The war between Russia and Ukraine overstretched to an unimaginably prolonged pe­riod. It engulfed the entire world with its ripple effects. There is neither an immediate end nor a break in sight. As a result, global energy prices touched their peak once again. Logistics costs and commodities prices also shot up inexplicably, bringing economic hardship in many countries with the cost of liv­ing going up. Economic managers indicated that the serious financial woes would continue to prevail in the world at least for a year or so, thereby no respite is visible in near future for a significantly big popu­lation of the world. Different coun­tries are struggling to maintain stability in the economy. Bangla­desh is mulling and approaching the International Monetary Fund (IMF) for financial stability. Paki­stan has already been looking to reenter an IMF programme. Many established and developed econo­mies are also embracing the tough economic challenges, particularly the middle-income and lower-in­come segments.

Sri Lanka has already fallen into default for the first time in its his­tory. The country is affected by more internal than external issues. The present situation was trig­gered by a political and financial crisis which has taken its toll on the Sri Lankan economy. In the last couple of months, various startup companies including Airlift, Vava­cars, CarFirst, and Swvl have shut down their operations in Paki­stan. Other startups Truckin, Re­tailo Technologies and Dukan laid off their employees. Many compa­nies also rolled back their planned initiatives and operational verti­cals temporarily whereas a few im­plemented austerity measures in operations to prevent themselves from a crisis. These companies might have operations on a limited scale but the negative development not only affected the lives of hun­dreds of employees and their fam­ilies directly, but it also negatively impacted the business climate and sentiments of foreign investors. In recent weeks, two major telecom operators sounded alarm bells for an inconducive business climate revisiting their business strategies in Pakistan for the future. 

Major automobiles and mobile as­semblers also slowed down or sus­pended their operations on the back of unfavourable business situations. Two high-performing sectors, tex­tile and IT posted a quantum nega­tive growth in exports. More wors­ening, thunderstorms and torrential rains, and flooding hit the length and breadth of the country during the last few weeks. Many people have lost their precious lives in dif­ferent provinces. The infrastructure was damaged badly costing billions of Rupees to the national exche­quer and suspended economic and business activities in major com­mercial cities. Similar to Sri Lan­ka, the poor state of affairs in Pak­istan has not developed overnight but it has continued for the past six months with a political circus on­going in the country. 

And yet, there is no serious con­sideration or effort to stabilise the economy of the country, unfortu­nately. First, the government was toppled with the in-house transi­tion at the parliament and then in the biggest province. Then, a reac­tionary movement had become ac­tivated against the new coalition government. The political drama is unending with a new episode coming every week deepening the crisis ever more deteriorated. Amid a political tug and war be­tween the government allies and opposition parties, the econom­ic uncertainty is looming with no direction from the incumbent gov­ernment being put in place. Global rating agencies including Moody’s, Fitch, and S&P issued negative rat­ings about Pakistan. The country’s economic outlook changed from stable to negative.

A slight ray of hope could emerge if the coalition government and op­position agree to sign the charter of the economy to help take the coun­try out of the financial crisis. The policy measures under the char­ter of the economy should be tak­en concretely with the input of stakeholders should be taken into account. In this regard, the rep­resentatives of businessmen, indus­trialists, and multinational compa­nies should also join hands with the government to make a roadmap on a sustainable basis to navigate the crisis on the track of growth and stability. The Federation of Cham­ber of Commerce and Industries (FPCCI), Overseas Chamber of Com­merce and Industries (OCCI), and Pakistan Business Council (PBC) should come forward to give expert opinions to the federal government under an agreed roadmap for the recovery of economic stability of the country. Tough measures have to be taken to stabilise the ailing economy but these should not be limited to the masses in general, but its focus should be concentrated on the elite class including the curb of imports related to luxury and non-essential items. Imports substitu­tion should be given preference on a long-term basis. In this regard, an investor-friendly policy should be devised which could resume indus­trialisation in the country with the creation of new jobs and the trans­fer of technology at a local level. Our policymakers, economic man­agers, and the businessman frater­nity must be on the same page. It is because our economy needs quick fixes, energy emergencies, and out-of-box solutions on a war-footing basis. However, medium to long-term economic plans should be de­vised and implemented in tandem.

Muhammad Yasir

The writer is an analyst on business, technology, and communica-tions. He can be reached

@sirfyasir