One of the most important aspect for any state to function in international system is health of its economy. Currently Pakistan is facing an unprecedented and deep economic crisis. The citizen’s well-being and Pakistan’s economic security is seriously threatened. However, no political party is paying much heed to the looming threats attached with this economic recession. The only contribution they are making is with mud-slinging each other, petty politics, and egoism to pursue vested interests. The failure in governance and wrong focus of economic policies since long have resulted in the predicament for Pakistan. This attitude has become a regular occurrence in every political tenure and is leading to continuous borrowing and IMF bailout packages.
The burden of this bad governance and flawed policies is ultimately suffered by the common man, who is subjected to raised taxes and rising inflation. No long term economic plans were either formulated or executed and the reliance was only on immediate economic stabilization measures that led to increase in burden of loans, inflation, and increased taxes. The common man of Pakistan has always struggled to bear this economic pressure.
According to economic experts, the present economic situation in the country is fast becoming similar to Sri Lanka where the economic downfall has crumbled state structures and have made the masses forget about politics and worry about making ends meet. Violence has been the only mean for people to relieve their anger on the politicians. Pakistan is following the same path as the foreign reserves have once again dropped to 10 Billion USD, sufficient for two months only. Pakistan is left with no other option except to go for the IMF bailout package again. No payment is being deferred by Saudi Arabia and China against their loans. There has been a 100% increase in imports as compared to exports. The subsidies given on petrol and diesel prices have caused a loss of Rs 300 Billion to the economy. All the three successive government in the past PPP, PMLN, and PTI have been running the country on loans instead of finding alternatives for self-reliance and self-sufficiency.
During the Imran Khan regime despite of the ambitious slogans of reforms and accountability the government wasn’t able to bring any significant improvement in governance and economy. Maximum GDP growth during the IK’s tenure was 5.3% and the fiscal deficit rose to around 8.5% of GDP. The currency depreciated up to 34% and the inflation rose to record high of 13% with zero expansion in revenue generation. At the end of PTI government Pakistan foreign reserves fell to the level of 10 Billion USD.
On the premise of good governance and economic revival, the PMLN government wasn’t able to deliver as well. The socio-economic façade crumbled when the tenure of PMLN ended. Maximum GDP growth was 5.28% and the fiscal deficit ballooned to 5.5%. The trade deficit was 9.8% and the inflation was 5.1%. The unemployment rate during the PMLN tenure was recorded at 5.8%.
Going back further analyzing the PPP tenure in 2013, no meaningful effect of devolution of power was achieved and the economic situation worsened. The fiscal deficit was 4% to 7% of GDP and the currency devalued up to 40%. Trade deficit was recorded at 6.6% and inflation rose to 7.34%.
The ongoing political debates are of no use and will further aggravate the national issues. Every political party must be asked by its followers on previous blunders they made and the tangible future plans they have to resolve these issues. It seems that the foreign conspiracy mantra has been hurled to distract away the real issues of economic collapse. Playing with the sentiments of public will allow them to get another tenure in the government, however, the issues will remain intact and the economic situation will only worsen if no structural and systemic steps are taken by the political elite governing the country.
About Author: Humais Sheikh is an independent defense analyst based in Islamabad. He has completed his Masters in Defense and Strategic Studies from Quaid-I-Azam University, Islamabad.