We are in the last few days of 2023 and in another two weeks the sun of new 2024 would dawn on this planet where armed conflicts and civil wars are raging – the Russian-Ukrainian war in Europe, the Israel-Hamas war in Gaza, and the civil wars in Sudan and Myanmar. When Syria is also in a state of war and when the Rohingya refugees have yet to find a place to settle away from the high seas where they have been marooned and forgotten by the world at large. Where terrorism is still haunting many a state, including Pakistan. Where the world has not yet found ways to solve the problems of global hunger, poverty, inflation, unemployment, global warming, pollution of land, seas and atmosphere, bringing disease and misery to millions in different parts of the globe. When the relations between the two leading economies and superpowers the USA and China are at their lowest in modern times.
Economic Update 2023
In July 2023 when the PDM government was ending its tenure, the economic outlook of the country was quite bleak. In July 2023 the economic indicators showed that – GDP was US $ 341.6 billion; GDP Growth Rate was 0.3%; Agriculture sector growth rate was 1.6%; Manufacturing sector growth rate was (-)3.9%; Commodity producing sector growth rate was (-)0.5%; and Service sector growth rate was 0.9%. Growth rate of total investment in the country was 10.2% of public investment was 14.3%; of private investment was 6.2%. National savings were 92.4% and foreign savings were 7.6%. The inflation rate as in the Consumer Price index (CPI) was 28.2% and GDP deflator was 25.0%. Pakistan’s exports were US $ 21.0 billion, and imports were US $ 43.7 billion. Trade deficit was US $ (-) 22.7 billion. Growth rate of exports were (-) 11.0% and of imports was (-) 21.3%. Remittances from Overseas Pakistani’s was US $ 20.5 billion. Growth rate of remittances was (-) 10.8%. Trade deficit as percentage of GDP was (-) 10.8% and Balance of Payments deficit was US dollar 3.4 billion or, 1.0% of GDP of Pakistan. Exchange Rate of Pakistan Rupee to one US dollar was Rs. 287.5 on 30 June 2023. (Source: https://www.finance.gov.pk/survey/chapters_23/key_Indicators.pdf)
In the last six months July- December 2023 the caretaker government both in the federation as well as in the provinces have initiated many development projects that have employed daily wagers. Although the weekly inflation has gone up to 42% in December and policy interest rates have been kept constant at 22%, Economic Indicators in December 2023 showed that, the GDP of Pakistan was at UC $ 340.64 billion at current prices. GDP Growth rate was 0.5%. The growth rate of large-scale industry was -2.94%. large-scale manufacturing has experienced a negative growth rate of almost 8%. The services sector has shown a slow growth rate of 0.86%. The agriculture sector grew by 0.23%. The unemployment rate in Pakistan is forecast to 8.50% in 2023. The unemployed people in Pakistan is forecast to 15.51m in 2023. The employment rate in Pakistan is forecasted to 52.35% in 2023. The number of employed people in Pakistan is forecasted to 95.51m in 2023. (Source https://www.google.com/search?q=unemployment+rate+of+pakistan+2023&sca_esv=591826272&rlz=1C1GCEU_en-GBPK977PK978&ei=kyaAZYGnIpy84-EPvt-LwAw&oq=Unemploymentrate+of+pakistan+2023&gs_lp=Egxnd3Mtd2l6LXNlcnAiIVVuZW1wbG95bWVudHJhdGUgb2YgcGFraXN0YW4gMjAyMyoCCAAyBxAAGIAEGA0yCxAAGIAEGIoFGIYDMgsQABiABBiKBRiGAzILEAAYgAQYigUYhgNIhzdQhAhY6x5wAXgBkAEBmAG_CKAB9zCqAQk0LTguMC4yLjG4AQHIAQD4AQHCAgoQABhHGNYEGLADwgIGEAAYBxge4gMEGAAgQYgGAZAGCA&sclient=gws-wiz-serp)
