economic crisis in pakistan essay in urdu

• Privacy Policy
• Our Authors
• Subscribe Us
• Google Plus

Essay Outline: Economic Crisis in Pakistan: Challenges and Prospects

Table of Contents

CSS Essay Outline: Economic Crisis in Pakistan: Challenges and Prospects

By: mureed hussain jasra (csp), introduction.

1. Global economic crisis 2. Economy of Pakistan at a crossroads 3. Causes of economic decay In Pakistan

Challenges of Economic Crisis in Pakistan

1. Dwindling foreign exchange reserves 2. Current account deficit increasing exponentially 3. Stagnant Small and Medium Enterprises (SMEs) 4. Reduced Foreign Direct Investment (FDIs) 5. Shameful picture on human development index 6. Social fabric of Pakistan torn by a never ending war on terror 7. Myopic financial policies leading to fiscal quandary of Pakistan: Relying on IMF 8. Regressive taxation exempting the wealthy and squeezing the poor of Pakistan 9. Clienteles politics directly conflicting progressive reforms in fiscal policy 10. Rampant corruption and money laundering further festering the economic crisis of Pakistan 11. Mass illiteracy: biggest hurdle in the way of producing a well-trained workforce concentration of wealth in a few hands

Prospects of Economic Crisis in Pakistan

1. Increasing political awareness translating into positive political will necessary for economic progress in Pakistan 2. Investment by foreign countries and individual 3. Peaceful environment due to curtailment of terrorism: conducive environment for economic stability in Pakistan 4. Burgeoning middle class auguring well for economic prognosis of Pakistan 5. Policy initiative keeping public opinion at the center: a sure way for a stable economy 6. China-Pakistan Economic Corridor (CPEC) as a harbinger of economic stability 7. Advances in science and technology 8. Continuation of democracy laying a frame work of stable Pakistan 9. A robust foreign policy centered on regional cooperation to achieve trade viability 10. Restoration of relation with neighboring countries

About the author

Mureed Hussain Jasra (CSP)

Mr. Mureed Hussain Jasra boasts of a diverse professional background. Being a Civil Servant, he has served at important positions in the Federal Secretariat and autonomous bodies dealing with the important policy level matters. Prior to joining Civil Service of Pakistan, he served as a lecturer of English in the Federal Government of Pakistan and won accolades in academic circles and intelligentsia for his professional commitment and devotion to work. Mureed Hussain Jasra's current fame among the CSS aspirants owes to his stellar success as being the most towering CSS coaching teacher and mentor. Under his careful mentorship, many young men and women have won distinctions in the CSS/PMS competitive examinations and are now serving the nation in different capacities. He regards teaching as the singular driving passion of his life and has founded Civil Services Preparatory School for the young aspirants. Mr. Jasra is an avid reader of books and loves debate on history, culture, literature and governance. He is Masters in English Literature.

You may also like

Essay Outline: Electoral Reforms in Pakistan:...

Health for All | Essay Outline for CSS PMS

Art and Morality Essay Outline

Instruction in Youth is Like Engraving in Stone |...

Essay Outline “Good Governance is deeply rooted in...

CSS Essay Outline | The Importance of Water...

Leave a comment x.

I want to ask something, plz answer if you have credible information. Is the paper pattern going to be changed from the next year? Will the exams of 2020 be as per Three Cluster System?

Programs submenu

Regions submenu, topics submenu, press briefing: previewing the g7 summit, strategic landpower dialogue: a conversation with gen james rainey, energy leadership conversation with wael sawan, securing medical supply chains – the role of transatlantic cooperation.

• Abshire-Inamori Leadership Academy
• Aerospace Security Project
• Africa Program
• Americas Program
• Arleigh A. Burke Chair in Strategy
• Asia Maritime Transparency Initiative
• Asia Program
• Australia Chair
• Brzezinski Chair in Global Security and Geostrategy
• Brzezinski Institute on Geostrategy
• Chair in U.S.-India Policy Studies
• China Power Project
• Chinese Business and Economics
• Defending Democratic Institutions
• Defense-Industrial Initiatives Group
• Defense 360
• Defense Budget Analysis
• Diversity and Leadership in International Affairs Project
• Economics Program
• Emeritus Chair in Strategy
• Energy Security and Climate Change Program
• Europe, Russia, and Eurasia Program
• Freeman Chair in China Studies
• Futures Lab
• Geoeconomic Council of Advisers
• Global Food and Water Security Program
• Global Health Policy Center
• Hess Center for New Frontiers
• Human Rights Initiative
• Humanitarian Agenda
• Intelligence, National Security, and Technology Program
• International Security Program
• Japan Chair
• Kissinger Chair
• Korea Chair
• Langone Chair in American Leadership
• Middle East Program
• Missile Defense Project
• Project on Critical Minerals Security
• Project on Fragility and Mobility
• Project on Nuclear Issues
• Project on Prosperity and Development
• Project on Trade and Technology
• Renewing American Innovation Project
• Scholl Chair in International Business
• Smart Women, Smart Power
• Southeast Asia Program
• Stephenson Ocean Security Project
• Strategic Technologies Program
• Transnational Threats Project
• Wadhwani Center for AI and Advanced Technologies
• All Regions
• Australia, New Zealand & Pacific
• Middle East
• Russia and Eurasia
• American Innovation
• Civic Education
• Climate Change
• Cybersecurity
• Defense Budget and Acquisition
• Defense and Security
• Energy and Sustainability
• Food Security
• Gender and International Security
• Geopolitics
• Global Health
• Human Rights
• Humanitarian Assistance
• Intelligence
• International Development
• Maritime Issues and Oceans
• Missile Defense
• Nuclear Issues
• Transnational Threats
• Water Security

An Economic Crisis in Pakistan Again: What’s Different This Time?

Photo: AAMIR QURESHI/AFP/Getty Images

Critical Questions by Daniel F. Runde and Ambassador Richard Olson

Published October 31, 2018

Pakistan’s newly-elected government is already dealing with a balance of payments crisis, which has been a consistent theme for the nation’s newly elected officials. Pakistan’s structural problems are homegrown, but what is different this time around is an added component of Chinese debt. Pakistan is the largest Belt and Road (BRI) partner adding another creditor to its already complicated economic situation.

Pakistan’s system is ill-equipped to make changes which would avoid future excessive debt. A bailout from the International Monetary Fund (IMF) is probably the safest bet for the country although it is unclear whether the United States will support the program. How Pakistan decides to handle its debt crisis could provide insight into how the U.S., IMF, and China will resolve development issues in the future. Beijing is a relatively new player in the development finance world so much is to be learned from how it deals with Pakistan and how it could possibly maneuver in other developing countries in Asia, Africa, and Latin America.

Q1: What is Pakistan’s current financial and economic situation?

A1: Pakistan held its most recent elections in July 2018. The Pakistan Tehreek-e-Insaf party gained over 100 seats in the parliament, and its founder Imran Khan , a famous cricket team captain, was installed as prime minister. Prime Minister Khan has inherited a balance of payments crisis , the third one in the last 10 years. By the end of June 2018, Pakistan had a current account deficit of $18 billion , nearly a 45 percent increase from an account deficit of $12.4 billion in 2017. Exorbitant imports (including those related to the China-Pakistan Economic Corridor (CPEC)) and less-than-projected inflows (export revenues and remittances) have led to a current account deficit widening, with foreign currency reserves levels covering less than two months of imports—pushing Pakistan towards a difficult economic situation .

Part of Pakistan’s financial crisis stems from the fact that 2018 was a poor year for emerging markets. Global monetary tightening, increased oil prices, and reduced investor confidence have negatively impacted the country’s already precarious economic situation. But the country’s deep structural problems and weak macroeconomic policies have further exposed the economy to an array of debt vulnerabilities.

