Pakistan braces for a cold, hard economic downturn


Thank God for the glorious weather in Islamabad at the moment. For everything else seems shrouded in bleak despondency, especially the economy.

There has been a sharp hike in fuel, electricity and gas prices, not to mention the rising cost of food. The Pakistan Tehrik-e-Insaaf (PTI) government has already issued several warnings of tough times ahead, blaming the past government for mismanagement of the economy and spiralling debt. As is wont of all incoming governments, the previous office holders are the pall bearers of the gigantic burden of woes that comes with assuming power. For the poisoned chalice is at once alluring and toxic. And so, the story goes…

imran khan

The international Monetary Fund has been approached yet again, despite vehement vows by PTI chairman and Prime Minister Imran khan in the recent past to shun the international lending body if he came to power.

There is, as bluntly put by the premier, no money to run the country.”

He has asked for patience to allow the PTI to chalk a way out of the financial crisis and rid the country of the need to ever extend the begging bowl. But it’s not just the financial crisis, there are innumerable ones rearing their ugly little heads. The energy crisis, the water crisis, which is indeed alarming, and of course the governance crisis. And a lot of blame game and complaints.

According to the prime minister, the country’s powerful bureaucracy is not cooperating with the government rendering its administrative prowess impotent. The reason being given is the bureaucrats’ allegiance to the previous government for having being given plum appointments.

But this is all part and parcel of the political system and it is something the PTI should have been prepared for. By harking on about all the failings and blockades it faces, the government has only managed to affect its own credibility. There is only a sense of steady deterioration of confidence in the government’s ability to steer the country out of the current mess.   And with no clear-cut roadmap for the next five years, the bull in the china shop is not one to be appeased by anything less than a clear way out.

The finance minister Asad Umer’s ongoing floundering and consequent attempts at reassurance that this is the last call on the IMF’s door have added to the confusion.

Asad Umar

Asad Umar, Pakistan’s Finance Minister

Pakistan at this point is seeking one of the largest bailout packages, which is yet to be finalised.  For one, the China Pakistan Economic Corridor, (CPEC) project is under scrutiny by the IMF, that wants details of the all debt, especially Chinese, that has been incurred by Pakistan. With the United States also flexing its muscles on the decision of the IMF package being sought by Pakistan, Umer will have to devise a strategic plan to balance a) Pakistan’s imperative needs in line with its national interests, B) the commitments to China for CPEC projects falling under the China Belt and Road Initiative and C) the anticipated tough conditions Pakistan is to face from the IMF.

Similarly, Pakistan’s trade balance is a gaping monstrosity and needs to be addressed on an urgent basis. Other grandiose plans promising millions of homes for the poor sound great, but if studied, lack any concrete footing except verbal commitments to provide a feasible environment for attracting investors to work on this scheme. Foreign investment is very welcome at this point as is the remittances and trust of overseas Pakistanis willing to invest in government-led projects, but there is much that needs to be done to ensure that this goes through. Foremost of these is confidence building and certainty. The government is lacking both at this point.

Thus, despite the ubiquitous attempts of the PTI government at blaming its policies or lack of on past failures, it should be cognisant of the detrimental impact of continuing to do so.  It had been quick to raise a hue and cry over everything under the previous government and waxing lyrical about what changes they would bring to fix the economy. Where are those plans now? The PTI government should have been well prepared before stepping on to the quicksand they call government, but the only thing evident is sinking confusion. Lest they forget, it would be wise to remember that people can only tolerate for so long and allow so much. And it is expected to get worse.

Faryal LeghariPainful inflation, electricity and gas outages and exorbitant energy prices are likely to bite harder with the seasonal change. 

And while the trees don their mantle of gold and rusts and autumn slips into winter, the nights ahead would be cold and dark. 

It is crucial to inspire, instill confidence and implement. Procrastination would only hasten the worst. 

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