Pakistan is on the brink of collapse as the crisis in socio-political sectors intensified with the lack of leadership and financial crunch. President trump’s decision to drop the talks with Taliban will be a big blow to Pakistan as the generals are portraying Taliban as “good terrorists” versus bad terrorist brigade of Al Qaueda and ISIS to get funds from the US. A special report by Dr Sakariya Kareem
Pakistan Prime Minister Imran Khan, accompanied by Foreign Minister Shah Mahmood Qureshi, will visit Saudi Arabia on September 19. The mission is an attempt to get some billions immediately. As Kashmir issue failed to gather support from any of the Islamic countries, the country’s leadership has no other option to follow the normal routine to get some funds.
But Qureshi is trying to save face by linking all the meetings with Kashmir. Addressing the All Parties Kashmir Conference in Lahore, Qureshi said: “We have important sittings over there. Keeping those sittings at the forefront, we will have to deliberate on further measures. I think it is enough to say just this right now.”
The world is watching Mr Qureshi. A look at some of the economic figures can show how long could Pakistan sustain itself. In the last year, the public debt and liabilities have shot upfrom Rs 30 trillion to Rs 40 trillion, an increase of Rs 10 trillion in one year. Compare this figure to another data—in the first 71 years of Pakistan, total debt and liabilities totalled Rs 30 trillion. In the last year alone, there was a one-third increase in that figure. On top of it, there is no explanation for this massive upsurge in debt.
The failure to comply FATF conditions and zero assurance from the US on funds linked with troops withdrawal from Afghanistan making the things worse. All weather friend China is also hesitant to release funds as FATF closely monitoring the fund allocations. Taming terrorism is everybody’s business now and any association with any activities will undermine the credibility of the country on global stage. China will hesitate to release any funds to Pakistan by annoying FATH as they need the support of global players to control the unrest at Hong Kong. Millions are still on protest in the city seeking democratic rights.
Imran Khan is trying to win Saudi’s support by sharing his sorrows over the Houthi attack on the oil facilities. Khan expressed Pakistan’s support for Saudi Arabia and “its full stand with all its potentials in confronting these sabotage acts which threaten the global economy and the Kingdom’s security”.
He called Saudi Crown Prince Mohammed bin Salman over the telephone and shared his country’s sorrow. discussed bilateral and regional matters, specifically focusing on the attacks on the oil facilities at Abqaiq in Saudi Arabia.This is the third time that the two leaders have spoken over the phone since August, as Prime Minister Khan continues to raise the issue of Kashmir at different platforms. But nobody supported his calls. Even his own people protested against him at Muzaffarabad during the much publicised Jalsa. “Go Niazi Go Back,” drawn the scream for Kashmir liberation!
People are feeling the pinch of economic hardships in the country. If recent economic data are any indicator, Pakistan is close to sinking like the Titanic.
The economy was already sinking when a desperate Khan caved into the IMF demands in exchange for a breather of $6 billion. The IMF, which promises to shore up the failing economy, has set up some of the most difficult and challenging targets. Getting close to these targets alone could prove to be Pakistan’s last straw.
The situation is very terrible now. In the last year, the public debt and liabilities have shot upfrom Rs 30 trillion to Rs 40 trillion, an increase of Rs 10 trillion in one year. Compare this figure to another data—in the first 71 years of Pakistan, total debt and liabilities totalled Rs 30 trillion. In the last year alone, there was a one-third increase in that figure. On top of it, there is no explanation for this massive upsurge in debt.
The second noteworthy statistics is from the industry. The industry has been for months struggling to come out of collapsing demand and rising cost of doing business in Pakistan. There has been, for instance, 30 per cent decline in sales in several manufacturing sectors. This has followed a contraction of 54 per cent in large-scale manufacturing sector which has been reeling under heavy pile-up of inventory and massive lay-offs. There are equally dismal reports of slow-down from key sectors like cement, steel and automobiles.
So far Pakistan has managed to keep its economy floating mostly by borrowing from a large number of countries in Western Europe and the Middle East. China is largest creditor. Besides these countries, Pakistan has sought help from a host of international institutions. In May when it sought out the IMF for help, it was the 23rd time it had gone begging at the IMF doorstep. As a result, today Pakistan’s debts are over $85 billion.
The IMF bail-out has only added to this burden in many other ways. For instance, Pakistan must increase its revenues by about 40 per cent to meet the IMF conditions for the loan. In other words, Pakistan will have to increase its taxation and its foreign exchange reserves to repay its debts. With global slowdown worsening and Pakistan’s manufacturing sector falling behind, it would require a miracle to keep up with the IMF conditions.
Other conditions are almost equally impossible to meet. Pakistan must pay back $37.359 billion in external debt within the duration of the IMF bailout deal. Of this, $14.682 billion is owed to China alone as part of the China-Pakistan Economic Corridor (CPEC) project.
Although there is no plan in sight to raise the external reserves, what is going to hit the ordinary citizens is the need to hike revenue collection to an additional 1.5 trillion rupee and 1.31 trillion rupee in the next two years. It would mean a heavy tax burden, an overbearing tax regime and no hope for any miracle to save the country from the impending doom.