Pakistan has had an overvalued exchange rate, low interest rates, and subdued inflation over the last few years. This loose monetary policy has led to high domestic demand, with two-thirds of Pakistan’s economic growth stemming from domestic consumption. An overvalued exchange rate has led to a very high level of imports and low level of exports. Pakistan’s high fiscal deficit was accelerated even further in 2017 and 2018 because elections have historically caused spending to rise (both of the most recent fiscal crises followed elections). Perhaps the greatest financial issues facing Pakistan are its pervasive tax evasion and chronically low level of domestic resource mobilization. Taxes in Pakistan comprise less than 10 percent of GDP , a far cry from the 35 percent of countries that are part of the Organisation for Economic Co-operation and Development (OECD). Pakistan also suffers from impediments in the energy sector through frequent and widespread power outages that hurt its competitiveness.

In Western media, Chinese investment is often cited as the main driver of Pakistan’s debt crisis. This is somewhat true as China’s BRI makes Pakistan a key partner through the shared CPEC. The CPEC is a $60 billion program of infrastructure, energy and communication projects that aims to improve connectivity in the region. CPEC infrastructure costs have certainly placed a greater debt burden on Pakistan, but the current structural problems are homegrown; the root cause of the energy shortages is now less a matter of power generation, and more of fiscal mismanagement of the power sector .

Q2: What are Pakistan’s options?

A2: Pakistan appears to be in perpetual crisis-mode, and for too long the Pakistani government has been overly reliant on U.S. bilateral assistance. While it may not be the first choice of the Pakistani government, an IMF bailout is the most likely outcome of this financial crisis because it is probably the only path for Pakistan to regain its macroeconomic stability. Any “bailout” from a bilateral donor (meaning China or Pakistan’s Gulf State friends, including Saudi Arabia which has recently provided Pakistan $3 billion for a period of one year as balance-of-payment support) will not get at the root issues that Pakistan faces—its loose macroeconomic, fiscal, and monetary policies. Pakistan needs to get its house in order and remedy many of its domestic economic issues. 18 out of Pakistan’s 21 IMF programs over the last 60 years have not been completed despite obtaining over $30 billion in financial support across those programs. Just like today’s current financial crisis, Pakistan’s last two IMF packages (in 2008 and 2013) were also negotiated by incoming governments.

Q3: Would the U.S. support a new IMF Pakistan program?

A3: The current U.S. administration and Congress would not be supportive of additional bilateral funding to Pakistan—meaning money coming directly from the United States. Since 2001, Pakistan has been the beneficiary of the U.S. Coalition Support Fund (CSF), which reimburses allies for costs incurred by war on terrorism. The CSF is used to reimburse Pakistan for U.S. military use of its network infrastructure (e.g., ports, railways, roads, airspace) so that the United States can prosecute the war in neighboring Afghanistan, as well as certain Pakistani military counter-terrorism operations. The CSF for Pakistan has been as high as $1.2 billion per year, and, in recent years, $900 million per year. With nearly $1 billion in CSF distributed every year, along with $335 million in humanitarian assistance, it will be difficult to convince Congress to appropriate more funds for a Pakistan bailout yet. However, due to inaction on the part of Pakistan to expel or arrest Taliban insurgents operating from Pakistani territory, the United States has recently cut another $300 million from the CSF, bringing the total to $850 million in U.S. assistance withheld from Pakistan this year. In fact, all security assistance to Pakistan, whether it is international military education and training, foreign military financing, or the CSF, has been suspended for this year according to one State Department official.

An IMF program for Pakistan faces resistance from some members of Congress. A group of 16 senators has already signed a letter to President Trump that outlines their opposition to bailing out Pakistan because the IMF package would, in effect, be bailing out Chinese banks.

The Trump administration has also taken a hardline stance towards assisting Pakistan with its financial crisis. Secretary of State Pompeo stated this past July that he would not support an IMF bailout that went towards paying off Chinese loans. In September, Secretary Pompeo visited Pakistan, and there were indications that the United States would not block an IMF program. If an IMF program is enacted, there is no doubt that it would have stronger conditionality and a greater insistence on full transparency of Pakistan’s debt obligations.

Q4: Would an IMF package be a bailout of the Chinese?

A4: The terms of Pakistan’s loans with China are currently unclear and multiple news outlets have reported that Pakistan has refused to share CPEC information with the IMF. However, it is not unreasonable to presume that the terms in those contracts would be more demanding than terms typically asked by the IMF. Unless the terms between Pakistan and China and its state-owned enterprises (SOEs) are disclosed and made clear to the IMF, then it is unwise for the IMF to proceed with a bailout package.

The IMF’s focus is not in projecting power and influence; rather it seeks to help struggling nations get back on their feet. The same cannot be said for China. China appears to be most interested in spreading its influence and gaining valuable assets for its military and expanding economy, while at the same time exporting its surplus capacity for infrastructure building. In its annual report to Congress, the Department of Defense reiterated this concern, “countries participating in BRI [such as Pakistan] could develop economic dependence on Chinese capital, which China could leverage to achieve its interests.”

Of Pakistan’s nearly $30 billion trade deficit, 30 percent is directly attributable to China . If China were concerned about the economic crisis in Pakistan, it would make immediate concessions which Pakistan Finance Minister Asad Umar says China is working on . To help with the crisis, China could readjust its trade surplus with Pakistan in different ways. For example, China could buy Pakistani cement and other purchases in the short term to illustrate that they are aware of and swiftly responding to the economic turmoil in Pakistan. Other nations have struggled with debt obligations to China. For instance, in July 2017, Sri Lanka signed over a 99-year lease for Hambantota Port to a Chinese SOE because of Sri Lanka’s inability to pay for BRI costs. Malaysia took a different path and decided to cancel major infrastructure projects with China in August 2018 due to worries that they would increase its debt burden .

Q5: What are the consequences if there is no IMF package?

A5: It is likely that China will provide even more assistance to broaden Pakistan’s dependency. Chinese banks and SOEs have already invested heavily into Pakistan, so much so that state bank loans have not been fully disclosed to the global community. In fact, Pakistan’s Status Report for July 2017 through June 2018 shows that Chinese commercial banks hold 53 percent of Pakistan’s outstanding commercial debt. However, that percentage may be even higher than the report depicts. While China and Pakistan have agreed to make all CPEC projects readily available to the public, the information is scattered and often left blank on essential financial reports (see July-June 2017 document ), and so it is difficult to obtain a full sense of the degree of Pakistan’s indebtedness to China. Again, much of the loan information provided by the Pakistani government, especially concerning China, is not entirely transparent.

If China chooses to follow through and become the “point person” for an assistance package, the pressure will be taken off the IMF. But, if the United States does not support an IMF package, it will forego major geopolitical potential in the region to its main competitor, China.

Pakistan represents a litmus test of all future cases in which the IMF, United States, China, and any emerging market country are all involved. Depending on how Beijing chooses to navigate Pakistan’s financial crisis, China may soon find itself responsible for rectifying the debt burdens of Zambia and many other BRI countries.

Q6: What are U.S. geopolitical “equities” in Pakistan?

A6:  The United States is invested in Pakistan because of its significant geopolitical importance.

