Pakistan faces tough economic times, with many struggling to make ends meet. The current economic crisis is primarily caused by its external debt, which amounts to $126.3 billion. The country owes this debt to a wide range of creditors, including Paris Club nations, private and commercial lenders, and China. Pakistan’s foreign exchange reserves are currently around $4 billion, which is insufficient to pay for even one month’s worth of imports. As a result, there is a significant chance that the nation will not be able to pay its debts in full. Another issue is an ever-increasing inflation that has crossed over 25%. The rising costs of food, fuel, electricity, and imported goods are the primary causes of this inflation. The government’s fiscal and monetary policies, which were implemented to boost the economy in the face of the COVID-19 pandemic, have further worsened the inflationary pressure. In addition, millions of Pakistanis have left the country and moved abroad to find better earning opportunities in countries like the UK, USA, Finland, Australia, Canada, South Korea, UAE, KSA, and Kuwait.
One of Pakistan’s economic challenges is that the country has been trapped in a destructive state of no sustainable growth over the past 5 decades. This is why, today, it stands on the verge of default.
The country is also dealing with a persistent energy crisis that has seriously damaged its ability to produce goods and expand its economy. The country relies heavily on imported petrol and oil, which are expensive and prone to price instability. Unfortunately, poor management, corruption, and a lack of investment in renewable energy sources have resulted in insufficient and inefficient domestic energy production. As a result, the state frequently experiences load shedding and power outages, which negatively affect millions of homes and businesses. The country’s GDP has decreased by up to 4% recently as a result of energy shortages.
Another root cause is the political instability. Pakistan’s financial instability is significantly impacted by its political uncertainty. Frequent changes in government, governance, and political unrest have weakened foreign and domestic investor confidence. This has led to a decrease in foreign direct investment (FDI), causing capital flight and lowering the likelihood of economic growth. Exchange rate instability, caused by political unrest, harms businesses that depend on stable exchange rates for international trade. Moreover, insecurity issues related to political instability, including terrorism and civil unrest, disturb economic activities, frighten foreign investment, and damage infrastructure, collectively contributing to economic and financial instability in Pakistan. This uncertainty has undermined the confidence of investors, creditors, and the public in the government’s ability to address the economic challenges.
Recently, former Prime Minister Nawaz Sharif proposed a plan to help lift people out of poverty and boost the economy. His roadmap offers hope for a better future. The country has struggled with low GDP growth rates, inadequate infrastructure, and a lack of foreign investment. Moreover, external debt has been evaluated heavily on the nation’s finances, limiting its ability to invest in critical sectors such as education, healthcare, and infrastructure development. Poverty levels have further worsened social discrimination, posing significant challenges to sustainable development. In the face of these scary challenges, Nawaz Sharif has outlined a comprehensive roadmap to address Pakistan’s economic challenges and foster sustainable development. His vision is to prioritize poverty alleviation and economic revival. His roadmap emphasizes the need for comprehensive economic reforms to boost growth and attract investment.
This involves streamlining bureaucratic processes, improving business efficiency, and enhancing investor confidence through transparent policies and regulatory frameworks. By fostering a favorable environment for business and investment, Pakistan can unlock its economic potential and create employment opportunities for its growing population. He stressed that investment in infrastructure development is crucial to uplift Pakistan’s economy. By modernizing transportation networks, expanding energy infrastructure, and upgrading telecommunications systems, Pakistan can enhance its connectivity and competitiveness on the global stage. In addition, infrastructure projects create jobs and lay the foundation for sustainable economic growth and development. Similarly, he insisted on recognizing the pivotal role of human capital in driving economic progress. Nawaz Sharif advocates for investments in education, healthcare, and skills development. By equipping its citizens with the necessary knowledge and skills, Pakistan can unleash the full potential of its workforce and foster innovation and productivity across different sectors.
Prioritizing healthcare initiatives is important for ensuring the population’s well-being and justifying the socio-economic impact of health crises. By addressing the root causes of poverty and inequality, Pakistan can build a stronger and more equitable society where every citizen has the opportunity to flourish and prosper.
As Pakistan is going towards economic recovery and prosperity, Nawaz Sharif’s roadmap offers a blueprint for progress and transformation.
By prioritizing economic reforms, infrastructure development, human capital investment, and poverty alleviation, we can overcome its current challenges and emerge as a dynamic and strong economy on the global stage. However, we will require political stability, determined efforts from all stakeholders, and a commitment to sustainable development to achieve this vision.
However, now the time has come for the people of Pakistan to choose their leader according to their performance.
For instance, they must consider the progress made in the recent eras, USD rate, fuel prices, etc. Moreover, any political party leader should now understand that if they want to win and remain in the government, they must deliver according to the expectations of their voters.
Only wills, political campaigns, and speeches will not help you win the hearts of people this time. Hopefully, this time, the country gets a leader who provides a guiding light toward a brighter and more prosperous future and gets the country into a state to get foreign funding as well.
—The Writer is a Senior Social & Economic Analyst and can be found at [email protected]
