The government efforts to make the
rupee sustainable against the dollar are being carried out artificially: buying
out dollars from the open market against the internal borrowing through private
banks and printing of currency. It is impossible to stabilize the economy with
12.93% of inflation at a much lower growth rate with a large budget deficit. I
am worried to see the current situation of our economy as the USA will not let
Pakistan out of the FATF Grey List with several unreasonable objections,
i.e., terror financing and money laundering unless we take some really
aggressive measures. I discuss here the ground realities of the present crisis
which we are facing. Kindly see how the uncontrolled worsening economy is
directly affecting our common man and national economic growth.
When a nation goes into
self-denial on grave national issues, society starts getting polarised on
almost all internal and external affairs. We all have to realize that the
the country is facing severe challenges, including the rapid destabilization of the
economy.
The recent price hike has hit the
masses, and a high rate of inflation of 12.93 is highly alarming. And it is
a significant indicator that there are going to be more price hikes. However,
the income slab of the lower middle class and the poor are likely to remain
static. The middle and upper-middle-class are going to face the same.
There is no doubt in saying that a
the common man has fewer needs as compared to the elite class, but the present
the price hike has made the life of all factions of society miserable in Pakistan.
Unfortunately, according to the latest poverty estimates of 2019, 24% of
Pakistan’s population lives below the national poverty line, which includes 31%
in rural areas and 13% in urban areas. Moreover, 39% of our population
experiences multidimensional poverty. We are being driven towards a situation where
even the middle class is being pushed towards poverty.
The reports also state that over
two-thirds of people in Ex FATA (73 percent) and Balochistan (71 percent)
live in multidimensional poverty. Poverty in Khyber Pakhtunkhwa stands at 49
percent, Gilgit-Baltistan and Sindh at 43 percent, Punjab at 31 percent and
Azad Jammu and Kashmir at 25 percent, which means none of the provinces is
free of growing poverty.
It is regrettable to know that
Pakistan’s ranking on the ‘Global Competitiveness Report 2019’ has dropped to
110th during the tenure of the current government from 107th recorded during
the previous government. It has slipped from three positions below from last
year’s 107th, and it means more social-economic issues will make the ordinary
people restless.
Instead of eliminating poverty
from the country, the poor families are forced to push their children into child
labor which is a gross violation of human rights and also the children are
deprived of education because of this economic distress. This should be a grave
concern for the government that needs to look into it and a child support
the program must be launched without further delay.
We are having a profoundly
negative reputation as a country of the worst child labor offenders as more
than 12.5 million children are involved in child labor in Pakistan. And there
are hardly any steps taken by the government to put an end to it. It is
happening because of economic distress.
The uneven distribution of wealth
has created serious class distinction among the masses, which is breeding
interclass friction. The poor masses are watching social injustices, and it is
giving rise to crime as the deprived class takes law in their hands and
resorting to crime. The trend of suicide cases is also increasing
The rulers must know that such a
the socially distressed class can rise out of sheer dispersion and may revolt to
ask for justice through mass agitation hence the government should work out to
plan for immediate relief packaged for the common man to reduce his sufferings.
82% of the wealth in Pakistan is
sucked by the rich class of the country making wealth distribution highly
unequal and varied making the top rich 10% of the population earning 27.6%
whereas 10 % lower class including common man earns only 4.1% of the total
income. The minimum wage for unskilled workers in our country ranges from only
Rs 15,000 to Rs 17,500 a month, which is insufficient for even a small family
to pull through the month.
The general concept of our country
is that the rulers have less time for the welfare of people and more time for
their own self and fir their political survival were this consistent economic
distress is an aggregate of inconsistent and inefficient policies designed for
poor masses, and it is further attributing public into crises leading to
unrest.
The new government had
underestimated the potential challenges before taking over the charge and
made unrealistic and false promises to eliminate poverty within one year to
attract the voters.
The government imposed 17% taxes
on raw goods and material which has affected the manufacturing industries and
a city like Faisalabad is currently facing a serious crisis were more than 100k
labors have lost their jobs, and it is not the story of just one city as the
major cities are also facing the same problem.
This kind of situation will
attribute to the reduction of our exports eventually. Pakistan had already lost
the grey cloth market because of many unwise sudden decisions that have hit all
the industries in Pakistan.
The government has been an utter
disappointment in terms of health as well. Over 25 thousand dengue cases have
been reported so far: 6,537 from Islamabad, 5,642 from Punjab, 4,403 from
Sindh, 4,276 from Khyber Pakhtunkhwa and 2,750 from Balochistan. But the
government has kept criminal silence over it. Since the problem has been
completely ignored by the authorities, according to the experts this issue is
going to worsen next year.
