Pakistan on the brink of economic collapse?

There is a shortage of all kinds of commodities in Pakistan at present. Homes have no gas to cook or run small factories, and power outages are so frequent that the economy is paralyzed.

“The recent power outage has paralyzed our lives,” a housewife, Mrs Waseem, told DW in Karachi. We are unable to perform our daily tasks. It was like living in the Stone Age.”

On January 26, the Pakistani rupee fell 9.6 percent against the dollar, the biggest one-day drop in two decades. The dollar crisis is so severe that hundreds of foreign containers carrying food and medical supplies have been stuck at ports for weeks because authorities do not have the money to pay for the cargo.

Prime Minister Shehbaz Sharif’s government is now facing a big challenge. It has to convince the International Monetary Fund (IMF) to renew its debt to avoid default.

Speaking to DW, Pakistan’s former finance minister Salman Shah said, “I think we will get the IMF tranche soon because the government has increased fuel prices, imposed new taxes, and the market Allowed to fix the dollar rate.

The former finance minister further said, “The IMF loan will help improve the balance of payments and at the same time inflation will increase by 40 to 50 percent.” People will suffer the most. In Pakistan, the rate of people living below the poverty line is close to 30 to 40 percent. According to Salman Shah, the storm of “default” will wipe out everything. He said, “Although there are similarities between Pakistan and Sri Lanka, Pakistan will follow the path of Sri Lanka’s economic crisis if it does not receive installments from the IMF.”

The existence of Pakistan’s economy is threatened, but instead of focusing on dealing with this serious crisis, the Islamic Republic’s politicians are fighting over who will rule.

Pakistan is facing a deep political and constitutional crisis since the removal of former Prime Minister Imran Khan in April last year. Imran Khan was removed from power by a no-confidence vote in Parliament. On the one hand, he accused the US of planning a “regime change” in Pakistan, and on the other hand, he was at odds with Pakistan’s current government and powerful military generals.

Former cricket star Imran Khan is demanding the politicians to hold early elections to resolve the political crisis which many analysts believe that the recent economic crisis requires fixing the economy first and not holding elections.

“The country’s economic situation is very bad and we have run out of money,” Zia-ur-Rehman, a political analyst, told DW. Holding general elections is an expensive affair, and I think Pakistan cannot afford it at this time.” Zia-ur-Rehman added, “The ideal way forward is that all stakeholders, including politicians and the military, High officials, sit together and agree on a government that comes to power by national consensus. The main task of such a government should be to fix the country’s economy.

Some political observers in Pakistan believe that the biggest obstacle to national dialogue is former prime minister Khan, whom critics accuse of being “inflexible”.

A senior journalist, Ghazi Salahuddin, says, “Khan sees politics as a game, where a player’s sole objective is to defeat the opponent at any cost. That’s not how politics works. “Politicians have to get along with everyone, even their opponents.”

A splinter faction of the outlawed Tehreek-e-Taliban Pakistan (TTP) has claimed responsibility for the recent suicide blast at a mosque in Peshawar. This shows why Pakistan’s economic crisis is a major security threat to the region.

Analyst Zia-ur-Rehman said, “Pakistan does not have the funds to deal with the security challenge.” This is a big threat to the stability of the country. Experts compare the current economic situation of Pakistan with Sri Lanka. A series of massive anti-government protests began in Sri Lanka last year against fuel shortages and price hikes. The protesters stormed the parliament and other government buildings. The situation worsened to such an extent that former President Gotabaya Rajapakse had to flee the country.

Pakistani citizens are also frustrated with their ruling elite to such an extent that they can also take to the streets in full force.