I s Pakistan staring at a similar crisis like Sri Lanka? Pakistan’s economy is on the edge of collapse. People are struggling to earn livelihoods. The floods in 2022 made the situation worse and put the country on the threshold of insolvency. No international funding agency or foreign nation associates are agreeing easily to extend financial assistance and loans to Pakistan now. It is wrestling with widespread blackouts, runaway inflation, depreciating currency and dipping foreign exchange reserves. Pakistan’s exports are declining. All this puts Pakistan in a very hazardous situation.
“What makes the crises in Pakistan today extremely worrisome is the domination of the political crisis over all other challenges and the resulting distraction from finding solutions to the more important economic and security issues,” said Ahmed Bilal Mehboob, president of the think tank Pakistan Institute of Legislative Development.
“Pakistan is on the brink of economic collapse,” said John Ciorciari, professor of research and policy engagement at the University of Michigan. “Pakistan’s economic situation is a direct reflection of the misplaced priorities of the country for decades,” said Kamal Madishetty, a researcher at the Institute of Peace and Conflict Studies in New Delhi. He pointed to the devastating control of the military over all other institutions as a crucial feature. There is heightened risk across the country and every major measure has taken a turn downhill. It is hard to see a channel to steadiness because the government’s rightfulness comes from its ability to manage the economy but the things are not going to get better in the predictable future.
So, what does it mean for common people of Pakistan?
Wheat is in short supply and as the long power outage across the country verified, electricity companies are struggling. They may soon run out of fuel to keep power generation units running, as forex reserves decline dangerously. The government raised the prices of diesel and petrol, imposing more desolation on the common man.
Rukhsana Bibi, who works as local help, earns a scanty Rs3,000 to Rs4,000 from every home says. “What we earn in a month, our expenses are double that. We are eating less, travelling less.”