Pakistan is just entering an economic crisis. Rapid depletion of foreign exchange reserves, inflation, high-interest rates, and limitation of imports have directly impacted the public. Due to the limitation of foreign exchange, imports of essential items like petrol and petroleum products, lifesaving drugs, and raw materials for the industry are also creating panic in society.
Political chaos is also growing side by side and every next moment, a new situation has been emerging. Blaming each other, victimization of each other, and mistrusting each other, have plugged the public into a panic-like situation.
In a fear of scarcity of some of the essential items, some businessmen have been storing or hiding their stocks, for high profits in the black market. The worst hit item is Atta (Flour). Although the wheat production was sufficient due to smuggling to Afghanistan and unnecessary stockpiling, an artificial shortage has been created and is being sold at higher prices in the open market.
Read more: NAB court frees 21 accused in Sindh wheat scam
The dollar rate in the open market and the official rate are at a gap of Rs. 20~40, which is also created by a few businessmen or due to panic in the public or the dollar craze of the nation. What so ever is the reason, the public is worrisome and to some extent in a panic already.
However, the ruling elite seems quiet and calm, or at least in no visible panic. All their efforts are focused on borrowing more. Negotiation with IMF is also not very much encouraging, as they keep on increasing their demands, as they know the exact magnetite of vulnerability in the country. They are using one reason or other to gain more time and delay the release of due installment.
By mandate, IMF is supposed to bail out any member country in such a crisis. Pakistan is a member of the IMF since the beginning and deserves such a bailout. Unfortunately, the history of the IMF is full of instances where it led many countries to disasters. Recent examples are Egypt, Sri Lanka, Indonesia, etc. As a matter of fact, IMF has already become a political tool to fix rival nations. It has been hijacked by a few big nations and is being used to achieve their political goals.
The #IMF mission has apparently been particularly tough during ongoing negotiations to unlock an additional $1 billion in funding for #Pakistan.
They’ve essentially told #GOP that it has never approached the turnaround of Pakistan’s economy seriously. https://t.co/SzqsgVMDXT
— Fahd Sheikh (@FahdSheikh3) February 6, 2023
Does Pakistan need IMF?
By design, Pakistan was pushed into current vulnerability. Gradually, forced it to keep its distance from China, and BRI or CPEC. Misinformation, on CPEC, was spread, the false narrative was propagated, and distorted projection was disseminated and caused damage to CPEC. Chinese nationals and their assets were targeted in Pakistan in acts of terrorism. Enemies of Pakistan to some extent succeeded to slow down CPEC and create misunderstanding between the Iron brothers.
By nature, the Chinese are rational people and do not overreact, they are still engaged in completing ongoing projects as usual. But hesitant to initiate new projects like ML-1. Although the fruits of the CPEC are very much visible like the contribution to our GDP during the last several years, overcoming electricity shortage, the improved net world of roads in the length and width of the country, etc. But, Pakistan could not sustain the same pace of development and the same pace of investments under CPEC. Diplomatically and politically, Pakistan is still very close to China, but, a visible slowdown in the economic front is being witnessed.
China has offered Sri Lanka a 2-year debt moratorium. It is expected that China will also oblige Pakistan and rescue. But, we need to keep our own house in order. Since the beginning of CPEC, Pakistan deputed irrelevant people to interact with China, which resulted in many misunderstandings.
Read more: China confirms debt moratorium to Sri Lanka
Our rulers must explore all options in addition to IMF for meeting its financial challenges. In my opinion, we must evaluate the terms and conditions of the IMF before accepting them. Think twice keeping the consequences in mind. If the IMF installment is merely 1.5 billion US dollars in return for severe conditions, there must be some Pakistani businessmen who can lend this money to the Government of Pakistan. Some individuals or consortiums can arrange this meager amount conveniently. Trust, the Sharif family, or the Zardari family can also think on these lines, as they also are filthy rich, and above all, they earned this money from this country. But it should be volunteer, no political pressure or victimization, please.
Prof. Engr. Zamir Ahmed Awan is Founding Chair GSRRA, Sinologist (ex-Diplomat), Editor, Analyst, and Non-Resident Fellow of CCG (Center for China and Globalization). (E-mail: firstname.lastname@example.org). The views expressed in the article are the author’s own and do not reflect the editorial policy of Global Village Space.