• Pakistan is an important component of the balance of power in South Asia. Both India and Pakistan have nuclear weapons capabilities. Moreover, China, India, and Pakistan have been in dispute over the Kashmir region since 1947. Regional stability is in the interest of the United States.
• Despite its ambiguous stance on militant groups, Pakistan is ostensibly an ally of the United States because of its proximity to Afghanistan. Since the War on Terror began in 2001, Pakistan has been an active partner in the elimination of core al Qaeda within Pakistan and has facilitated aspects of the U.S. military campaign in Afghanistan.
• The United States now seeks a negotiated settlement to the conflict in Afghanistan. To accomplish this, perhaps the United States will come to Pakistan with a simple offer: “deliver the Taliban, and we will give you the IMF.”
• Whereas previous administrations may have tried to “play nice” with Pakistan, under the Trump administration, there is a chance that the U.S. government will push the IMF to adopt stricter terms for a Pakistan bailout, citing the Pakistani government’s failures of the last two programs.
• Other than strategic military importance, one of the most important national security challenges to the United States is Pakistan’s demographic trends. Currently, over 64 percent of Pakistanis are under the age of 30—the largest percentage of youth in the country’s history. Over the next 30 years, Pakistan’s population will increase by over 100 million, jumping from 190 million to 300 million by 2050 . The spike in youth population presents an opportunity for the U.S. government and private sector to increase investment in Pakistan. Pakistan’s economy must generate 1 million jobs annually for the next three decades and GDP growth rates must equal 7 percent or more per year to keep up with the population boom. Were Pakistan’s economy to collapse, the world would see the first instance of a failed state with a substantial arsenal of nuclear weapons.
• An economically healthy Pakistan could be a large market for U.S. goods and services. If the U.S.-Pakistan relationship is strained as a result of this financial crisis, it will not only harm the United States militarily but will also harm U.S. businesses and Pakistani consumers.

Q7: Should the U.S. support an IMF package to Pakistan?

A7: Given the geostrategic importance of Pakistan for the United States, we should support a package but with stronger conditionality than in 2013 along with full transparency and disclosure of its debt obligations.

Daniel F. Runde is senior vice president, director of the Project on Prosperity and Development, and holds the William A. Schreyer Chair in Global Analysis at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Richard Olson is a non-resident senior associate at CSIS. He is the former U.S. ambassador to the United Arab Emirates and Pakistan; most recently he served as the U.S. special representative for Afghanistan and Pakistan during the Obama administration. Special thanks to CSIS Project on Prosperity and Development program coordinator Owen Murphy and intern Austin Lucas for their contributions to this analysis.

Critical Questions   is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2018 by the Center for Strategic and International Studies. All rights reserved.

Daniel F. Runde

Ambassador richard olson, programs & projects.

• Project on U.S. Leadership in Development

• nawaiwaqt group
• Roznama Nawaiwaqt
• Waqt News TV
• Sunday Magazine
• Family Magazine
• Nidai Millat
• Mahnama Phool
• Today's Paper
• Newspaper Picks
• Top Stories
• Lifestyle & Entertainment
• International
• Editor's Picks
• News In Pictures
• Write for Us

Pakistan’s economic crisis

The situation of economic instability and uncertainty in the country is increasing, according to an unofficial survey, 60 percent of Pakistanis in the country have lost hope for a better future, which reflects the worst of the rulers. As a result of failed economic policies, Pakistan is continuously sinking into the quagmire. The fact is that none of the three major parties have any economic agenda to protect the country’s economy from threats and provide relief to the people. Inflation has broken all previous records. If we really look objectively, Muslim League, People’s Party and Tehreek-e-Insaf have insulted the mandate given to them by the people and have given nothing but disappointment to the people. The tragedy is that those who gave the speech of independence and self-reliance while misleading the nation have drowned the country’s economy. The entire economic system has been put under the control of the IMF. Due to 25% inflation this year, the GDP ratio was predicted to remain below the target level, after which it became difficult for the institutions to achieve the set targets. The strict implementation of the IMF’s strict conditions by Pakistani rulers has practically made life miserable. It feels like the caretaker government is working to fulfill the IMF’s agenda instead of representing and protecting the people. Today, the nation has reached the level it has reached. All three parties have an equal role in this. Until the country and the nation bring their real representatives to power, until that time these figures will continue to come in different forms and cloaks. It has become clear that the thinking of the rulers of Pakistan is slavish. The country and the nation do not expect good from these Ghulam Ibn Ghulam people. The electricity bills are being increased day by day due to fuel adjustment. The heavy bills have raised the cries of the people. In the face of huge increase in the bills day by day, the government continues to unleash anger on the people. After electricity, the price of gas has also been increased. On the one hand, the people are forced to pay electricity bills instead of buying ration for their homes, while on the other hand, the poor people who want to privatise the government institutions are forced to pay two times. They also want to deprive them of their bread and employment. If the ruling institutions cannot be fixed, cannot eradicate corruption from the institutions and cannot make them profitable, then how can these incompetents be expected to run the country? For economic stability in the country, the usurious economic system must be abolished. The usury system is the root of all problems. Pakistan’s textile sector is the backbone of the country’s economy, which accounts for 60% of the country’s total exports, 40% of employment in the manufacturing sector and 8.5% of the country’s GDP. This industry provides employment to 15 million people. But due to the reckless decisions of the rulers, every sector is heading towards destruction. 45% people are forced to live below the poverty level. According to the research report of a non-governmental organisation, more than 300 textile mills in the country are about to close due to continuous load shedding of electricity and gas, which will reduce the export of textiles by 300 million dollars per month. Incompetent, corrupt rulers and administration have brought the institutions to the brink of destruction. According to the Ministry of Finance, the total loss of the institutions this year has exceeded 500 billion rupees. Pakistan Railways, National Highway Authority, Pakistan International Airline, Pakistan Steel Mill and power generation companies are on the top among these institutions suffering from a loss of billions of rupees. which the government of Pakistan has to pay billions of rupees from the national exchequer every year to keep them active. 7,000 officers in PIA are brutally robbing the institution in the name of salaries and other benefits. In the world’s leading airlines, the ratio of employees to aircraft is 200 to 220 employees, while in PIA, the ratio of employees to aircraft is more than 500. The government wants to privatise the institutions to hide its failure. This will make millions of people unemployed. On the one hand, the total debt and loss of Pakistan Steel Mills was 526 billion rupees in July 2023, while on the other hand, the steel mill has been closed since 2015. Politically motivated recruitments took place in these institutions in every regime and the governance model of these institutions was not improved over time. There is no accountability and accountability process in any institution. It can be restored even without privatising the institutions, for this it is necessary to end the series of recruitments on political basis and to appoint qualified and capable people to the positions. About 450,000 people are employed in these loss-making institutions, who are making a loss of 5 billion rupees annually due to giving salaries and benefits, which is a big burden on the national exchequer.

7-day anti-polio drive starts in Khyber

Muhammad Imranul Haq

The writer is a Deputy Secretary Information of Jamaat-e-Islami Punjab and Chairman D Nine Media Forum Pakistan.

Related News

Gold policy: redefining foreign exchange reserves, blazing forests, another plastic ban, eu turns right, soft power and diplomacy, 44 terrorists arrested in punjab ibos during may: ctd, us expects israel will accept gaza ceasefire plan, punjab to ban plastic bags from june 5, dr helen becomes first christian woman brigadier in pakistan army, beijing ready to forcefully stop taiwan independence, warns china ..., beijing ready to forcefully stop taiwan independence, warns china defence chief, ji chief blames spineless muslim rulers for genocide in gaza, bisp mobile van facility opened in dik, kpra surpasses annual target for fy 2023-24, fir registered against 6 people for interfering in govt affairs, school bags distributed among poor students, kp speaker for suspension of uom’s provost, &proctor over student’s death, higher education cuts, pakistan needs revamped leadership, more democracy, the populism trap.

Dawn on Pakistan’s construction sector: ...

Dawn on pakistan’s construction sector: analyzing the ..., a night to remember: tale of a governor, a ..., a night to remember: tale of a governor, a tonga driver, ..., reviving pakistan's economy: solutions and ..., reviving pakistan's economy: solutions and strategies, iran and pakistan relations after ebrahim ..., iran and pakistan relations after ebrahim raisi, ‘stolen lives’: the dark reality of ..., ‘stolen lives’: the dark reality of human trafficking, protecting the digital, tatmadaw haunts myanmar, lack of parental support, disaster of overpopulation in pakistan, why x was blocked in pakistan, epaper - nawaiwaqt.

Newsletter Subscription

Advertisement.

NIPCO House, 4 - Shaharah e Fatima Jinnah,

Lahore, Pakistan

Tel: +92 42 36367580    |     Fax : +92 42 36367005

• Advertise With Us
• Privacy Policy

Nawaiwaqt Group | Copyright © 2024

Today's Paper | June 04, 2024

State of crisis.

