“THE WORLD HAS GIVEN UP ON PAKISTAN”

Over the past year, Pakistan has been exposed to increasing political and economic uncertainty, including the rising tempo of terror attacks, and the planned ouster of the then PM Imran Khan. The aforesaid resulted in causing a serious dent in Pakistan’s economy which was already dealing with the issues of inflation, taxes and price control. A no-confidence motion which was submitted against PM Imran Khan on March 8th, 2022 by the nine-party opposition alliance – the PDM and PPP was dismissed on 3 April 2022 by the Deputy Speaker Mr. Qasim Suri through a ruling terming the no-confidence motion to be against Constitution. The ruling, however, was set aside by the order of the Supreme Court on 7 April 2022 which also contained that PM Imran Khan’s advice to the President to dissolve the Assembly was unconstitutional and of no legal effect. Whether it was constitutional or not is a matter separate from this article. ?The then PM Imran Khan lost the confidence of the house by 174 votes and ceased to hold the office of the Prime Minister on Sunday 10 April 2022.

On 11 April 2022, Mr Muhammad Shahbaz Sharif, MNA, took oath as Prime Minister on 11 April 2022 and the country departed for another journey. Very enthusiastically, “No moment will be wasted”, said the new prime minister of Pakistan. The citizens were not sure if he really meant what he said. In the first week, Sharif met with Chinese ambassador Non-Rong, spoke to Saudi Crown, wrote a letter on Kashmir to the Indian Prime Minister, and told the United States that “Pakistan wishes constructive engagement”. His reputation as a tireless administrator translated into much-needed economic relief with the Pakistani rupee regaining 5% against the U.S. dollar and the Pakistan Stock Exchange rising by 1,700 points. The PM also announced an increase in pensions two months ahead of the new budget and rejected a proposal to increase petroleum prices – a decision which was then costing the national exchequer a monthly loss of over 40 billion rupees.

It was, initially, apparent that PM Sharif’s foremost task was to tame inflation and stabilise the economy. On the other hand, Pakistan’s foreign reserves were depleted, there was no respite for the falling rupee, public debt soared, and the trade deficit is at a record high. The country was set to witness the worst energy crises that summer, to top it off. It wouldn’t be wrong to put that PM Sharif’s strategies for a sound economy were dilapidated. PM Sharif’s performance was subjected by the international media and critics from all over the world mocked him for his actions.

Even though Khan’s political regime had current account deficits and historic depreciation of the currency, it is still remembered as “an economic success story”. Khan inhered an ailing economy with inflation in the double digits. The cost of basic necessities such as food and fuel were artificially stabled at a lower price. As soon as the artificial barrier was removed, the country was exposed to high food and fuel prices. Khan was facing serious allegations and criticism from the Opposition, later formed PDM. However, the citizens had strong attachments with Khan as his initiatives for the country’s prosperity were seen heading towards fulfilment. The country was recovering from the COVID-19 pandemic, the inflation rate was lowered to single digits. The costs of basic necessities were not artificially exaggerated. Khan’s schemes for the poor citizens were blooming. Foreign investors and multi-national companies were seen to be investing in the country. Khan represented the country on different international forums which not only increased his popularity amongst the global leaders but also presented a positive image of Pakistan internationally. The country’s economy started to regain its strength from international trade and tourism. ?

It did not take much time for Pakistan from being “Naya Pakistan” to once again being “Purana Pakistan”. A while after Sharif came into power, Pakistan was dominated by the price increase and high inflation rate. The life of an average Pakistani citizen has become miserable. Name a few such as Pakistan’s dollar exchange rate is on the ongoing rise, substantial import bill - which raises demand for dollars, exports have not been able to keep up with its imports resulting in the trade deficit, the post-COVID-19 pandemic period, and the debt incurred by Pakistan which is one of the highest debt-to-GDP ratios in the world. All these factors have aggravated the situation of Pakistan with an unstable economy, political unrest, and economic ambiguity.

In 2022, devasting floods caused over $10 billion in damage and affected more than 30 million Pakistanis. Pakistan’s economic freedom score is 49.4, making its economy the 152nd freest the in the 2023 Index. Its score is 0.6 points higher than last year. Pakistan is ranked 33rd out of 39 countries in the Asia-Pacific region, and its overall score is below the world and regional averages. The judicial effectiveness of Pakistan is 29.6% which is an overall weak rule of law, and the score is below the world average. Government integrity is below the world average by 26.8% and is decreasing day by day. As of March 2023, Pakistan’s food inflation rate is 47.15% and its year-over-year growth has increased to 35.4%. Less than 50% (approx. 45.9%) of people in Pakistan have business freedom. Approximately, 78.3% of Pakistani nationals are tax burdened. The public debt is 74.9% of the gross domestic percentage (GDP). Only 40% of Pakistanis have financial freedom which is classified as repressed by the International 2023 Index of Economic Freedom. The health ratio is 11.4% which is below the world average ratio. 60% of Pakistanis in the investment sector are mostly unfree making it the opposite of financial freedom.

Author’s Opinion:

Pakistan’s economic slump

The economic outlook of Pakistan is dependent on the timely and full implementation of the policy reforms, with very high downside risks. Pakistan has been left over to drown by the rest of the world given its over-and-over political and economic instability. Pakistan has zero relevance and involvement in the world's economic and political orders and affairs. Unlike 2018-2021, where Pakistan was invited and was part of most of the international world forums, it has now only been some of the international events where Pakistan has been invited to make representations. It is an accumulated failure of the governments in the past decades which has resultantly brought Pakistan into such a critical situation. To be more specific, it is a collective failure wherein every citizen and every institution of the state has failed the country and it goes without saying that we as a nation have failed.