The caretaker government with the help of the top brass of the Pakistan army initiated strict measures and border controls to curb smuggling, money laundering and to stem the disparity between US dollar and the Pakistani rupee. Today the US dollar is Rs 284.5 down from more than Rs. 315 when this government took over from the PDM government in August 2023. For the first time in November 2023 this fiscal year the current account has shown a surplus of US dollar 9 million, with imports to Pakistan falling by over US dollar 4 billion to US dollar 21.31 billion between July-November 2023.At the same time exports slightly increased to Us dollar 12.5 billion in the last five-month period. Exports of services however declined by US dollar 103 million to US dollar 3 billion in the same period. Remittances to Pakistan declined by 10.3% during July-November 2023.Loan inflow to Pakistan was just US dollar 4.2 billion in July-November 2023 despite the IMF deal. Net FDI to Pakistan however increased by 8.1% to US dollar 656 million in the last five months of 2023. (Source: Dawn Business page 09, dated 19 December 2023)
The present caretaker government has also initiated the expulsion of illegal Afghan nationals and other aliens residing in Pakistan in order to curb terrorist activities and smuggling. Thousands of Afghan nationals have since left Pakistan in October and November 2023. On 20 October 2023 Prime Minister Kakar visited China to participate in the China Road and Belt initiative and to strengthen Pakistan=-China economic and political relations. On 26 November Caretaker Prime Minister Anwaarul Haq Kakar and COAC embarked on a seven-day official visit to the United Arab Emirates (UAE) and Kuwait and on 1-2 December 2023 the PM attended the Climate conference (COP-28). MOUs for investments into Pakistan of billions of dollars were signed between Pakistan’s caretaker government and the governments of UAE, Saudi Arabia and Kuwait. The business community of these countries also promised to invest in different business ventures in Pakistan. Despite the low economic indicators, the business community looks to an optimistic approach, when the stock market has reached a bullish trend in December. According to Business Recorder, “The benchmark KSE-100 index closed at 66,586.0 points on 18 December 2023.” In December 2023 the COAC of Pakistan’s Army General Syed Asim Munir visited the USA for strategic dialogue with the American civil and military leadership.
Political update 2023
After the dissolution of PTI’s government and installation of PDM’s government, the two provincial PTI led governments were dissolved by PTI leadership n January 2023, and thus the political turmoil in the country deepened. The issue of elections to these provincial assemblies in the Punjab and KPK within 90 days could not be resolved even by the intervention of the judiciary and thus created a constitutional debate, if not a constitutional crisis. A state of confrontation occurred between the PDM rulers and the PTI leadership when many a times the police and security forces tried to arrest PTI chairman from his Lahore residence. A state of siege happened around the PTI’s Chairman’s Lahore home that was fiercely defended by his supporters besieged in and around the premises. In the process PTI lost their hold on the two other assemblies of GB as well as of AJK. On May 9, 2023, violent riots broke out throughout the country following the arrest of PTI Chairman Imran Khan from the premises of Islamabad high court. Tragically, these demonstrators and rioters targeted the military installations, the GHQ, the Jinnaha House in Lahore (home to Lahore’s Core Commander) as well as the monuments of shaheeds and other such places that were dear to the people and the establishment in Pakistan. The arrest of the demonstrators and rioters led to the military trials of civilians and towards another constitutional crisis in the country. Many PTI leaders and electable announced their divorce from PTI and have created new political parties.
