Pakistan has been witnessing unprecedented economic challenges in last few years. These challenges have brought the country on the brink of economic collapse. But thanks to the armed forces and previous PDM government for averting the threat of default and stabilize the country, despite massive rise in inflation. In past 5 years, Pakistan has seen government two Prime Ministers i-e Imran Khan and Shehbaz Sharif. During Imran Khan’s tenure, Pakistan faced a range of economic challenges and fluctuations. When Imran Khan took office, Pakistan was going in right direction economically. The country was projected to become member of G-20 economies. However, after the takeover of Imran Khan as Premier, the situation had changed drastically.
In order to stabilize the economy, Imran Khan’s government entered into an agreement with the International Monetary Fund (IMF) for a bailout package. The IMF program came with conditions such as fiscal austerity measures, subsidy cuts, and structural reforms. However, Imran Khan’s government violated the agreement of IMF by providing populist subsidies to the masses, which severely damaged economic growth and created currency crisis. One of the major concerns during Khan’s tenure was the high inflation rate, which significantly affected the cost of living for the general population.
Likewise, his government implemented various fiscal measures to increase revenue and reduce the budget deficit. These measures included tax reforms, efforts to broaden the tax base, and reduction of non-development expenditures. PTI government initiated a number of public projects, including the “Ehsaas” social welfare program aimed at providing financial assistance to low-income families. Additionally, efforts were made to improve governance and transparency through institutional reforms.
During PTI’s tenure, Pakistani rupee underwent periods of depreciation against major foreign currencies, impacting import costs. The country’s external debt remained a concern, and efforts were made to manage and reduce it.
Likewise, the PTI government failed to stop rising inflation, which ultimately instigated public opinion against the Imran Khan’s economic policies. As a result of that, opposition parties decided to bring vote of no confidence against PM Imran Khan, which ultimately succeeded.
After the ouster of Imran Khan from power through constitutional vote of no confidence, Shehbaz Sharif became PM. He faced daunting challenge of taking Pakistan out of the economic turmoil. His administration worked with all the stakeholder to initiate economic reforms in order to take Pakistan out of the economic mess. Finance Minister Ishaq Dar imposed stringent tax measure for revenue generations. After 1 year of hiatus, PDM government convinced IMF for bailout package and signed standby agreement with the global money lender.
ECONOMIC INDICATORS (PMLN, PTI AND PDM)
|GDP in Billions
|Foreign Reserves ($ Bn)
|Remittances (USD Billion)
|Total revenue to GDP ratio
|Current Account Deficit
|The debt servicing cost in Trillion
Source: Pakistan Bureau of Statistic
The tenures of Shehbaz Sharif and Imran Khan marred by the allegations of political victimization and dwindling economic situation. Both sides have been accusing each other of putting the country on the brink of default. It was fascinating to see how Imran Khan and other party leaders carefully used the selective figures to support his narrative. Imran Khan compared the current prices of several commodities with that in March 2022. But he failed to mention in his speeches that Pakistanis experienced a high inflation rate in his 44-month rule. The inflation rate went from 4.8 per cent in 2018 to 13.9 per cent in April 2022. The price of one unit of electricity went up from Rs10 in 2018 to Rs18 in April 2022, and the price of sugar went up from Rs52 to Rs100.
The sugar and wheat crises hit Pakistan during Imran Khan’s tenure, which allowed big businesses and cartels to earn billions of rupees and profit off of this crisis. PTI leaders including chairman Imran Khan have been projecting success of their policies while claiming that they out Pakistan on the right track economically and in foreign policy domain.
PRICES OF BASIC COMMODITIES
|Wheat Per KG
|Sugar per kg
Source: Pakistan Bureau of Statistic
The changing global strategic environment, looming threats war and rivalry of extra regional players have triggered another debate regarding the global hunger crisis and implications for developing countries. Developing countries are facing severe threat of their survival. Developing states often have fragile economies that heavily rely on stability and access to international markets. The threat of war can disrupt trade, investment, and tourism, leading to economic contraction, inflation, and job losses.
The ongoing conflict in Ukraine and its implications, including increased prices and the threat of hunger, are examples of how war and global power tussle can significantly impact a country’s economy and society. The progress of Pakistan lies in the hand of civil-military elite. Political parties must unite for greater cause while setting aside their differences. They should come forward and sit with other relevant stakeholders of the country in order to accomplish political, economic and strategic goals. The division within political parties and launching targeted campaign against state institutions is severely damaging the country’s overall image and its economic outlook.
The writer is an Islamabad based expert of strategic affairs.