After weeks of high political drama, Imran Khan was ousted through a No-Confidence Motion (NCM) in the National Assembly of Pakistan by a foreign conspiracy of regime change as he claimed. He followed suit of all the previous Pakistani PMs whose terms ended prematurely and became the first-ever Pakistani Prime Minister to be ousted in such a manner. With him now gone, Combined Opposition Leader, Shehbaz Sharif, of Pakistan Muslim League-Nawaz (PML-N) was selected, and he took oath as the next Prime Minister and he got some serious challenges to face. |
After some promise in 2021-22, the economy is back on a troubling track. Managing it will be a considerable challenge. Pakistan’s expanding import-export balance, crippling debt, rupee’s all-time low nosedive against the US dollar, sky-rocketing inflation, and shrinking reserves are key areas that necessitate immediate attention.
Pakistan, today, is a nation mired in mind-boggling debts and has millions of children who have no access to education, and millions more who are semi-educated and have no jobs. Its population is exploding and water, electricity and just basic cost of living and food prices have rocketed, so much so, that millions are being added to the below the poverty line, ranks.
Currently, Pakistan’s inflation rate has accelerated to 13.37% – the second-highest in Asia after Sri Lanka, which recently declared bankruptcy and at present is embroiled in political turmoil. Moreover, as Pakistan repays loans to avoid burgeoning interest rates, the State Bank of Pakistan reserves have decreased by $190 million to $10.308 billion – enough to support approximately two months of imports. In addition, the rupee is trading at its lowest, and the bourse also witnessed one of the steepest drops in its history as it tumbled five percent in just over two months. Finally, commodity prices are also soaring, and the weekly sensitive price index that defines inflation is 15.85% up.
Prime Minister Shehbaz Sharif faces a crucial few weeks when he must end fuel subsidies and convince the International Monetary Fund he’s doing enough to win a bailout, while ousted premier Imran Khan threatens new protests amid soaring inflation.
A fuel-price review is due May 15 and the leader faces a “very difficult” decision on raising the prices of gasoline and diesel, Ishaq Dar, a senior leader of Sharif’s party, told reporters Monday. Meanwhile, Khan -- who as premier had capped pump prices until June by providing a subsidy of more than 300 billion rupees ($1.6 billion) -- has warned he will lead two million people to march on the capital to demand new elections immediately.
The people are grappling with double-digit inflation, as well as wage and job losses, as macroeconomic indicators decline. All these indicators led to stagnation of growth and fewer prospects of genuine improvement. Confronted with these challenges, PM Shahbaz and his team travelled across the world to seek financial leverage from the IMF, Saudi Arabia, and UAE. Unfortunately, no quick help was available.
During Dr Miftah’s trip to Washington, it was claimed that IMF had agreed to add another $2 billion to the current program where the previous PTI govt had only availed $3 billion since June 2019 and $3 billion were to be received till September 2022.
Dr Miftah Ismail had initially demanded a new program from IMF, but sources privy to the developments claim that IMF was not ready for that and instead suggested providing the additional US $2 billion in funds. However, the IMF team that was supposed to arrive in Islamabad on or before 10th May to finalize details has not come and is not arriving at all.
IMF team now wants to meet a Pakistani team in Doha on 18th May – and that too only once Shahbaz Sharif government ends the subsidies on petrol and diesel.
SYED TAHIR RASHDI,
Sindh.