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Pakistan Finds Itself In An Economic Crisis: PM Shehbaz Sharif


Pakistan finds itself in an economic crisis: Prime Minister Shehbaz Sharif

Islamabad:

Prime Minister Shehbaz Sharif said Pakistan was once thought by many to be the next “Asian tiger”, but was mired in a financial crisis. repeated boom-bust cycles.

As Pakistan turned 75 on Sunday, Sharif wrote an essay in The Economist magazine in which he said the teenage country, in the 1960s, was filled with hope and promise as promised. with destiny.

He said the country was widely seen as poised to “be the next Asian tiger”. In 2022, however, Pakistan was mired in its latest economic crisis, Geo News reported on Monday.

“This [latest economic crisis] was born from the most challenging global policy environment of our lifetimes, characterized by a commodity supercycle, a history of monetary tightening at the US Federal Reserve, and a conflict in the US. Europe is disrupting the post-war global order,” wrote Sharif.

“But it is also rooted in weaknesses at home: weaknesses that have remained unresolved over the past five decades; weaknesses that have forced us to approach the International Monetary Fund (IMF) many times over the course of time.” This is not the way to succeed, he said.

Sharif then cited three significant structural flaws that stood out in the country.

“These things have stunted the growth of the economy, stunted our growth, and led to repeated boom-bust cycles since the late 1980s,” he said.

“First, our political environment has become increasingly polarized. Instead of arguing about how to better run Pakistan and get out of the country’s poverty, political parties have fighting each other,” the prime minister wrote.

“Secondly, we have not invested enough in the basic elements of development: education, health and infrastructure. This is partly due to the amazingly low taxes, but it also reflects our priorities in public spending, some of which may be due to the complex neighborhoods in which we live, including longstanding adversarial relationships with India, Russia and followed by the US invasion of Afghanistan and the wave of millions of refugees into Pakistan.

“Third, we’ve turned our heads in a way that has prevented us from reaping the benefits of globalization through the free exchange of people, goods, capital and ideas. time,” he said. .

The prime minister lamented that Pakistan has barely produced anything the world demands as local companies are still very comfortable operating within the border, the report said.

“Pakistan today is one of the most consumer-oriented economies in the world, with consumption accounting for more than 90% of our GDP (gross domestic product). In contrast, we invest only 15% of production. volume and exports only 10, he wrote. The annual flow of foreign direct investment is less than 1% of GDP”.

“These unfortunate statistics reflect flaws in our economic model,” he said. No successful country has developed this way.”

On the occasion of Pakistan’s diamond year, Sharif said that as the country turns 75, the time is worth taking a serious introspection.

He said that the fifth-largest country in the world, where two in three people are under 30 and full of aspirations, finds itself stuck with an income of just $1,798.

Every third person lives on less than 3.20 USD a day. And less than a quarter of women in this country work outside the home; More than a third of Pakistanis cannot read or write.

“Our immediate priority is to get through the current economic crisis safely. We are not alone in this. The whole world faces a difficult year. But we have protection. protection of an IMF program to help us through. While some measures will create difficulties and require sacrifices, we are committed to implementing the program. This is the path to safety. ours,” wrote Sharif.

“This challenging moment also presents us with an opportunity. If we can get the core things right, there’s no reason why we can’t turn our fortunes around. That will happen. out. are political differences in a democracy like ours.

“But there must be agreements on a few principles: manage our finances prudently, invest in our people, encourage merit and innovation, and promote regional peace. This is within our reach,” he said.

Sharif also said it is important to modernize Pakistan’s social contract and the people to pay their fair share of taxes in return for vital public services.

“We must do better for our youth and women, and enable them to fulfill their aspirations and be the engine of our economic growth. justice – and where we are I want Pakistan to occupy the globe as a modern and responsible country,” he wrote.

Cash-strapped Pakistan is facing growing economic challenges, with high inflation, sliding foreign exchange reserves, a widening current account deficit and a depreciating currency.

With a widening current account deficit of $13.2 billion in the first nine months of the year and urgent external debt repayment requirements, Pakistan has requested $9-12 billion in financial assistance through June. 2022 to prevent further depletion of foreign currency reserves.

(This story has not been edited by NDTV staff and was automatically generated from the syndication feed.)



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