Pakistan is in crisis. The worst inflation in Asia, mass protests, record energy prices, and an uptick in terror attacks. You’re talking about a very, very important regional market, regional power. Pakistan’s economy is sinking. It has no option but to seek a bailout. Pakistan was once
hailed as a country that could be an economic rival
to its neighbor India but it's falling further and further behind. The nuclear-armed country
with 240 million people is living on the edge of ruin. Behind th
e scenes, its military is seen as holding sway over government policies. At the heart of it all, Pakistan is
trapped in a cycle of borrowing that appears to have no end. The IMF can’t let Pakistan sink. Pakistan sinks
it will be chaos. And the world can’t
afford this big a chaos. Now the economic
situation in Pakistan has gone from bad to worse. Pakistan’s year-on-year inflation hit a record level of 36.5%. This is the highest-ever
increase in nearly 60 years. I’ve been working in this
mar
ket for the last 28 years. We are in trouble. Paying rent, bills, maintenance. Everything counts. Earlier, 40 to 50 customers
used to visit us daily. But now, it’s down to
two or three people, only. Even the three years
during Covid was better. Pakistani people are very
concerned at this point in time. You can see people are
hopping onto boats risking their lives to get to Europe somehow or another. People are borrowing
money from loan sharks. And we have seen last year, at
one point one-
third of Pakistan was flooded completely. And it led to losses
and damages of $30 billion. I will never forget the
climate-related carnage I saw. Lives, homes, livelihoods, schools, hospitals, all obliterated. It’s expected that
such natural calamities will continue happening. And Pakistan does not have
any funds to deal with it. Ahead of the general elections all political parties have promised to take on politically difficult reforms which will help the country get on sustainable financial
footing but none of them have been
able to do so in the past. We’ve been here before. And we have seen some of these bailouts actually get halted over failure to meet certain conditions. It is very important that Pakistan sticks to the commitments under this program. Meaning, don’t spend
what you don’t have. Be prudent on tax collection. One of the big problems Pakistan
has is very low tax to GDP. At the IMF we say if your tax to GDP is below 15% you can’t really quite function as necessary
to fund public services
and the state expenditures. Is Pakistan’s debt sustainable? It is sustainable but it is
borderline sustainability. Pakistan’s inflows just do
not cover its outflows. Pakistan does not export enough. Pakistan doesn’t have enough foreign direct investment coming in. Historically, this gap has been filled by remittances, bailouts, and direct injections of cash from China and Saudi Arabia. What we are short of is ideas. What we are short of
is rules and laws that are cond
ucive to growth. Unfortunately, we don’t understand that. So we continue to go
to beg and borrow. We continue to build roads.
We continue to build all these things which really do not
give you quick growth. Nadeem Ul Haque worked for the International Monetary Fund for 24 years. Now he’s skeptical about the
IMF’s policies in Pakistan. Pakistan is an IMF addict and
the IMF is a Pakistan addict. We are both locked
in a death dance. The fault lies within. The country’s political system
is fraug
ht with instability with the military directly ruling for almost half of the nation's history and retaining outsized influence even when democratically elected governments took power. The entire status quo,
the entire political status quo is against me right now. Imran Khan’s government tenure was cut short when he was removed from power
in April of last year. The government that replaced him oversaw a crackdown on Khan's political party, whose leaders are now being
tried in military courts.
The caretaker prime minister
has previously said he will ensure fair punishment by law for those involved in violent protests. We tracked down a member of Imran Khan’s political party, the Pakistan Tehreek e-Insaf,
or PTI. Can you tell the audience why
are you hiding at the moment? There’s been a crackdown on PTI
of the sort that unfortunately only happens in
countries like Pakistan, with a very clear
and singular objective of dismantling the party. If we continue to go down the
same path
that we are going, if we think we can fix this country without fixing the civil service, without fixing
public sector contracts, without opening up
to the free market, without political
and economic stability, I don’t want to imagine what 20 to 30 years down
the line will look like. Pakistan has had a history
of violent terror attacks. Since the Taliban took
over Afghanistan in 2021 the situation
has gotten much worse. Pakistan’s first priority is to prevent
and counter all terrorism fr
om and within Afghanistan. Kakar’s caretaker government took over from Shehbaz Sharif in August 2023. We spoke to Sharif’s
former economic adviser. We have to widen the tax net. We have to ensure that everyone is paying their fair share of taxes. Our tax-to-GDP ratio
is far too low. Responsible privatization is
the need of the hour. We can no longer afford as a
country to continue bleeding in the manner that we have on account of the
state-owned enterprises. In all this time, Pakistan has b
een living beyond its means. All of this is creeping in. It is impacting people. That includes people like
Jahanzaib, a stock analyst. He has decided to leave
Pakistan for good. Everyone I know, either they have moved out of the country or they are desperately
looking to move out. I was driven by the
economic uncertainty, the rapid PKR depreciation, rampant inflation and uncertain political
environment of the country. Even though I had a
very comfortable job, I decided this was not what
I
want to go through everyday. Life in Pakistan will continue to be dominated by one institution: The Pakistan army. It has been a constant
throughout decades and continues to exert influence
from behind the scenes. Some analysts say military interference stops overall progress but then others argue
it’s the only institution that really can get
things done in Pakistan. Hope seems to be running
out for most Pakistanis. But not for all. We have to work together to convince our best and brighte
st that they have a future here,
that we are intent on and are doing everything we can to make things easier for them. I’m hopeful. The majority of people
I know aren’t hopeful. I’m hopeful because hope
sustains the world. If I get disheartened, how will life be? We need to push on. Pakistan will make it. The question is, when?
