17 Dec/17 Sunday
Last week Pakistan Rupee lost 5% of its value in a matter of three business days. As business houses around the world are looking for stable countries for investing, we are surrendering to the religious fanatics. Moreover, the CPEC a multi-billion-dollar investment of Chinese government in Pakistan seems to be favouring only one country i.e. China. It looks like trouble is brewing in an economy of Pakistan. Living in Pakistan it is difficult to assume that Politics and CPEC are leading Pakistan to Abyss.
Pakistan currency was given a higher value by artificial measures by State Bank of Pakistan. The movement it stopped supporting the slide was bound to happen. Foreign exchange reserves of Pakistan have dwindled to 30% before the central bank took a $2.5 billion dollar-denominated bonds. Pakistan’s exports have been falling for the past three years thanks to our support to hardliners, terrorists etc. This is leading Pakistan economy to Abyss. This support directly or indirectly makes business houses shaky and uncomfortable. Some of the exporters such as cotton might become competitive in the short term period due to this devaluation.
Export and Import Leading to Abyss
Due to the weak exports, Pakistan has a current account deficit of 4% of GDP in the last financial year. This year it is going to worsen further. From June to October this year it had doubled when compared to last year during the same period. But this is only half the story. The second half of the problem continuous imports in the name of CPEC from China. These imports are capital goods whose value has increased by 30% in the last two years. Now even IMF in its recent report seems to be worried about the expensive loans Pakistan has taken from China. These loans will become a burden as there is no export recovery in sight for Pakistan industry. Thus, leading Pakistan economy to Abyss.
Politics Leading to Abyss
The Federal Government of Pakistan has been propagating through selected officials that Pakistani private sector is all bullish about the CPEC project. However had it been true then the situation would have been better. The ground realities are different from what is preached by the Political leaders. The politicians influenced by Military have been meddling with business environment. We see every day one or other rally in the name of religion and subversive activity in economic hubs of Pakistan. This is sponsored directly or indirectly by Political bosses and then by the military. Power tariffs have not been rationalized to fuel growth. Many businesses have closed down due to the burden of power bills in Karachi and the frequent subversive activities.
The feudal lords and oligarchs along with military have been dominating the Pakistani Political environment. This has resulted in Pakistan becoming a purely import-dependent economy. Again leading Pakistan economy to Abyss.
Points to Ponder
With only five months from a general election, people of Pakistan will have to act maturely. The most powerful and popular politicians have been acting irresponsibly. They were charged with corruption and removed from offices. International terrorists have been trying to enter the mainstay of politics. Pakistan had seen constant street agitations by religious fanatics that have weakened the government’s authority. The strong military instead of siding the government supported the agitators thus sending wrong signals in international community. The decision to go with forces leading Pakistan economy to Abyss or to stand against them is with the people of Pakistan. The decision has to be taken in the next five months.