The education sector is worst of
all as it has become a big business whereas the standard is gone down
unchecked. It is worth noting that the government has confessed that the
illiteracy rate is still 58%. The education sector is also in tatters as the
government has hardly paid any attention to it. Instead of providing free or
subsidized education, it is being noticed that the education business mafia is
being allowed to make money from this basic right of every growing child.
The post-education
employment/career opportunities are the basic tools to groom and keep the
students engaged. According to the IMF, Pakistan’s Unemployment Rate is
forecasted to be 6.140 % in Dec 2019, which records an increase from the last
reported number of 6.079 % in Dec 2018. Surprisingly, the number of the
people/youth who are either graduates or postgraduates has no job, and
according to reports, 1.5 million have lost their jobs with worsening economy recent
policies announced by the government which includes extra taxes and banking
restriction and high rate of bank interests. The businessmen are running away
to other countries, and the capital is flying out.
The provision of jobs and the
increase in economic growth is done by the business community which has been
hit the most with the various government’s sudden actions that have directly
hit their business, and it is not a healthy sign for the country.
The businessman is now under
pressure because of more banking restrictions recently imposed, which has
resulted in an 8% fall in industries and cash has been withdrawn from the banks
the businessman is resorting to cash dealings.
I am a supporter of a broader tax
net, but it should have been done in stages and not overnight announcements
imposing of extra restrains.
The tight SOS monetary PTI policy
under the direction of IMF has led to the contraction of large-scale
manufacturing industries for the first time in 10 years. The government cut
energy subsidies, making petroleum and diesel more expensive while increasing
gas prices by 335%. Besides, the State Bank of Pakistan (SBP), increased the
key monetary rate from 8.5 percent in October 2018 to 13.25 percent in July
2019. While the interest rates have been increased in line with the IMF’s
requirements and to rein in inflation, higher interest rates also discourage private
investments and dry up liquidity in the system, leading to lower consumption
and hence, lower GDP growth. While the government was estimating a 6.2 percent
GDP growth in FY2019, Pakistan’s GDP came down to 3.29 percent, as compared to
5.8 percent in the past year.
Foreign direct investment inflows
have slumped in the past year—a massive 59 percent drop, i.e., $73.4 million.
Fiscal deficit, which is the difference between the government’s income and
expenditure, was at a three-decade high of 8.9 percent when expressed as a
percentage of GDP, going up from 6.6 percent last year.
PTI government is not doing enough
to counteract the country’s economic situation with solid policies. The
Pakistani rupee weakened by 33 percent against the dollar, going from Rs 121
for a dollar in 2018 to Rs165 to a dollar in 2019. A weak rupee means goods
become cheaper for overseas buyers, and exporters get more rupees for their
dollar earnings, but Pakistan’s exports declined by 1.9 percent in the fiscal
year instead of increasing due to devalued currency. The reduction in rupee’s
value did not help as it was not backed by strong policies and lost control on
the currency mafias operation in the banks and including some in the ministry
of Finance and private dollar mafia.
According to reports, the external
the debt of Pakistan had reached up to $106 billion up till Sept 2019, while the
borrowing from the scheduled banks jumped by 99 percent within a week ended on
Sept 13 making an increase of Rs443.5 billion to Rs899bn.
I would like to state that concern
authorities instead of seeing flashy presentations on colored slides by some
bureaucrats and ministers on every sector, especially related to the masses are
misleading. It is the need of the time to see the reality on the ground where
& how the poor people living in mud houses in villages where even a child
of the common man is unable to use simply an electric bulb being too expensive
to do his school homework. The nation will not remember & judge this
government from its economic performance and the quality of governance.
It is my sad prediction that this
the government will cut its own life unless it initiated smart moves to revive the
derailed economy and the rule of law not by lip services but real practical
steps to get the country out of present crises.
Pakistan is already facing 5th
generation warfare imposed by India and its associates and their main targets
are our economy, both west & East borders and water resources. The economy
is primarily being hit through FATF as a good economy is a symbol of stability
which they don’t want Pakistan to have a sound economy. The government needs to
focus on the economy as the top priority.
According to the State Bank’s
latest report, Federal government debt stock stood at Rs32.197 trillion by
October end, versus Rs31.787tr in June this year. In contrast, the same figure
at the end of October 2018 was reported Rs25.839tr, from Rs24.212tr in June of the
same year. How can we say this as a healthy economy based on massive internal
& extern borrowing? It is unfortunate to see this state of affairs of our
economy and the government is giving loans to the public under various schemes
from the loans obtained from private banks. This is, again, an indirect burden
on the people.
The nation has a big question that
despite having all precious resources and minerals, why still our country is being
graded as inferior and below the poverty line?
Let us pray to Almighty Allah for
prosperous Pakistan and that He grants us the strength to fight our challenges.
Pakistan Zindabad.
The article was published in THE NATION on December 8th, 2019, link to the original article is https://nation.com.pk/08-Dec-2019/heading-toward-disorder
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