EconomyPakistan

Pakistan’s Struggle: Debt, Energy, and the Need for Tangible Solutions

Pakistan is currently navigating through a tumultuous phase, with no political party presenting tangible solutions beyond the usual blame games and rhetoric. The ongoing conflict between the establishment and a section of the judiciary, if left unresolved, could potentially escalate into chaos, leading to heightened repression and authoritarianism.

The followers of PTI, predominantly young, are often criticized for their ahistorical perspective, with their understanding of history seemingly starting in 2011 or as recent as February 8, 2024. While some activists are optimistic about a democratic revolution, others fear the emergence of a Sisi-like figure.

Two pressing issues that have been largely overlooked by the electronic media are Pakistan’s debt and energy crises. In the coming year, the country is expected to pay nearly $40 billion in fixed charges, which includes around Rs9 trillion ($32 billion) in interest on federal government debt and Rs2.1 trillion ($7.5 billion) in capacity payments to private power generation companies. This amount represents more than 10% of the GDP.

The burden of tax is likely to increase with a new IMF arrangement. Any delay in reaching an agreement with the IMF could put renewed pressure on the currency, leading to higher inflation and worsening the plight of the already struggling population. A sovereign debt crisis could lead to prolonged economic stress and a humanitarian crisis similar to Greece’s recent experience.

The Greek debt crisis, which began in 2009, took nearly a decade to resolve, with the country suffering the longest recession of any advanced mixed economy. The Greek political system was upended, social exclusion increased, and hundreds of thousands of well-educated Greeks emigrated.

Those who believe new elections can resolve these issues fail to appreciate that this grave crisis has little to do with the form of government. In fact, Pakistan’s debt problem has worsened in recent years, with both the PML-N and PTI governments sharing responsibility. No political party has offered concrete and clear solutions beyond blame games and rhetoric.

Pakistan cannot be run via social media, television talk shows, or in courts. The road ahead is rocky and perilous, with shrinking space for ethnic and other minorities (47% of the population). The desire for political reconciliation, no matter how sincere, is merely wishful thinking in the current environment.

40% of the population lives below the poverty line, and the majority of the poor and working classes struggle daily to pay bills and buy food. Meanwhile, much of the upper middle class is obsessed with accumulating wealth and lives in a bubble, unmindful of the working classes’ misery. People cannot eat democracy; they need jobs and food.

Old methods are being used by the powerful, who are unable to find a more productive use of raw power than micromanaging TV channels or crushing dissent. They acted to remove Imran Khan only when some of Pakistan’s closest allies became concerned about the country’s future due to his reckless policies, which antagonised even close allies like China and Saudi Arabia.

Pakistan is at a crossroads, with its future hanging in the balance. The country’s leaders and citizens alike must come together to address these pressing issues and chart a course towards stability and prosperity.

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