MUCH of Pakistan’s political history has been about governance failures and missed opportunities. Political instability has been endemic with the country alternating between military interventions and civilian rule. Reforms that could have transformed the country and placed its economy on a high-growth and sustainable trajectory were repeatedly postponed as they would have threatened the ruling elite’s privileges and hold on power. Complicating the quest to address persistent economic, governance and security challenges was the impact of global and regional developments.

In fact, the external and internal has been so intertwined in Pakistan’s history as to multiply challenges and leave the country in a constant crisis management mode. The country’s ability to weather global and regional geopolitical storms was repeatedly tested. Dealing with their fallout for protracted periods from a state of economic and political fragility ended up emaciating and exhausting Pakistan.

Now a bold new book seeks to tell the Pakistan story from a new perspective. Mohammed Waseem is among Pakistan’s leading intellectuals and brings his many years in academia to bear on a work rich in insights. His latest book Political Conflict in Pakistan deploys, as its title indicates, the analytical construct of conflict to consider the country’s political experience in multiple dimensions. This is predicated on the hypothesis that political conflict in a postcolonial state like Pakistan is pervasive and the root of “a permanent crisis of governance”. This is because of the gap between the modern state and traditional society, between institutional design and practice and between “a ‘Western’ framework of authority and Islamic norms and practices”. He sees conflict as both disruptive and constructive of the social and political order.

The book draws on sociological perspectives and political science literature to argue that all politics is about conflict. This, he writes, challenges managers of the state. How they deal with contentious issues determines the country’s evolution. Discussing what he calls the “persistent and devastating” clash between two elite groups in Pakistan, the state elite and the political elite, he argues that these groups rest mainly on two power centres, the middle class and political class respectively. “The former is generally identified with the ‘establishment’, led by the army. The latter represents political parties and parliament, which draw on the constitutional edifice as the supreme source of legitimacy.”

Governance failures and the ruling elite’s resistance to reform have marked Pakistan’s political history.

This state of play, he writes, has led to a “bifocal nature of state authority”. The two represent opposing outlooks, visions, worldviews and policy orientations. “The middle-class narrative focuses on the national interest, but the political class’s idiom focuses on the public interest.” These two power centres define what Waseem calls the “mega conflict between the civil and military organs of state”. He offers an in-depth account of how political initiative has shifted between the state elite representing the middle class and the political class symbolised by leaders of political parties that engage in mass mobilisation through electoral activism.

Waseem argues that over the decades the establishment has tried to promote, support and impose its “preferred leadership” through the electoral process denuding the country of genuine public representatives. He sees a long history of manipulation of elections by extra-parliamentary forces to shape outcomes and says “the establishment’s preference for client parties contributed enormously to a weak and vulnerable party system in Pakistan”. He backs this up by naming numerous parties the establishment created and then supported.

Read: If establishment stays neutral, Imran can’t survive no-trust move: Bilawal

In a chapter titled ‘An Establishmentarian Democracy’ he deals with an issue as relevant today as in the past as it is among the country’s enduring fault lines. Asserting that democracy has been a major source of conflict he examines whether Pakistan’s present hybrid regime is democratic only in form and not substance. To support his claim that Pakistan is what he calls an ‘establishmentarian democracy’ Waseem first compares its experience to India’s and then seeks to show that the establishment was able to significantly shape the contours of democracy while the weak role of parliament contributed to this. Some may find this an overly cynical and sweeping view that accords the establishment more controlling power over the political system than is merited. But few would disagree with Waseem’s central proposition that the military’s dominant role “hampered the growth of democracy” or that civil-military conflict has been a constant theme. He acknowledges that “while the constitutional tradition has been too weak to stop military takeovers, it has been too strong to allow generals to rule in their own name for long”.

The book explores many other themes that have been recurrent in Pakistan’s political history including challenges of the federal project, sub-nationalist movements and Islamisation. There is an interesting analysis of partition in terms of two competing paradigms, one faith-based and the other resting on a shared past. It also delves into why conspiracy theories are embedded in the mindset of educated Pakistanis. Whether the left or right, ‘liberal’ or religious ‘thinking minds’, Waseem sees them all “display paranoia about international conspiracies to pressure, bully, corner or undo Pakistan”.

The book has a sweeping scope in examining the many facets of Pakistan’s story. But it would also have benefited from consideration of the country’s economic experience as that is inextricably linked to politics. After all, competition over scarce resources also shaped politics, influenced civil-military relations and fuelled centre-province tensions. A recurrent theme in Pakistan’s history, since at least the 1980s, has been the threat posed to financial and political stability by the budgetary resource crisis. An oligarchic elite relied on ‘borrowed’ growth and bailouts to address the country’s chronic financial crises and resisted meaningful reform that included taxing itself and its support base. The power elite also assumed ‘rentier’ characteristics: using political office to access state resources and thus acquire wealth and unearned income.

The enigma of successive civilian and military governments living beyond their means can only be explained in terms of a privilegentsia averse to measures that would either have eroded its position or threatened its interests. This has contributed to miring Pakistan in perpetual financial crisis with virtually every government in the past four decades leaving the economy in much worse shape for its successor.

The writer is a former ambassador to the US, UK & UN.

Published in Dawn, March 7th, 2022

'Ready for what I will do?' PM Imran warns opposition of consequences if no-confidence move fails

Former SAPM Nadeem Afzal Chan-ges party again, goes back to PPP

The ‘no-confidence’ scorecard

دبئی پراپرٹی لیکس میں سابق فوجی افسران کی جائیدادیں بھی شامل

دبئی لیکس: ریت پر محلات بنانے والی پاکستانی شخصیات

کون سے ممالک اسرائیل کو ہتھیار فراہم کرتے ہیں؟

T20 WorldCup: Is USA A New Challenge?

Imran’s Cypher Case Acquittal, Universities in Funding Crisis & Sargodha Mob Violence

Explained: Solar Net Metering In Pakistan

India Elections: A Third Term For Modi?

Let’s Talk About This: What’s Internalised Misogyny?

ICC Men’s T20 Worldcup: Preview

NASA Wants Time Zone On Moon: Here’s Why

Hush money trial: US Leaders, World Reacts To Trump Guilty Verdict

Latest stories.

Modi’s alliance dominates early in India election vote count, but opposition also gains

Uncertainty clouds budget presentation

Axe to fall on Public Works Department for chronic ‘failures’

‘Independents’ be allowed to pick party afresh, SC judge Mansoor Ali Shah suggests

US pushes Biden’s ‘old plan’ despite Israeli reservations

Labour poised for ‘biggest majority’ in 100 years

From Lahore to Bollywood: Heeramandi renewed for Season 2 with a twist

Pedalling for change — How cycling became a tool of liberation for Karachi’s women

Internet sensation Chahat Fateh Ali Khan to make cinematic debut in Sadqay this Eid

Most popular.

Expected cut in interest rate to push dollar value

Afghan cargo trucks enter Pakistan on TAD for first time

Uplift budget in tatters amid ‘misplaced priorities’.

Dr Helen Mary Roberts becomes first female brigadier of Pak Army from Christian community

Probe launched into murder of youth gunned down in Gulshan-i-Iqbal

Cartoon: 1 June, 2024

EU bar on Pakistani airlines ‘unchanged’

Large projects again.

Beijing ‘won’t allow war, chaos’ in Asia-Pacific

Editorial: Imran and Qureshi’s blunder was never reason enough to punish them under laws for traitors

India awaits an existential verdict

Equating criticism on social media with terrorism can undermine seriousness of violent threats

‘Joke of an allegation’: Legal eagles react to acquittal of Imran, Qureshi in cipher case

Why is Modi’s BJP obsessed with anti-Pakistan rhetoric this election cycle?

A changing world

Tyranny of learning

Monsoon menace

Federal funding for universities

Cipher acquittal, china sojourn, measles resurgence, local power, child-friendly courts, gaza in flames.