On 14 August 2023 the PDM government ended its parliamentary tenure and a caretaker government led by PM Anwar-ul-Haq Kakar took power. Elections are announced to be held on 8th February 2024 and the election commission of Pakistan has also announced the election schedule after the go-ahead by the Supreme Court of Pakistan as well as the caretaker government and the establishment. All political parties, especially the PPP led by Mr. Bilawal Bhutto Zardari and former president Zardari and the PML (N) led by three times former PM Nawaz Sharif and his brother Former PM Shahbaz Sharif have started their election campaigns and seat adjustments in different provinces with smaller political entities, while PTI has been crippled by most of its leadership behind bars or have left the party for new political parties and entities’. At the same time, PTI is not being given a plain playing field to start its election campaign and many of their meetings either were not allowed or were disrupted by the local establishment, arresting a number of their workers and local leaders. The election commission of Pakistan had asked PTI to have intra Party elections once again in December, and a new PTI chairman has been elected unopposed bypassing its former Prime Minister Imran Khan who himself nominated the name of Barrister Gohar Ali Khan (a new entrant in politics and in PTI) as the new party chairman.
Another important political event that occurred on 21 October 2023, was the return of the fugitive former Prime Minister Nawas Sharif of PML(N) after four years in self-imposed exile in London. The welcome that was mated out to Mr. Nawaz Sharif (who left the country as a convicted felon) on his return by the authorities and administration, and the quick disposal of cases against him by Islamabad High Court has created an impression that he is the ‘blue-eyed boy’ of the establishment and is likely to bulldoze himself as the fourth elected prime minister of Pakistan. An image of a ‘deal’ has been created that Mr. Sharif is trying hard to dispel from the eyes of the public. Only elections are going to tell how he has been able to sell himself to the electorate and or the establishment.
In 2023, the tenure of the President Alvi also expired, but was allowed to carry on as president of Pakistan by the caretaker setup. Also, in 2023 the Chief Justice of Supreme Court of Pakistan retired and was replaced by Honorable Justice Qazi Faez Isa who with his bold and transparent initiatives is trying to revive the trust of the people in the judicial institutions, especially the supreme court of Pakistan and its judges. On 29 November 2022, General Qammar Javaid Bajwa retired as COAC, GHQ and was replaced by General Syed Asim Munir. All these changes in the Army and Judiciary have significantly influenced the direction of the political landscape and would influence the image of Pakistan among the international community and the ‘friends’ of Pakistan.
Terrorist Attacks in Pakistan 2023
Pakistan was shaken by multiple terrorist attacks and insurgency during 2023. In January 2023 there were eight terrorist attacks In February there were seven terrorist attacks, in March there were six terrorist attacks, in April there were thirteen terrorist attacks, in May there were seven terrorist attacks, in June there were five terrorist attacks, in July there were terrorist fourteen attacks, in August there were seven terrorist attacks, in September there were seven terrorist attacks, in October there were four terrorist attacks, in November there were six terrorist attacks and in December to-date there were two terrorist attacks on the soil of Pakistan. A total of 86 terrorist attacks on Pakistani soil, in which approximately 900 people including members of our security forces and civilians were martyred (Shaheed) and many more were wounded. (Source: https://en.wikipedia.org/wiki/Terrorist_incidents_in_Pakistan_in_2023)
The political landscape of the country is ending on a positive note with a promise of ‘fair’ and ‘free’ elections and the upcoming campaign for political supremacy. How much the people of the country are interested in this political process is yet to be seen on 8 February 20224, but the business community of Pakistan openly opposed the democratic process and wanted to caretaker establishment to continue for the sake of a stable economic and business environment. Many in the educated in the country are of the view that ‘dictatorship’ suits the rich and powerful rather than political uncertainty of a democratic process. The debate is fueled by the media houses in the country. It is hoped that the elections and therefore 2024 would bring in a government that is democratically elected and therefore is pro-people, help expand businesses and GDP growth. A government that gives us long-term policies that enable the education system to be reformed, that enables poverty levels to diminish. Help increase employment, reduce inflationary pressures, and subsequently does administrative, and legal reforms that can give an enabling environment for SME’s and micro businesses and can subsequently lower cost of production and thus enhance the capacity of common citizens to earn legal profits and incomes. Transforming this society away from a rent seeking economy towards a competitive, modern profit-making economy for all.
