Pakistan’s rulers are on foreign visits and the elites splurge in time for the forthcoming Eid-ul-Adha, as the country’s economy nears complete breakdown, with no sign of the International Monetary Fund (IMF) bailout that ends on June 30, not listed by the global lender.
“The way rulers keep taking decisions with regard to the IMF, makes people wonder as to where all this will lead the country, ” columnist, Ali Raza Pirzada, has observed in Kawish (June 18, 2023).
However, during the last nine months, 22 ministers made 93 trips abroad, spending over PKR 850 million. They include Foreign Minister Bilawal Bhutto Zardari making 18 foreign visits including one to the United States and three to the UAE. As 1.5 million children suffer from malnutrition, Health Minister Qadir Patel’s two visits to America and Switzerland cost the exchequer PKR
7.8 million, Urdu Point newspaper reported on June 20, 2023.
Prime Minister Shehbaz Sharif himself took to criticizing the IMF and defended Finance Minister Ishaq Dar who is being blamed for mishandling the talks with the global lender, while the public is being fed with ‘patriotic’ fervour critical of the United States.
Sharif sought to signal the IMF and the USA while signing the USD 4.8 billion deal with China for a new nuclear power plant by praising relations with China with the usual rhetoric of their being “higher than the Himalayas.”
Analysts note that the public, harried by the steep price rise (36 per cent inflation) is not told that such a plant would take long to yield power and that the Chinese one billion aid does not stabilise an economy that requires USD 35 billion. Pakistan has a deadline of June 30 to fulfil USD 4.5 billion in its debt servicing needs.
Pakistan has a long list of economic crises in which ‘friends’ Saudi Arabia and the UAE have refused to write off debts. Amidst foreign crunch, the auto industry has come to a standstill – Shell Pakistan is withdrawing from the country and Suzuki has given a closure notice for lack of foreign exchange to buy spare parts.
Pakistan imports groceries and those imports are being stopped after June 25, Farhat Siddique, secretary of Karachi Wholesale Grocers Association announced, stating that thousands of containers are currently stuck at ports due to foreign exchange issues, incurring fines and charges Kashmir Express (June 20, 2023) said.
Pakistan managed to purchase Russian oil at a concessional rate for which it paid in Chinese currency, possibly paid for by a Chinese firm. However, Russian Energy Minister Nikolai Shulginov refuted any discounts for Pakistan for the purchase of ‘Urals’ crude oil that Pakistan requires. For its gas requirement, Pakistan failed to purchase from the international market since its letters of credit are not being accepted.
Textiles is a major export item for Pakistan. The Pakistan Bureau of Statistics (PBS) has reported a 14 per cent decline due to failure to meet export obligations.
After a drop in both remittances and exports, foreign direct investment (FDI) fell 21 per cent in the 11 months through May, though inflows in May rose on both month-on-month and year-on-year bases.
The State Bank’s data issued on Tuesday noted an FDI inflow of $149.6 million in May compared to $121.6m in April 2023 and $141.2m in May 2022.
Due to prolonged political and economic uncertainties, there was little hope in the financial circle for improvement in foreign investments, Dawn reported (June 21, 2023).
It is said for more than a decade, “Pakistan has lost attraction for foreign investments. The current economic turmoil has badly damaged the country’s image as an attractive place for investments.” Amidst all this, the country’s elites splurge. Asia’s ‘largest’ cattle market in downtown Karachi, a cow sells for anything from PKR 4,000 to PKR ten million. Calling the market a “money generating pot”, Yawar Chawla, the media cell in charge, said the market is expected to receive over 600,000 animals and hoping to generate an approximate revenue of PKRs480 billion for the vendors in the market, another report in Dawn (June 21, 2023) said. (Ends)