How Bankrupt is Pakistan Economy ?

On August 14, 1947, when Pakistan entered into existence after the partition of India, it had the potential to evolve as a state commanding its rightful place in the comity of nations. However after 71 years, under the tender care of the Pakistani Army, it seems that Pakistan has lost its way. A 'failed state', a 'rogue state', a 'sanctum sanctorum of global terror', a 'corrupt and beggar state' and many other appellations have attached themselves to Pakistan over the years. Muhammad Ali Jinnah the founder of Pakistan would doubtless have wished that Pakistan be recognized throughout the world but certainly not this way. Welcome to The Atlantis Report . A Brief History of the Pakistani Economy . The first four decades of the nation's existence, (the 1950s until the decade of the 1990s) were promising decades in Pakistan's economic history. Pakistan’s economy grew at an impressive rate of 6% per year, per capita incomes doubled, inflation remained low and poverty declined from 46% down to 18% (by late 1980s). In the 1990s, however, economic growth plummeted to between 3% and 4%, poverty rose to 33%, inflation grew in double digits and the foreign debt rose to nearly the entire GDP of Pakistan precipitating an era of economic and monetary crisis. And now Pakistan cannot stop this perilous economic nose-dive. Pakistan's economy is caught in a downward spiral . To put it simply, Imran Khan’s ‘Naya Pakistan’ has suffered a serious jolt as the GDP growth rate remained abysmally low at 3.3% for 2018-19 which is just a little over half of the targeted GDP growth rate of 6.2%, reports DAWN. The Imran Khan led government had spoken of 3.8% growth in agriculture, 7.6% in industry and 6.5% in services, thus targeting an overall growth of 6.2% in its GDP. All of these targets have fallen flat even as the country sinks ever deeper into the financial quicksands. If we look at the state with a microscopic lens we realize that Pakistan demonstrates all the symptoms of a fast failing state! Pakistan is in the grip of a severe debt trap. It has been taking loans to pay loans and then more loans to repay those loans.. Pakistan has been mortgaging airports, radio stations, railways to raise loans. There is not much of fuel in stock, pushing its power shortages to their worst levels.. The Pakistani rupee has suffered a sharp devaluation against the US dollar. Last year, Pakistan was added to the Global Financial Action Task Force’s (FATF) “grey” list of countries to watch for terror financing. The country has had to seek yet another IMF bailout for the 22nd time to stabilize the foundering economy. The country already owes $5.8 billion to the IMF from past bailouts, and has been able, so far to effect timely repayment just once. According to the latest figures released by the government, Pakistan's growth rate is set to hit an eight-year low, with all major indicators down. Its economy has also been significantly damaged after the tensions with India that have been aggravated by the Pakistani dalliance With A’s week as support, shelter, finances and training provided to terrorists. Between terrorism and bankruptcy, what did Pakistan chose? "There is little change in Pakistan's attitude towards militancy, particularly the one directed against Afghanistan and India", says ex-envoy to the US, Husain Haqqani. The Pakistan Army is the mother of all terrorist groups operating from the soil. A lion's share of Pakistan's budget goes to its military, which comes from China and the Arab nations. The Pakistani state and the army have become so preoccupied with nurturing terrorism and radicalism (to stage proxy campaigns against India, Afghanistan and the world) that these monsters – along with the military itself – now command the resources, the young minds and the social mores of Pakistan. Even if the rulers of Pakistan wished (under international pressure and economic compulsion) to rein in terrorism and fanaticism, they might discover that they have the tiger by the tail. That is why even though Imran Khan had promised to put an end to terror groups operating from the country, for fear of a global financial squeeze put on it by the FATF, the ground reality remains unchanged. Pakistani rulers would rather watch the allow the nation pass into bankruptcy than den scant resources to the military and their terrorists as well as radical outfits. Comparison: West Pakistan’s poor cousin, Bangladesh soon after independence in 1972, was labeled as an international basket case by Henry Kissinger, but now its exports are about US$36 billion compared to Pakistan’s US$21 billion. Similarly, the former East Pakistan’s annual GDP growth is over 7 percent as compared to Pakistan’s highest in 2018 in the past thirteen years at 5.8 percent. Pakistan is lurching from one economic crisis to another and, as always, the military-political-radical cabal finds itself reaping the whirlwind after having sown the wind. Why IMF refuse to bailout Pakistan? = Simple reason is that most of that money will be paid to china since they owe huge debt to Pakistan and imf is backed by USA, so they will never allow funneling their money back to China. A Chinese bailout will make entire west take a step back. The terrorism issue is secondary for west. Pakistan has a population of around 205 million, and although it’s GDP had risen by up to 5 percent, it has a fairly average per capita measure. In fact, up until 2014 Pakistan had registered astonishingly high economic growth. What led to the eventual downfall was failure in the SMSE setup and even the overspending. Pakistan has consistently among the highest per-GDP expenditure in military in the world, and with a strategic position near Afghanistan, they could even reap benefits out of this ultra-military economic stance. However this turned problematic when the United States decided to cut down on the armed forces’ presence. As of now, Pakistan has debts up to the tune of 28,500 Billion Pakistani rupee, and the current government’s tendency to dispose of IMF aid, when offered, seems to paint a grim picture. Even with IMF support, fair estimates show that it will take at least 11 years for Pakistan to reach at least half of the growth rates of economies of neighbors, like India, or Sri Lanka. The Pakistan economy is not “bankrupt” - that is a common misnomer. But it is in terrible shape, and the government needs to accept this and realize that a revival at some point is better than no revival at all.







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