• All Stories
• Journalists
• Expert Advisories
• Media Contacts
• X (Twitter)
• Arts & Culture
• Business & Economy
• Education & Society
• Environment
• Law & Politics
• Science & Technology
• International
• Michigan Minds Podcast
• Michigan Stories
• 2024 Elections
• Artificial Intelligence
• Abortion Access
• Mental Health

Pakistan’s economic crisis

• Sonia Mishra

FACULTY Q&A

Pakistan is facing a multidimensional crisis. Its economy is teetering on collapse due to a possible political crisis, the rupee plummeting and inflation at decades-high levels, devastating floods, and a significant shortage of energy.

Offering his insight on the situation is John Ciorciari, professor and associate dean for research and policy engagement at the University of Michigan’s Gerald R. Ford School of Public Policy. He is also director of the Ford School’s International Policy Center and Weiser Diplomacy Center.

How bad is the economic crisis in Pakistan, especially after the floods?

Pakistan faces a severe economic crisis and clearly requires external support. Foreign exchange reserves are at dangerously low levels—enough to pay for only a few weeks’ worth of imports. Inflation is at its highest levels in decades, growth is sagging and the central bank has raised interest rates sharply to address a weak currency. Food and fuel prices are causing real pain to ordinary people, and the country’s economic challenges are only exacerbated by the devastation wrought by the floods.

The economy was struggling even before the floods. What are some of the other causes?

Pakistan’s economic crisis has numerous causes. Weak governance and political instability have been significant factors, weakening investor confidence in the country and contributing to corruption and pork-barrel politics that undermine the country’s fiscal position. Pakistan is also highly import-dependent, particularly with regard to energy, which renders it acutely vulnerable to hikes in global oil and gas prices. The pandemic did not help, and Pakistan’s tense relations with India continue to deprive it of a potentially transformative trading and investment partner.

The international community has pledged $9 billion to help them. Some of the biggest donors are Saudi Arabia and China. Do you think these governments will expect support in any way from Pakistan in return?

Donors such as China and Saudi Arabia may not include many explicit conditions to their aid, but implicit strings are always attached. China will look to Pakistan for favorable development opportunities, such as the energy corridor running from the Arabian Sea to China’s western provinces and the strategically vital port of Gwadar. China will also seek Pakistan’s support on geopolitical issues ranging from the Taiwan Strait to Afghanistan and Ukraine.

Saudi Arabia sees Pakistan not only as a key oil purchaser and source of migrant labor but also as a key Sunni-majority ally vis-à-vis Iran. Riyadh will expect Islamabad to support Saudi initiatives in the Persian Gulf and Saudi leadership stemming from its role as guardian of the holy sites of Mecca and Medina.

Is $9 billion enough to help them rebuild and make it out of the crisis?

Pakistan will need an infusion of more than $9 billion to climb out of the crisis. However, much should come from private sources. The value of IMF funds is to provide a stopgap, rebuilding confidence in a way that encourages private flows to resume.

Will Pakistan be able to protect itself from inevitable future climate disasters?

Pakistan is highly vulnerable to climate-linked disasters and cannot alone build a fortress against climate change. Stronger domestic preparedness and resilience are clearly needed, but ultimately Pakistan’s fortunes will hinge primarily on global progress to address the drivers of climate change.

Will all the money pledged to Pakistan be used towards flood recovery, or do you expect some might help their federal reserves that were at dangerous levels before the flood?

First and foremost, IMF funds will help Pakistan avoid default on its international obligations, which could have seismic consequences for its economy and its people. Replenishing foreign reserves is crucial in this regard. Aid programs will also help address the flood recovery, but this will be much more manageable if Pakistan’s reserves rise to levels that instill confidence in its ability to pay its debts.

412 Maynard St. Ann Arbor, MI 48109-1399 Email [email protected] Phone 734-764-7260 About Michigan News

• Engaged Michigan
• Global Michigan
• Michigan Medicine
• Public Affairs

Publications

• Michigan Today
• The University Record

Office of the Vice President for Communications © 2024 The Regents of the University of Michigan

CARBS Business Review

Pakistan’s economic crisis: unveiling the causes, impacts, and remedies, dr. ali sajjad, 30 october, 2023.

Pakistan has been grappling with an economic crisis in recent years, which is marked by high rates of inflation, a declining currency, and an increasing debt load. The country’s population has been significantly impacted by this crisis, with many people finding it challenging to meet their financial obligations. This blog will cover the reasons behind the current economic crisis, its effects on the nation, and potential solutions to the problem.

Causes of Crises

1 – external debt.

Pakistan’s current economic crisis is primarily caused by its external debt, which amounts to $126.3 billion. The country owes this debt to a wide range of creditors, including multilateral organizations, Paris Club nations, private and commercial lenders, and China. The growth of this debt load can be attributed to several factors such as excessive borrowing, slow growth, weak exports, and currency depreciation. Pakistan’s foreign exchange reserves are currently around $4 billion, which is insufficient to pay for even one month’s worth of imports.  As a result, there is a significant chance that the nation will not be able to pay its debts in full

2 – Inflation

Pakistan is currently facing a decline in the purchasing power of its populace and an increase in poverty due to a record-breaking inflation rate of over 25%. The rising costs of food, fuel, electricity, and imported goods are the primary causes of this inflation.  The government’s expansionary fiscal and monetary policies, which were implemented to boost the economy in the face of the COVID-19 pandemic, have further exacerbated the inflationary pressure.

3 – Energy Crises

Pakistan is currently dealing with a persistent energy crisis that has seriously hampered its ability to produce goods and expand its economy. The country relies heavily on imported petrol and oil, which are expensive and prone to price volatility. Unfortunately, poor management, corruption, and a lack of investment in renewable energy sources have resulted in insufficient and inefficient domestic energy production. As a result, Pakistan frequently experiences load shedding and power outages, which negatively affect millions of homes and businesses. The country’s GDP has decreased by up to 4% recently as a result of energy shortages.

4 – Political Instability

Pakistan’s financial instability is significantly impacted by its political instability. Frequent changes in government, governance, and political unrest have weakened foreign and domestic investor confidence. This has led to a decrease in foreign direct investment (FDI), causing capital flight and lowering the likelihood of economic growth. Exchange rate volatility, caused by political unrest, harms businesses that depend on stable exchange rates for international trade. Inconsistent economic policies and budgetary constraints lead to budget deficits and increased borrowing, elevating the risk of sovereign debt crises. Insecurity issues related to political instability, including terrorism and civil unrest, disrupt economic activities, deter foreign investment, and damage infrastructure, collectively contributing to economic and financial instability in Pakistan. The political uncertainty has undermined the confidence of investors, creditors, and the public in the government’s ability to address the economic challenges.

Consequences of Crises

1 – social unrest.

Due to the economic hardships the Pakistani people have experienced, there is a great deal of unhappiness and frustration, which has taken many different forms, including protests, strikes, riots, and violence. The social fabric and confidence in the government have been damaged by the rising cost of living, unemployment, inequality, and insecurity. The nation’s stability and unity are in danger as a result of the economic crisis’s escalation of ethnic, sectarian, and regional tensions.

2 – Security challenges

Pakistan’s current economic crisis has significantly weakened its capacity to address both internal and external security challenges. The country is currently grappling with a resurgence of terrorism perpetrated by various militant groups. These groups have exploited the economic crisis to further their nefarious activities, posing a significant threat to Pakistan’s stability and security.

3 – Regional implications

Significant effects of Pakistan’s economic crisis on regional stability and growth. Pakistan, a nuclear-armed nation with a population of more than 200 million, is very significant from a geopolitical standpoint. The potential collapse or instability of Pakistan’s economy could have significant repercussions for its neighbors and the global community.

