By Ghulam Haider
Pakistan, the world’s fifth most populous country, is facing a series of serious economic and political challenges as inflation hits a 48-year high, and foreign currency reserves are only enough to cover less than a month of imports.
The country is edging closer to a debt default, a situation similar to that faced by other developing countries such as Sri Lanka. The country is still grappling with the aftermath of last year’s devastating floods, which caused billions in damages, highlighting the financial consequences of a warming planet.
Talks of bailout money from the International Monetary Fund (IMF) are ongoing, but the amount being discussed as part of the $6.5 billion loan program is far from enough to replenish Pakistan’s depleted coffers. The government’s ongoing conflict with former leader Imran Khan has cleaved the country and has raised concerns about the outcome of national elections expected later this year. The recent suicide bombing in Peshawar, which claimed over 100 lives, also highlights the risks associated with the country’s continued links to the Taliban, who have tightened their control in neighboring Afghanistan.
These challenges have had a significant impact on businesses across the country. Muhammad Ali, who runs a seafood restaurant, reports that his sales have dropped by 50 per cent this winter, as middle-class customers stay away due to the economic crunch. In sharpening inequality, prices for staples such as meat and wheat skyrocket are also in focus.
The high cost of fuel is another source of concern for the people of Pakistan. The government recently raised the price of petrol to over 262 rupees per litre, which has led many to reduce their commuting. This has resulted in a decrease in sales for petrol stations, as fewer people are filling up their tanks. Many people are taking out loans to afford basic necessities, such as electricity bills that have doubled.
Nazia, a maid in Karachi’s richest neighborhood, has had to borrow money to keep up with the rising cost of living. She has even sold all of her gold ornaments to pay for monthly expenses including the fattening utility bills, while her 16-year-old son has taken a job at a restaurant instead of attending school.
In rural areas, farmers are facing heavy losses due to high fuel and electricity costs that are drastically cutting into their profits. Ali Asghar, who grows wheat, sugarcane, pulses, and cattle fodder on a 20-acre farm in Punjab’s Sheikhupura district, reports that labour costs have increased dramatically in recent years. Despite being classified as the world’s eighth most vulnerable country to climate change, Pakistan contributes only 1 per cent to global emissions, leaving the country with limited resources to spend on food, clothing, education, and electricity.
Last summer, floods in Sind province and in some parts of the Punjab and Khyber Pakhtunkhwa provinces claimed over 1,300 lives and caused almost $40 billion in damages. Officials have pushed wealthy nations to cover the bill, but the country is still struggling to recover from the traumatic shocks. With the challenges faced by the country’s economy and political situation, it is clear that life in Pakistan is becoming increasingly difficult.
The current tough economic and political challenges facing Pakistan are having a significant impact on the country’s citizens as the country is edging closer to a debt default. The impact of these challenges is far-reaching and is affecting people’s ability to provide for themselves and their families. Many are struggling to put food on the table, let alone pay for other necessities such as clothing and education.
While the challenges facing Pakistan are significant, with the right actions, the country can work towards a brighter future. By addressing the root causes of its economic and political problems, Pakistan can work to rebuild its financial stability and secure a more stable future for its citizens. Whether through increased aid from the international community or more effective domestic policymaking to be shouldered by the country, there is reason to believe that a better tomorrow is possible.