The world has been invaded by the
corona force which crippled the world and is attacking every country without
discrimination. We learned about this force’s attack through the media and
China, who was the prime target. In my second article, I had stated that it did
not originate in China but the US. This question still prevails; where did it
originate? I am sure that one day its reality will be uncovered and that is why
I immediately wrote to Secretary-General UN to form a high-powered commission
for investigation.
I have written a number of articles
on economic analysis but this time I will show that the number of fears I had
expressed in my previous articles on the international economy have also been
confirmed by economists. The IMF itself has confirmed my prediction by recently
stating that “The coronavirus crisis will leave a lasting impact on the global
economy and most countries will see their economies being 5 percent smaller
than planned even after a quick recovery in 2021.” Economists are also
predicting that this year would be the worst global economic contraction since
the Great Depression of 1929/1930s. If it is a manmade virus, then it is
certainly a motivated and well-planned action to further control international
resources and push weaker economies to become weaker and if it is natural then
it is certainly a curse and the world has to revisit the world’s economy to at
least let poor nations of the world survive to start the new life once again. Our
present economic indicators show that the inflation rate is 13 percent, which
is too high. Our growth is below 2.2 percent, even though the government is
claiming 3.3 by the end of 2020 which is nothing but merely a claim. Such
euphoric claims have been made by previous governments as well, and this
government should get out of the fudged estimate era.
As indicated above, our empire of the
country is built on all types of loans that even our country’s airports/roads
or buildings are not spared from being mortgaged to international financial institutions.
Let there be no doubt that we the
Pakistanis must know that most of our infrastructure is mortgaged to the world.
Hence, we cannot expect that in the present situation created by successive
financial scientists, we will be able to pull the country out of this deep
mud-ridden problem. We can clearly see that we are under the heavy load of
internal debt of Rs32 trillion from borrowing, and private banks’ businesses
are flourishing on interest rate. We have new a mafia with the name of the
“foreign currency mafia” who are too powerful and too close to the decision
makers. The country will note that local borrowing will increase by tenfold
during and post coronavirus and the government will let it happen and will
close its eyes to money laundering. It will also witness massive money
laundering in construction sectors. According to the reports, most of the money
will fly to the US, UAE and to Europe and this scandal of impunity in massive
money laundering will haunt us at various international forums including FATF
and it will be used by our enemies worldwide. I am not criticising anyone; only
providing a timely warning to decision makers. Our external debt is $107
billion and the IMF has already demanded its loan back and is likely to
continue to increase its pressure for return of this huge sum they gave us; it
has excluded us from the list of corona-affected countries. Our economy is slipping
because of bad management, increase in debts, instability, inflation and
irreparable financial damages due to poor governance.
As a student of investigation, I can
see the behaviour of economic indicators which are indicating further slide of
the economy and also signalling that the rupee will further slip while the
dollar will disappear from the market. The currency mafia will bring the dollar
out on their own terms and this time they may make more profit by the further
increase of Rs10 against a dollar. Also, many in the finance ministry and the
State Bank will make hay while the dollar will shine with its mighty power in
the hands of the powerful sitting in the corridors of power. In these worsening
situations, all you need is a strong administrator and good managers to control
the economy.
During and post the coronavirus
economic syndrome, there will be a further major shock to our economy and
unfortunately, there is no visible plan to handle it.
Our only hope is the agriculture
sector and if no attention is paid to increase yield then it will add to the
miseries in the economy. The experts are expecting a very deadly attack of
locusts in Punjab and Sindh and partly in KPK. I hope the government will pay
attention to this. Mr Farhan Bukhari has painted the picture of real fear in
the agriculture sector and its impacts.
The stock market is also consistently
under pressure and it is dropping in value because of general economic distress
and a few playing it from Karachi who are never punished for their frauds and
loss of public money under the cover of big names. There has been a significant
decline in foreign exchange reserves and more than 7 percent depreciation in
the value of the Rupee.
Our medium-scale businesses are
cursed with a high rate of interest and fears created by investigative
agencies. It looks like the small business community will be shutting down or
will go for bankruptcy.
Consumption will reduce and more
money will be drawn out of the companies account, some will be able to survive
but the smallest companies will be eliminated in the coming months.
Let us examine if our economy will
survive from national bankruptcy or not, due to this continued sliding and a
lot of unfortunate deadweight under various internal and external pressures. As
a nation, we hope to survive from international bankruptcy but the mid-business
community will not be able to survive from it because of a sudden stoppage of
industrial and production activities. Unfortunately, the wheels which generate
the economic activities and abilities have now come to a standstill due to
COVID-19 and this pandemic has shut transport, from the train service to the
aviation service; tourism has also gone down to zero in the country with
shutting the airlines. The countries with the technocratic authoritarian model
as China, Japan, Singapore and to some extent South Korea are dealing more
effectively with the virus than democratic ones in the West and South Asia.
These countries have efficiently tackled the elements of disinformation in
society to stop the spread of chaos and panic. While on the other hand, people
in democratic societies who care about freedom, privacy, and individual rights,
are much worried about their freedom after COVID-19 is over.
The situation of the pandemic
predicts that the Gross Domestic Product (GDP) of the United States and China
will decline by 2.4 percent, Japan by 2.7, Germany by 3.6 and the Russian
economy will decline by 4.8%. In April 2020, almost every G20 member state made
an attempt to minimize the coronavirus pandemic effects for their respective
nations. Do we see a positive economic prediction post-corona for Pakistan? No.
whereas other countries are continuously working on their projected economic
figures. We are likely to undergo heavy losses and our survival will only be
possible if we get relief from IMF for at least 10 years and if China shares
half the burden to help us work out a formula to generate more income from
CPEC. It is to be noted that a high global recession will directly hit us.
The Article was published in The Nation on April 17, 2020, Link to the original article is: https://nation.com.pk/17-Apr-2020/global-economic-meltdown
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