Comments
There is a saying in India about Pakistani Army- "Never won a war, never lost an election"
When religion is more important than education & everything😊😊😊
As an Afghan Hazara who has lived more than half of my life in Pakistan, I can say: "Yeh jo dehshatgardi hai, Is ke piche wardi hai."
" hate india" is not an economic policy you can build a countrys fundaments on
It's a shame that they didn't even touch on the problem of terrorism sponsored by Pakistan's army and chose to just show the part where the country itself is the victim of terrorist attacks. Unless Pakistan's citizens realize that the biggest problem they have is the state sponsored terror camps and start protesting against them, they are doomed.
A country formed in the lines of religion is bound to go in the drain.
legend says.. every country has an army but Pakistan army has a country
In India the government pays salaries to the army but the army in Pakistan basicaally controls the country's finances.
reduce military funding & enforce effective tax laws is literally what IMF is saying
As an Indian, I am in a dilemma whether to pray for better days for Pakistan thinking about the woes of its ordinary people or be satisfied of its continued economic decline since that means lesser money with Pakistan to be able to fund terror against India.
Main reasons for current status of Pakistan: 1. Relogious fanaticism - Curbs innovation and development in Science. 2. Real power with Military industrial complex - Democracy in Peril. 3. Bad relations with neighbours - Curbs trade and exchange of best practices and technology. 4. Unchecked Corruption - Money in the hands of few Military generals and politicians who hoard it in London and elsewhere and lead a lavish life there. 5. Harbouring of Terrorists - Safe haven for terrorists which bite back when the time comes. 6. Lack of accountability - Always blaming others for their misery and problems.
I think we are too obsessed about the economy crashing. In the right sense, the economy never crashes. It just undergoes cycles, and almost always recovers. So I really don't care what the predictions are. I just want to grow my investment portfolio. I read that people are pulling in massive profits despite the downturn. Any tips on how they do it?
Pakistan is so peaceful that even osama bin laden lived peacefully
First I thought it's not true and things are being over hyped but after watching this, I realised yeah, this country has lots and lots of problems and the biggest problem is the union of Religious radicalism and Military.
As someone currently living in Pakistan, I can tell the situation is worse. We university students are in extreme anxiety because we know there are little to none job prospects for us once we graduate. There is no hope for us, trust me. The reason why I expect no development in the future is because majority of the educated people, scientists, engineers, doctors, IT specialists, all are leaving Pakistan for a better future abroad. So who will be left here? The uneducated lower class and the business upper class which are only busy making foreign investments. Our future is bleak.
People outside Pakistan are more concerned about Pakistan! If you go to Pakistan, they don't care about economy, they will say that straight to your face and say all that matters is Allah!
As Indians , this gives us immense satisfaction . They brought it upon themselves , a failed state
During ancients times this area was one of the richest but post arraival of desert cult this has gone down deepest.
As Shashi Tharoor once put it "Even if India were to give Kashmir to Pakistan, the pak army and politicians will give it to India on loan as they don't have any other story to sell their population
Pakistan’s biggest problem is it’s obsession with India. Like every Pakistani whether inside or outside of, in any continent can’t talk about their country without talking about India. To succeed in life one most important thing is not to play the comparison game, because then you do things because someone did or didn’t do( while completely ignoring the fact the other has different situations and issues). Problem solving starts with recognizing our problems not constantly being obsessed with something or someone