Solutions to the Crisis

To address the economic crisis in Pakistan, the government and international community must act urgently and comprehensively. The following are some possible solutions:

1 – Debt relief

Pakistan may think about asking for debt relief from its creditors to lessen payback pressure and spend resources for growth. The government can negotiate a favorable debt rescheduling or restructuring with its creditors. Pakistan might also receive crucial financial aid and policy direction by asking the International Monetary Fund (IMF) for help in restarting the halted bailout program.

2 – Structural reforms

It is essential to put structural changes into place to address the underlying causes of Pakistan’s economic problems. To lower inflation, the budget deficit, and the national debt, the government should implement responsible fiscal and monetary policies. To increase revenue production and boost efficiency, it is essential to improve tax collection and expense management. Additionally, expanding export markets and encouraging the export sector can increase foreign exchange revenues. Reduced reliance on imported oil and gas can be achieved by making investments in the energy sector and the development of renewable energy.

3 – Political dialogue

Pakistan must resolve its political crisis through constructive dialogue and consensus-building. The government and the opposition should engage in a peaceful and productive dialogue to end their confrontation and find a mutually acceptable solution to their differences. The government and the opposition should also work together to address the economic challenges and implement the necessary reforms. Both parties must respect the rule of law, the constitution, and the democratic process to ensure the legitimacy and stability of the political system.

4 – International collaboration

By enlisting the aid of its allies and partners, including China, Saudi Arabia, Turkey, Iran, and the United States, Pakistan can improve its international collaboration. This may result in financial support, business opportunities, easier commerce, and technological breakthroughs. The government should also improve ties with its neighbors, especially with India and Afghanistan, to promote regional peace and cooperation. By taking part in regional initiatives, Pakistan can gain from regional connection and integration.

Guidelines to Write a Blog

Readers Also Viewed These Items

International Conference on Management Research

Sustainable tourism – challenges and opportunities for pakistan.

CARBS Industrial Insights

Exploring the trends and innovation shaping the future of business in pakistan.

Dr. Ali Sajjad is currently working as an Assistant Professor at Chaudhary Abdul Rehman Business School, Superior University. From the University of Utara Malaysia, he obtained a PhD in Banking and Finance. Moreover, he is a researcher having years of teaching and research experience. He has several publications and his area of research is accounting, finance, entrepreneurship and Islamic finance.

Please note that all opinions, views, statements, and facts conveyed in the article are solely those of the author and do not necessarily represent the official policy or position of Chaudhry Abdul Rehman Business School (CARBS). CARBS assumes no liability or responsibility for any errors or omissions in the content. When interpreting and applying the information provided in the article, readers are advised to use their own discretion and judgement.

If you are interested to write for CARBS Business Review Contact us !

Recommended For You

Are the boycotts against major corporate brands making an impact on peace in Gaza

Navigating the Landscape of Corporate Social Responsibility (CSR): “Building a better Future Together”

Navigating the Storm: Climate Consequences and Its Impact on Economic Activities

Connect with us, quick links, information about, newsletters.

©2024. All Rights Reserved. Developed and Maintained By Office of Research, Innovation & Commercialization ORIC, The Superior University Lahore

• Superior University
• Soar to Roar
• Our Research Ecosystem
• 3U1M Program
• Fee and Scholarship
• Sports and Fitness
• Employer Registration
• Contact Details

Information For

• Prospective Undergraduates
• Prospective Postgraduates
• Current Students
• International Students
• Exchange Students
• International Partnerships
• Academic Partnerships
• Get in Touch
• Convocation 2024
• Superior Employability Center
• Giving to Superior University
• Our Campuses

Office of Research, Innovation & Commercialization (ORIC)

©2023. Superior University. All Rights Reserved.

Pakistan: Five major issues to watch in 2023

Subscribe to the center for middle east policy newsletter, madiha afzal madiha afzal fellow - foreign policy , center for middle east policy , strobe talbott center for security, strategy, and technology @madihaafzal.

January 13, 2023

1. Political instability, polarization, and an election year

Politics will likely consume much of Pakistan’s time and attention in 2023, as it did in 2022. The country’s turn to political instability last spring did not end with a dramatic no-confidence vote in parliament last April that ousted then Pakistani Prime Minister Imran Khan from office. Instability and polarization have only heightened since then: Khan has led a popular opposition movement against the incumbent coalition government and the military, staging a series of large rallies across the country through the year.

The struggle for power in Pakistan continues into 2023. While the incumbent government has not ceded to Khan’s demand for early elections, country-wide elections are constitutionally mandated to be held by October this year. It benefits the government politically to hold them off as long as it possibly can as it tries to dig itself out of Pakistan’s urgent economic crisis and its lackluster domestic performance (its diplomatic foreign policy approach has fared better, but that may not matter for elections). The last year has cost it precious political capital, and Khan’s party did very well in a set of by-elections held in July and October. The state has tried to mire Khan and his party in legal cases, relying on a familiar playbook used against opposition politicians in Pakistan, albeit to limited effect, with the courts’ involvement.

Khan’s party still controls two of Pakistan’s four provinces, Punjab and Khyber Pakhtunkhwa (KP), and the incumbent federal government’s (extra-legal) efforts to try to wrest power from it in Punjab, the largest province, have been unsuccessful (thanks to the courts). The year is off to a dramatic start, with Khan’s party initiating the process to dissolve the Punjab and KP assemblies this month to pressure the federal government into early elections.

For politics-obsessed Pakistan, the biggest question remains who will win the next general election. Will former Prime Minister Nawaz Sharif (brother of current Prime Minister Shehbaz Sharif) return to Pakistan to run as the head of his party, the PML-N? Can Imran Khan win on the strength of his popular support, despite his confrontation with the military? Regardless of the outcome, we can say this much given the histories of the main contenders: The direction of the country is unlikely to change.

2. A precarious economic situation

Pakistan’s economy has been in crisis for months, predating the summer’s catastrophic floods. Inflation is backbreaking, the rupee’s value has fallen sharply, and its foreign reserves have now dropped to the precariously low level of $4.3 billion, enough to cover only one month’s worth of imports, raising the possibility of default.

An economic crisis comes around every few years in Pakistan, borne out of an economy that doesn’t produce enough and spends too much, and is thus reliant on external debt. Every successive crisis is worse as the debt bill gets larger and payments become due. This year, internal political instability and the flooding catastrophe have worsened it. There is a significant external element to the crisis as well, with rising global food and fuel prices in the wake of Russia’s war in Ukraine. The combination of all these factors has spelled perhaps the greatest economic challenge Pakistan has ever seen. Yet the government has been mired in politicking, and the release of a $1.1 billion loan tranche from the International Monetary Fund (IMF) remains stalled as Islamabad has pushed back on the IMF’s conditions. The government has now resorted to limiting imports and shutting down malls and wedding halls early, small measures that fail to adequately address the problem.

Related Books

Madiha Afzal

January 2, 2018

Stephen P. Cohen

November 4, 2011

August 9, 2006

Pakistan may end up avoiding default for the time being with IMF help and loans from friendly countries, especially Saudi Arabia and other Gulf nations. But those won’t address the clear underlying malaise of the economy – and the fact that something fundamentally will need to change, in terms of how much the economy produces versus how much it spends, to avoid default down the road. But none of Pakistan’s political parties seem to have the political will or ability to bring about such change.

Pakistan must reportedly pay back $73 billion by 2025; it won’t be able to do so without debt restructuring.

3. Flood recovery

A “ monsoon on steroids ” – directly linked to climate change – caused a summer of flooding in Pakistan so catastrophic that it has repeatedly been described as biblical. It left a third of the country under water – submerging entire villages – killed more than 1,700, destroyed homes, infrastructure, and vast cropland, and left millions displaced.

More than four months after the worst of the flooding, nearly 90,000 people are still displaced from their homes, and the floodwater is still standing in some areas. It would be enormously difficult for any country to recover from such a disaster and rebuild lost infrastructure, including roads and schools, let alone a government dealing with a cash crunch like Pakistan’s.

