A.R BHAT
A country’s economy is what depicts the condition of the political affairs of that state. For small scale businesses and industries to grow, a state needs political stability and trade friendly environment for investment. But if a state is in turmoil, then the economy also gets adversely affected.
After having tons of the overhanging burden of loans, from the International Monetary Fund and a few of its allies, Present-day Pakistan is on the verge of bankruptcy. While the current government, in the fear of losing their seats has administered inflation control policy measures. Additionally, the former Prime Minister Imran Khan was removed from his seat by the opposition parties creating unrest in the political domain of the country. The country is already under tremendous pressure because of the country -wide protest against the exponentially increasing inflation.
To avoid the situation to go out of hand, Finance Minister Miftah Ismail made an agreement with the International Monetary Fund to cut some slack by giving them an extended one-year bailout program, in addition, to increase in the size of the loan by approximately $2 Billion. However, the agreement was modified further on discussion with IMF who instructed Pakistan to increase their fuel prices, and their power tariffs and administer steep adjustments in their taxes to restore it first and then request for a loan. The current inflation rate of Pakistan is 13.37%, that is second highest in Asia after Sri Lanka, which is already declared bankrupt and facing political turmoil. The rupee is trading at its lowest ever seen with commodities prices soaring high and the inflation rate increasing to 15.85%. The finance minister has revised the prices of petroleum products and has reduced the subsidies given to them. An additional meeting with the IMF is expected to take place which may force the country to remove subsidies on petroleum products and might convince IMF to extend an additional fund to support the crumbling economy. Sayed Shabbar Zaidi, who is also a former chairman of the federal board of revenue, said in his tweet, that he predicted the economy bankruptcy six months ago but at that time everyone criticized him and did not listen to him but now, as evident things are even worse than predicted. He added to give a plan which will be a comprehensive political and socio-economic road map for Pakistan.
Pakistan today is in a state of emergency. The state is facing violence, terrorism, protests, disruption of law and order and institutional corruption. This not only adversely affect the investment sentiment of an individual but also kills the domestic business opportunities which further give rise to problems like inflation, unemployment, stagnation, and debt which are the ultimate reasons that lead to the current situation that the country is facing which is -Bankruptcy. There have been many reasons behind the present condition of Pakistan but the one that is making all their economic measures ineffective is the inefficiency and ignorance of the bureaucrats as well as the policy makers. If the state is hoping to turn the tide and make situation better, first of all the policy makers need to come out of their luxurious bungalows and get to know the ground reality of state. Only then we can expect the situation to get better.