Unlike our neighbouring country India, where freelancers and individuals with innovative ideas are highly appreciated and accustomed to sufficient platforms to perform and apply their skills. Pakistan, on the other hand, is a cultural wasteland and a graveyard of individual ideas. Individuals with unconventional and free-spirited ideas are systematically curbed and stifled by the twin monsters of religiosity and patriotism. In terms of country level and societal hierarchy, there is an unannounced censorship of talent.

A question arises as to what Pakistanis normally offer to the world. The answer to this question is very simple. As discussed above, the high inflation rates throughout the decades have caused thousands of Pakistanis to leave the country so as to find jobs that might free them from the financial crises. Most such Pakistanis are unskilled workers who visit the Gulf countries for labour. Studies anticipate that the semiskilled technical workforce doesn’t conform to international standards. Rather statistics from the surveys conducted internationally show that Pakistanis aboard are noisy, quarrelsome, and with very low productivity at work.

After the regime change in April 2022, the Gulf seems to be fed up with Pakistan being a perpetual basket case. Pakistan has been borrowing money from the Gulf countries since the 1970s. The first major loan was received from the Gulf in 1974 when Saudi Arabia and the UAE provided financial assistance to help Pakistan cope with the economic crises caused by the 1971 war with India. Since then, Pakistan has been borrowing from the Gulf to support its budget deficits and external debt obligations. There is no harm in saying that every incoming ruler of Pakistan reaches out to the oil-rich kingdoms with a begging bowl.

Pakistan’s betrayal and hypocritical policies

Since the Afghan war against the Soviets from late 1979 to early 1989, the U.S. in particular and the West generally have lost their trust in Pakistan. They consider Pakistan treacherous and deceitful, which may be right or wrong, but they have their reasons to consider so. The U.S. is only interested in transactional and day-to-day relations and apparently, this has been the case for more than a decade now. China, Pakistan’s all-weather friend, has heavily invested in the country's economy. However, recently China has been bitterly disappointed at Pakistan’s monumental failure to provide security to Chinese citizens. Moreover, Pakistan’s deplorable ineptitude to finish its own part of the job and necessary homework for the projects has left China increasingly aloof and disinterested.

India's Prime Minister, Narendra Modi, on the other hand, is leapfrogging the geopolitics and economics of his country. The Kashmir struggle can be counted as heroic, but the issue of Kashmir is more or less accepted by the world as fait accompli. No one desires to pay little heed to the Kashmir issue except for Pakistan.

IMF, Terrorism & State actors

From a bird’s eye view, the country’s economy has devastatingly received a hard blow. The country’s currency is free-falling. The current reserves are depleting fast, and the country’s leadership is begging the International Monetary Fund (IMF) to rescue it. Pakistan has always been begging IMF for loans at high-interest rates. In return, the loans were being granted with conditions such as higher prices on commodities and exorbitant taxes. The capitalists have been looting the middle and lower-class society by extorting money from them in the name of high manufacturing costs and different kinds of taxes. To be fair and frank, Pakistan’s economy is melting faster than any other thing on this planet.

Pakistan has once again been targeted by the terrorists and several attacks have been planned and carried out recently. It is never too late before the Tehreek-e-Taliban Pakistan (TTP) accepts that they were behind the attacks. These recent terror attacks are a sign that TTP is strengthening itself and has been found to be having increasing footprints across the southern districts of the KPK, indeed it an emerging yet serious challenge. Given the fact that Pakistan’s security policy regarding Afghanistan has met a dead end, Pakistan is using the good offices of the Taliban in Kabul to negotiate with the TTP from a position which is relatively weak.

The state of institutions in Pakistan is deteriorating rapidly. The judiciary is divided, and its members are publicly revealing their internal conflicts. Citizens are losing faith in the security agencies and establishment, which is now embroiled in controversy and is viewed more as a problem than a solution. The establishment is no longer seen as a last resort and has lost its credibility as a reliable institution.

Unfair Treatment & Marginalisation of Karachi

The population of the country is rapidly increasing, leading to environmental degradation. Speaking of Karachi, the largest metropolis, and the financial capital of Pakistan. The city alone generates more than half of the country’s tax revenue, making it a major contributor to the national exchequer. It is the hub of Pakistan’s banking and financial sector, housing the headquarters of the country’s major banks and stock exchanges. The port of Karachi handles more than 60% of the country’s cargo and serves not only as a gateway for trade within Pakistan but also with the neighbouring countries. I would be accused of partisanism if I restrain myself from the aphorism that given all the above attributes, Karachi is in fact the most suffering city in Pakistan with no clean drinking water and a completely devastated infrastructure.

Pakistan is facing significant challenges such as water scarcity, food insecurity, environmental degradation, and a growing population. Despite claims of potential tourism, there has been little investment in infrastructure development in this sector.

The country as a whole

Pakistani society is currently experiencing a substantial division, resulting in chaos and a decrease in the rule of law. Natural disasters are leaving people to fend for themselves, and infrastructure is deteriorating due to the massive migration to Karachi. Unfortunately, the lack of regulations and institutions to oversee the situation has resulted in a state of mediocrity. Despite several government attempts, state-owned enterprises such as Pakistan Steel, Railways, and PIA continue to suffer significant losses, amounting to approximately Rs.1 trillion. The situation appears to be deteriorating, with corrupt and politicised police, a breakdown in law enforcement, and the prosecution of crime. As a result, this country with a population of over 220 million people is becoming increasingly ungovernable. The current leaders lack the intellectual and emotional capability to confront the challenges at hand, derailing the country's progress towards becoming responsible and equal partner in the global community.

Written by:

Barrister Ata Ur Rehman

Advocate High Court

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