But the Pakistani government – in particular the foreign minister Bilawal Bhutto Zardari, who has visited the United States twice since the summer, and the minister for climate change, Sherry Rehman – has done an admirable job bringing awareness of the flooding catastrophe to the world stage. A donors’ conference Sharif co-hosted with the United Nations Secretary General Antonio Guterres in Geneva this month raised pledges for more than $9 billion for flood recovery over the next three years (the money is mostly in the form of project loans). Pakistan has also played an important role in discussions about the devastating effects of climate change on developing nations, spearheading the effort to place loss and damage on the agenda at COP27 for the first time, and pushing for COP delegates in Egypt to agree to a loss and damage fund.

With billions of dollars in help promised, the government has passed one hurdle. But the road for recovery ahead will be tough: Displaced people are still sleeping under open skies in Sindh province. Implementing a sustainable recovery will require enormous capacity, resources, and transparency in a country already mired in other troubles.

4. Mounting insecurity

The Pakistani Taliban (or TTP), the terrorist group responsible for killing tens of thousands of Pakistanis from 2007 to 2014, have been emboldened – predictably so – by a Taliban-ruled Afghanistan, and once again pose a threat to Pakistan, albeit in a geographically limited region (for now). The group engaged in at least 150 attacks in Pakistan last year, mostly in the northwest. Because the TTP have sanctuary in Afghanistan, the Pakistani state increasingly finds itself out of options when it comes to dealing effectively with the group. The state’s negotiations with the TTP have failed repeatedly, as they are bound to, because the group is fundamentally opposed to the notion of the Pakistani state and constitution as it exists today. The Afghan Taliban have, unsurprisingly, also not proved to be of help in dealing with the TTP – and Pakistan’s relations with the Afghan Taliban have deteriorated significantly at the same time over other issues, including the border dividing the two countries.

At this point, Pakistan’s first preference will be to strike kinetically at TTP targets within its borders, but that will be limited by TTP movement across the border into Afghanistan. That movement is what leaves Pakistan with the difficult-to-resolve TTP issue and complicates things beyond the military operation it launched against the group in 2014. Still, the Pakistani Taliban at this point is not the biggest threat Pakistan faces, given the country’s major political and economic challenges – but left unchecked, it could morph into a significant crisis.

5. Civil-military relations

Pakistan has a new chief of army staff as of November 29 last year. General Asim Munir replaced General Qamar Javed Bajwa, who had held the all-powerful post for six years (due to a three-year extension). The appointment of the army chief was a subject of considerable political contention last year; a major part of the reason Khan was ousted from power was his falling out with the military on questions over the appointments of top army officials.

All eyes are now on how civil-military relations shape up under Munir. Under Bajwa, the military solidified its control over all manner of policy behind the scenes. Bajwa presided over a close “same-page” relationship with Khan; when that frayed, the PML-N was eager to take Khan’s place as the military’s ally and head of the civilian government. Bajwa left office saying the army would no longer be involved in political matters; few in Pakistan believe him. With politics set to dominate the agenda this year and an election imminent, Munir has a chance to show the country whether he will follow in his predecessor’s footsteps, or chart a new course for civil-military relations in Pakistan. Pakistan’s history indicates the former.

Related Content

May 20, 2022

Bruce Riedel, Madiha Afzal

April 22, 2022

February 11, 2022

U.S. Foreign Policy

Foreign Policy

Afghanistan Pakistan

Center for Middle East Policy

April 3, 2024

Online Only

10:00 am - 11:00 am EST

May 26, 2023

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

Economic crisis in Pakistan - ESSAY

Related Papers

Adnan Nasir , Dr. Abid G. Chaudhry

The analysis of economic crisis indicates that there is a considerable shift of public resources from social sector to defense sector and security affairs. This shift has changed the development priorities and financial resources have been taken away from socio-economic sector. Supply bottlenecks including gas and power load shedding are considered as a major factor affecting private investment and economic growth. Terrorism has taken a high toll on Pakistan’s economy which leads to slow economic growth, low investment, high rate of inflation, and higher levels of fiscal deficits. Low economic growth and decline in private investment also leads to higher rate of unemployment, which further aggravated the economic situation of the country.

Dr. Naveed Iqbal Chaudhry

Terrorism is one of the most disastrous problems being faced by Pakistan from decades. It has been continuously hollowing country’s social and economic structure with great intensity and frequency. Poor law and order situation of Pakistan is hanging like a sword on its social and economic growth. Investors are afraid to invest in country due to unpredictable and horrible conditions disturbing economy at many fronts.GDP of Pakistan suffers the most from this chronic problem. The lucrative market of Pakistan is also depriving from the deserved foreign investment that comes in the form of Foreign Direct investment (FDI) inflow due to poor law and order situation and political instability prevailing in the country. The purpose of this study is to examine the impact of terrorism on GDP and FDI of Pakistan. The methodology adopted for study includes both descriptive and statistical procedures to check out the relationship in which we incorporated the data of last decade to get reliable re...

Muhammad khan

This paper highlights the present scenario of economic situation in Pakistan. Some of the main factors behind economic turmoil and than addressing these economic problems .

Abdul Rehman

The present research paper aims to study on Pakistan economy and current big challenges to Pakistan economy. A stable economy of any country plays an important and vital role in any nation’s collective prosperity and development. In Pakistan some of the areas are economically backward and underdeveloped. The economy of Pakistan has been undergoing a stabilization phase since the last three years. The restoration of macroeconomic stability is and necessary to provide the platform for generating growth, jobs, and improving the quality of life of the people.

Muhammad Shahid Dayo

Ishrat Hussain

During the last five years, Pakistan has traversed the road from a difficult default situation on its external payments to a vigilant program under the International Monetary Fund and finally reestablished access to international capital markets. GDP growth rate has exceeded 6 percent, inflation had remained under control for four out of five years, fiscal deficit has been reduced significantly, public debt ratios have declined, external debt burden has been lowered, exchange rate has remained stable, exports have almost doubled, tax revenues are recording double digit growth, interest rates had never been at such low levels in the history, remittances of Pakistanis overseas have multiplied by a factor of four, foreign exchange reserves have expanded twelve times from their 1999 level and unemployment is on a downward slide.

Muhammad Waheed

THE LAHORE JOURNAL OF ECONOMICS

Inayat Mangla

This paper analyzes the impact of the macroeconomic environment on Pakistan’s manufacturing sector, emphasizing in particular the role of fiscal and monetary policies in shaping incentives for industrial investment. Arguably, Pakistan’s macroeconomic fundamentals in the last two decades have remained fragile, resulting in severe macroeconomic imbalances that have contributed to macroeconomic instability and hampered private investment in aggregate as well as in the manufacturing sector. Furthermore, macroeconomic stabilization policies have often failed to produce the desired results owing to the lack of coordination between monetary and fiscal policies. Pakistan’s economy has thus lived on borrowed money and time and on rent-seeking behavior. Although some recent macroeconomic indicators have improved slightly, fundamental weaknesses remain. In particular, the recent improvement in the current account deficit was driven largely by the high inflow of remittances, coupled with financ...

Sohail Ahmad

A Complete essay to Get extra marks in CSS PMS

RELATED PAPERS

Lesly Villagomez

Environment and History 25.1 (2019): 146–150

Yaron J. Balslev (PhD)

一比一制作UMSL毕业证 hti

Neveléstudomány

Valéria Juhász

Ecologia Aplicada

Horacio de la Cruz Silva

Eduardo López-Seguí

bioRxiv (Cold Spring Harbor Laboratory)

Pavee Vasnarungruengkul

IEEE Symposium Conference Record Nuclear Science 2004.

