Political Instability Causing Irreparable Damage To Economy In Pakistan
Islamabad: Pakistan faces irreparable damage to the economy due to political instability, reported The News International.
Amid a rapidly tumbling economy, the writing on the wall for Pakistan's future is clear - that the country faces another monumental crisis in its history.
While Pakistanis are deprived of their basic needs, and unbearable economic challenges in the shape of inflation, unemployment and financial instability, all political parties have staked out the country's sovereignty.
The intensifying push to arrest opposition politicians such as Fawad Chaudhary of Pakistan Tehreek-e-Insaf (PTI) is bound to backfire as often witnessed in the past while the rising political temperature triggered by the PTI stepping up its agitation will only aggravate prospects for eventually stabilising Pakistan's economy, reported The News International.
Moreover, placing the onus of responsibility on past regimes as done recently by Prime Minister Shehbaz Sharif and Finance Minister Ishaq Dar, only promises to deepen the government-opposition divide over future economic policies.
The overall direction of Pakistan raises a pertinent question - exactly what is needed to resurrect what appears to be Pakistan's irreparable economy?
In an election year, mounting and deeply unpopular reforms to overcome present-day economic challenges are neither within the capacity of the ruling structure and other mainstream political parties nor their publicly verified vision, reported The News International.
An alternative framework must be built upon the Pakistani public's broad support to painful adjustments, notably seeking much more revenue than collected by the Pakistani state and steep cuts in imports alongside targeting of hitherto missing recovery in exports.
Following the State Bank's removal of a cap on Pakistan's foreign currency exchange rate, the steep drop in the value of the rupee is bound to add to an already high rate of inflation.
The change came shortly after the State Bank of Pakistan (SBP) raised its interest rate to 17 per cent as it sought to battle inflation hovering around 30 per cent.
In a sharp departure from Finance Minister Ishaq Dar's publicly repeated claims of keeping domestic fuel prices unchanged, Pakistanis must now brace for a hike in petrol and diesel prices in the coming days, reported The News International.
As petroleum products are imported in Pakistan, the rupee's devaluation must force not just a jump in domestic fuel prices, the resultant inflation is bound to hit a range of consumers from owners of private transport to public transport such as trucks and buses.
Besides, a jump in the price of diesel will inevitably add to the cost of production in agriculture and industry.
Eventually, though not of direct consequence to ordinary consumers, airlines are likely to raise the cost of domestic and international rupee-denominated airfares, reported The News International.
Moreover, the official rant of placing the guilt of Pakistan's present-day economic troubles upon the last government is neither true nor productive.
Dar came to the job in his latest tenure, promising to oversee the appreciation of the rupee to a rate of 200 rupees to a US dollar.
And the ultimate outcome in today's forex market is nothing but a massive departure from that ambition, reported The News International.
Also, a delayed return to the IMF's loan programme has cost Pakistan dearly in the past and is likely to do so in future.
The reported planned hike in domestic gas tariff of over 70 per cent is not just a sharp hit to consumers. Other areas set to be hit include more expensive imported raw materials for daily use items notably medicines, food items and consumer goods, reported The News International.
Additionally, with a massive circular debt surrounding the energy sector, a substantial jump in electricity costs is likely to come soon.
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