A catastrophic malfunction? In Pakistan

 Pakistan's prosperity and stability are in jeopardy as a result of the current political and economic crisis.

The political unrest that has persisted since April 2022 and the subsequent events are threatening to bankrupt the nation. As a direct consequence of this, Pakistan is confronted with a number of issues, including exchange rate instability, a decrease in investment, elevated inflation, alarmingly low levels of foreign direct investment, and a decrease in remittances. In addition, inflation is rising in the nation.

The highest and lowest inflation rate ever recorded is at the top. Commodity prices have more than doubled since April 2022. As the cost of essential goods continues to rise, middle- and lower-class individuals are having a harder time meeting their financial obligations. Even the most basic needs are out of reach for many people. Pakistan's small and medium-sized businesses (SMEs), the backbone of the country's economy, are closing every day as a result of rising input costs, a lack of access to credit, and general economic instability.

The messiah's emissary, London Finance Minister Ishaq Dar, has been even worse. His insistence on artificially lowering the value of the dollar has significantly exacerbated the current economic crisis. Despite the official dollar rate, banks have been charging open market rates.

Additionally, this policy resulted in a lack of funds, making it even more difficult for businesses to import raw materials, machinery, and other items necessary for operations. Consequently, major industries' factories and plants that heavily rely on imports have been shut down.

Additionally, investors' reluctance to invest in a market where the value of the currency is overvalued and their investments may lose value hurts foreign investment.

Pakistan finds it extremely challenging to keep up with unfamiliar trade holds when the ongoing financial crisis is within reach. It is dangerously low because the reserves are insufficient to cover even three weeks' worth of imports. The ongoing decline in foreign remittances exacerbates the situation. This is putting a significant strain on the economy because the country is having a hard time paying its bills and loans on time.

The IMF's control has made the tax situation in Pakistan worse. When it comes to the release of the subsequent $1 billion tranche, the IMF consistently refuses to relax its conditions. Instead, it proposes raising taxes to put even more pressure on the poor in the country. However, the IMF's proposed reforms have been met with opposition and skepticism because many Pakistani economists believe they do not align with the country's best interests. The question is: Is it important to us?

It is true that the current government is not effectively and promptly responding to the crisis. However, it would be unfair to delegate all responsibility to the government. One of the many stakeholders who has had a significant impact on the current political crisis is the opposition party leadership.

The constitutional crisis has hurt Punjab's economy a lot, and it will take years for it to recover. The drama and the Punjab Assembly's recent dissolution have made the situation even worse. Because of this lack of leadership and vision, a lot of Pakistanis already feel hopeless.

The economy will collapse and the current state cannot be sustained if this bubble bursts. A comprehensive and long-term economic reform strategy must be developed by all stakeholders in order to address the underlying causes of the current economic crisis.

The strategy for reform ought to include implementing policies that are advantageous to businesses and can entice investments from both domestic and international sources, addressing the causes of the current political and economic instability, and creating a favorable environment for investment and growth.

Additionally, alternatives should be investigated rather than hurriedly selecting a new IMF loan program each time. One option is a Pakistan Sovereign Wealth Fund. As a consequence of this, the nation might be able to obtain dependable funding that does not rely on loans from the IMF. In addition, cooperation with other nations must be intensified in order to gain access to brand-new markets and investment opportunities. In conclusion, in order to increase productivity, increase competitiveness, and establish new industries, the government ought to encourage investments in technological innovation.

The economic crisis must be addressed immediately and decisively by Pakistan's leaders, regardless of their political rivalry. The fate of the nation is in jeopardy this time, and the stakes are extremely high. It's "now or never" here. Pakistan's future will be determined by the actions taken by the government and other stakeholders. All stakeholders must collaborate in order to deal with the crisis and make the necessary sacrifices for a better future.