Yuni Dewaraja

Kaushar Ali

Dr. RAMNARAYAN KAHAR

Evaluasi: Jurnal Manajemen Pendidikan Islam

abrar rizqa febriyani

Diversity and equality in health and care

Paula McGee

Techniques in Coloproctology

Alexandros Mekras

Revista Cubana de Medicina Intensiva y Emergencias

Ernesto Sanchez de la Rosa

Fluid Dynamics

Konstantin Nadolin

Bulletin of Electrical Engineering and Informatics

European Journal of Pharmaceutical Sciences

Annette Bauer-brandl

Hypertension

Etto Eringa

Engineering Structures

maria repetto

Journal of Experimental Agriculture International

Messias Pereira

22nd International Conference and Exhibition on Electricity Distribution (CIRED 2013)

Mark McGranaghan

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

• Work & Careers
• Life & Arts

Become an FT subscriber

Try unlimited access only $1 for 4 weeks.

Then $75 per month. Complete digital access to quality FT journalism on any device. Cancel anytime during your trial.

• Global news & analysis
• Expert opinion
• Special features
• FirstFT newsletter
• Videos & Podcasts
• Android & iOS app
• FT Edit app
• 10 gift articles per month

Explore more offers.

Standard digital.

• FT Digital Edition

Premium Digital

Print + premium digital, ft professional, weekend print + standard digital, weekend print + premium digital.

Essential digital access to quality FT journalism on any device. Pay a year upfront and save 20%.

• Global news & analysis
• Exclusive FT analysis
• FT App on Android & iOS
• FirstFT: the day's biggest stories
• 20+ curated newsletters
• Follow topics & set alerts with myFT
• FT Videos & Podcasts
• 20 monthly gift articles to share
• Lex: FT's flagship investment column
• 15+ Premium newsletters by leading experts
• FT Digital Edition: our digitised print edition
• Weekday Print Edition
• Videos & Podcasts
• Premium newsletters
• 10 additional gift articles per month
• FT Weekend Print delivery
• Everything in Standard Digital
• Everything in Premium Digital

Complete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.

• 10 monthly gift articles to share
• Everything in Print
• Make and share highlights
• FT Workspace
• Markets data widget
• Subscription Manager
• Workflow integrations
• Occasional readers go free
• Volume discount

Terms & Conditions apply

Explore our full range of subscriptions.

Why the ft.

See why over a million readers pay to read the Financial Times.

International Edition

• IAS Preparation
• UPSC Preparation Strategy
• Pakistan Economic Crisis UPSC Notes

Pakistan Economic Crisis [UPSC Notes]

Pakistan, India’s neighbour, has been in a tight spot over its economy for some time now. Amidst very high inflation and extremely low forex reserves, the country has been denied further funds from the International Monetary Fund (IMF). This is an important development in international affairs and is hence a relevant topic for the IAS exam . In this article, you can read all the latest about the economic crisis in Pakistan.

A delegation from the IMF arrived in Pakistan to attempt last-ditch negotiations to restart crucial financial aid that has been frozen for months. As Pakistan fights a worsening economic crisis, the country’s prime minister claimed that the government would have to accept “beyond imagination” IMF bailout requirements. For fear of reaction before the upcoming elections in October 2023, the Pakistani administration has refused to implement the tax increases and subsidy reductions that the IMF has required.

Economic Crisis in Pakistan Explained

The Pakistani economy is in dire straits as explained below.

• High Inflation: Pakistan experienced a high inflation in 2022 of about 24.5%. The percentage was about 29% higher in rural Pakistan.
• High Indebtedness: Pakistan has long struggled with a number of issues; its current condition is not new. Due to this, Pakistan is heavily indebted to friendly countries and the International Monetary Fund (IMF).
• Weak External Position : Pakistan was finally taken off the Financial Action Task Force ( FATF ) grey list in 2022, after being on it for many years. This had an impact on Pakistan’s standing globally and led to the imposition of several economic sanctions.
• Food Crisis: The cost of perishable foods has increased by over 56%. In Pakistan, the cost of wheat flour has been steadily rising to uncomfortable proportions.
• Rising Terrorism: In an effort to split Pakistan into two countries, Tehreek-e-Taliban Pakistan (TTP) has increased its terrorist activities there since 2022.

Crisis in Pakistan Causes

Some of the major reasons for the current situation in Pakistan are:

• 2022 floods: The floods in Pakistan in 2022 cost the nation an unprecedented $3 billion in damages, destroyed essential infrastructure, uprooted 8 million people, and reduced domestic output.
• Economic policies that are inconsistent and procyclical : Many of Pakistan’s growth-enhancing initiatives came at the expense of growing vulnerabilities and enduring structural and institutional shortcomings.
• Local problems: According to analysts, Pakistan’s distribution challenges are more of a concern than its insufficient supply levels, which have led to shortages and price increases.

IMF Bailout Package for Pakistan

• A nation is in serious economic trouble when it approaches the IMF for a loan.
• To pay for imports and loan repayments in particular, it lacks sufficient foreign currency (or “dollars”). 
• Basically, the nation is unable to pay its debts abroad. It hence requires a bailout.
• But the IMF will set some restrictions. Spending less, both at home and abroad, is a fundamental requirement.
• Increasing energy rates
• Imposing more taxes
• Artificial control over the exchange rate

About Extended Fund Facility (EFF):

• It was created to help nations dealing with severe payment imbalances brought on by structural barriers, poor growth, and an inherent weak balance-of-payments position.
• It offers support for comprehensive initiatives that include the regulations required to permanently address structural inequalities.
• It serves to assist national economic plans aimed at achieving macroeconomic stability and sustainability in line with robust and long-lasting poverty reduction and growth.
• The Extended Credit Facility (ECF) might also act as a catalyst for new international aid.
• It is accessible to all member nations that meet the requirements of the Poverty Reduction and Growth Trust (PRGT) and have a persistent Balance of Payments (BOP) issue.
• Assistance under an Extended Credit Facility (ECF) agreement is given for an initial period of three to five years, with a five-year overall maximum.
• Additional ECF arrangements may be approved after the expiration, cancellation, or termination of an ECF arrangement.
• Under the ECF, member nations consent to put in place a series of measures that will advance them toward a long-term, stable, and sustainable macroeconomic position.
• The letter of intent from the nation outlines these pledges in detail, along with any additional terms.

Pakistan Economic Crisis Explained:- Download PDF Here

Leave a Comment Cancel reply

Your Mobile number and Email id will not be published. Required fields are marked *

Request OTP on Voice Call

Post My Comment

IAS 2024 - Your dream can come true!

Download the ultimate guide to upsc cse preparation, register with byju's & download free pdfs, register with byju's & watch live videos.

You get wide range of high quality services from our professional team

Finished Papers

Don’t Drown In Assignments — Hire an Essay Writer to Help!

Does a pile of essay writing prevent you from sleeping at night? We know the feeling. But we also know how to help it. Whenever you have an assignment coming your way, shoot our 24/7 support a message or fill in the quick 10-minute request form on our site. Our essay help exists to make your life stress-free, while still having a 4.0 GPA. When you pay for an essay, you pay not only for high-quality work but for a smooth experience. Our bonuses are what keep our clients coming back for more. Receive a free originality report, have direct contact with your writer, have our 24/7 support team by your side, and have the privilege to receive as many revisions as required.

We have the ultimate collection of writers in our portfolio, so once you ask us to write my essay, we can find you the most fitting one according to your topic. The perks of having highly qualified writers don't end there. We are able to help each and every client coming our way as we have specialists to take on the easiest and the hardest tasks. Whatever essay writing you need help with, let it be astronomy or geography, we got you covered! If you have a hard time selecting your writer, contact our friendly 24/7 support team and they will find you the most suitable one. Once your writer begins the work, we strongly suggest you stay in touch with them through a personal encrypted chat to make any clarifications or edits on the go. Even if miscommunications do happen and you aren't satisfied with the initial work, we can make endless revisions and present you with more drafts ASAP. Payment-free of course. Another reason why working with us will benefit your academic growth is our extensive set of bonuses. We offer a free originality report, title, and reference page, along with the previously mentioned limitless revisions.

Our Top Proficient Writers At Your Essays Service

Total price, how it works.