Challenges and opportunities

Pakistan today stands at a crossroad. We are faced with the most severe challenges in our 61 year history. But this is not the first time we have been confronted with challenges. We have faced numerous challenges before, and we have come out of these challenges if we stood united as a nation. The 1947 partition, the 1965 war, the 1971 war and break-up of Pakistan, the 2005 earthquake, and the Dec 27, 2007 tragedy.

Foremost of all, we are confronted with the security, law and order, militancy, extremism and terrorism situation. In FATA, there is a war going on between militants and locals, between foreign fighters and locals, and between militants and our armed forces. Then there is intrusion by foreign forces, both by land and air, coupled with cross border terrorism. Who knows who is fighting who? The International Red Cross Committee (IRCC) has declared Pakistan a war zone. Then from Khyber to Karachi, there are suicide bombers, striking hotels, airports, cinemas, shopping centres, embassies - you name it. There are kidnappings of diplomats and foreign engineers. It appears a beehive of terrorists that has been let loose, and there is smell of fear and death everywhere.

There is insurgency in Balochistan, which has its roots from the days of the Kalat insurgency, the guerrilla war of the 70's, and the assassination of Nawab Akbar Bugti. Some are fighting for their rights within Pakistan, yet there are other groups asking for independence. Today even most national parties feel Balochistan has been deprived of its resources. Then there is a complete collapse of the social fabric: crime in cities and rural areas, kidnappings, dacoities, robberies, mobile and car snatching, murders, rapes, siyah kari, karo kari, burying of women alive, elderly captivated in chains, you name it and the list is endless.

Then there is the financial crisis. The KSE 100 has fallen by over 36 percent since last year, from 14,500 to 9,300. Only in the last three months $540 million have been ejected from the stock market. Forex reserves have deflated from $16 billion to $9 billion, equivalent of two months of imports. The rupee has devalued by over 30 percent against the US dollar, from Rs 60 to Rs 78. The trade deficit has swelled to $22 billion, from $13 billion last year, mostly due to heavy import bill from oil and food, Oil imports are now $12 billion, about 30 percent of the total imports of $40 billion.

The food inflation is running at 34 percent, which is pinching the poorest the most, while the consumer price index is over 25 percent hurting businesses. Fiscal deficit is 7.7 percent of the GDP, or Rs 777 billion, against a budgeted target of 4.2 percent. Current account deficit is $14 billion, or 8.6 percent of the GDP, which is what we need to avert a financial collapse.