ISLAMIC NATION AT A CROSSROADS

AMID POLITICAL INSTABILITY AND MILITARY INTERVENTION, PAKISTAN IS GRIPPED BY ECONOMIC CRISIS WHICH IS FURTHER DETERIORATING: IT WOULD BE INTERESTING TO WATCH HOW THIS ISLAMIC NATION OVERCOMES THE SITUATION

- DR RAJIV VERMA

Pakistan’s economy is in a crisis like never before. As a result, the Islamic nation is begging from International Monetary Fund (IMF). Is economic bailout just around the corner? This is not the first time Pakistan finds itself in such a crisis. The country has been in this situation twelve times since 1980. However, the current bailout is particularly severe because previous loans from the IMF have not been repaid, and other potential lenders — Saudi Arabia, China, and the United Arab Emirates — are offering loans at a very high-interest rate compared to the IMF. Due to this, IMF officials are negotiating with maximum advantage, offering Pakistan very little room for negotiation. However, obtaining a loan from the IMF has its pitfalls. The IMF's low-interest loans come with numerous conditions related to fiscal discipline and probity. As these conditions directly conflict with welfare policies, they put pressure on the government as citizens expect more welfare-oriented policies during the economic crisis.

As Pakistan stands at a crossroads, we should understand why and how it has fallen into this crisis. For the readers, a close look at this crisis is important to understand why such an economic crisis arises and what Pakistan can learn from India. Let us start by understanding how Pakistan got into this mess. This crisis is certainly not the result of one bad day or a single bad policy decision. The causes are as profound as the crisis itself. However, due to space constraints, we will focus on the state of affairs post 2018, when Imran Khan took over as Prime Minister, and discuss how political instability, unviable economic policies, and the worst floods ever exacerbated the crisis.

CONFLICT OF INTEREST