armed and if this economic crisis fuels instability, the spillover and effect on neighbouring countries could be quite serious. There is really no underestimating that,” she mentioned.

Dr Hafiz Pasha, an eminent economist of Pakistan, mentioned the state of affairs is essential however the authorities has taken the choice to implement the IMF programme that may carry USD 1.1 billion and open channels for help from different multilateral establishments and nations.

“Pakistan still needs 10 to 12 billion dollars in the current year ending in June. But after the IMF loan is made available, things will improve. So the worst will be over and there will be no fear of default once the IMF program is on the track,” he mentioned.

“But it will further increase the debt burden and the country cannot tackle these loans without going for debt restructuring. We should go for restructuring and plan for the long term,” he mentioned.

For the long run, he mentioned, Pakistan wants to extend exports and taxes.

“Without these measures, we cannot bring economic stability. Another thing is to control imports. There is also a need to control expenses,” he mentioned.

Published On:

Feb 12, 2023