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Monday, January 30, 2023
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The looming default

Masses should realize the bone-cracking fact that our economic cruise has badly been stuck into muddy drain, sinking slowly and gradually unless and until some concrete steps are not opted to dig out the fundamental grounds of proposed economic collapse

By MZ Mughal

As soon as Pakistan succeeds to slip out of Financial Action Task Force (FATF)’s grey list, another looming threat of proposed default has set rolling. After entering into a white category, the international trade doors are wide open to Pakistan, the government and their allies are expected to sit tight to boost up the economic situation but ironically, taking the current economic situation for granted, almost every major political party has opted to build a narrative of levelling allegations at former government, trying to frame the public opinion in a self-designed canvas. No one seems to have the will of bringing forth the true facts and reasons for the prevailing dilapidated economic situations in Pakistan except handpicked independent financial analysts or experts.

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Talking about the government’s top economic guns, both are paradoxically busy in throwing mud at one another and their policies. Just consider, at one end, the deep-powered circles managed to import and induct the court-declared fugitive Mr. Dar back to business by portraying him as the sole saviour of the ongoing economic crisis but unfortunately, the tall claims of that circle and PDM as well, have been proving like building a castle in the air. If Mr. Dar talks about the East; his predecessor, the ex-finance minister from the same party outfit speaks about the West. Miftah openly raises alarm bells as Pakistan creeps towards default and claims the KSA’s assistance would only sustain the default threats for a few weeks. In such circumstances, at least the masses should realize the bone-cracking fact that our economic cruise has badly been stuck into the muddy drain, sinking slowly and gradually unless and until some concrete steps are not opted to dig out the fundamental grounds of proposed economic collapse.

Imagine, the level of sincerity of the watchdog that just a few months ago media used to remorse over different issues and challenges faced by masses like inflation, soaring dollar price, worst economic situations, unemployment, depleting reservoirs, LNG import crises etc. After the regime change, seemingly all these issues have been multiplied as they were at that time but unfortunately media has other non-issues to prioritise. Everyone is found scolding the former government over escalating dollar prices, and no doubt it merits to be talked about at all forums but, today, the economic situation has turned worst but meaningful silence prevails everywhere, no daily press conferences on inflation, no protests outside Assemblies, no daily talk shows on LNG import and other crisis.

Every economist verifies the veracity of vanishing dollars from the market whether by smuggling or by hoarding along with the dollar price difference between the State Bank of Pakistan (SBP)’s issued rates and that of being purchased and sold in open market. The major contributing element to the dollar shortage is the existing difference between the dollar’s officially notified rate and the market cash price rate. It’s only tolerable if the difference remains in the capacity of cents or coins but if the difference arises up to rupees, it shatters the investors’ confidence to float dollars in the market. At the time, approximately, all the commercial banks are displaying and further predicting a massive decline in dollar imports and reserves, whatever the reasons may be, but another major contributing factor to dollar slackness is lack of trust being displayed by overseas Pakistanis in sitting government and the ever abysmal economic situation of Pakistan. It’s also a fact that a large number of overseas Pakistanis are reluctant to accept the abrupt regime change in Pakistan at a time when Pakistan’s economy was moving on at an exceptional pace. That’s why the deposits of overseas Pakistanis in Roshan Digital Account have massively been withdrawn since April this year, at yet.

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On one end, the financial experts are turning as helpless to reign in the uncontrolled economic bull, on the other hand, the particular business community is playing from the front to further destabilize the dollar rates ultimately cast a negative impact on the economy. Usually, they prefer to withdraw their earnings from foreign accounts generated from the international market through exporting local products, at a time when dollar prices get an escalating trend that artificially contributes to framing a dollar shortage trend and ultimately dollar prices get a soaring trend in the market. As per law, there is no legal binding to withdraw amounts from international accounts within fewer days and such morbid practice helps create an artificial scarcity of dollars in government reserves.

To some extent, claims and furies raised by overseas Pakistanis appear as deeply routed and true that whatever, Mr. Khan did with Pakistan as compared to his electoral claims but at least, he gave overseas Pakistanis the right to vote for their choice of government in their motherland but as soon as the regime change operation materialized, they are deprived of their conferred right by new government. So to say, their stance justifies their anger and wrath.

In Pakistani politics, the element of favouritism existed throughout political history; we find numerous followers who would not let a second thought pop up into their mind if they are asked to vote for a tree or electric pole by elder Mian sb because he enjoys a strong loyal voting bank. The same is the case with the Jiyalas of Bhuttos and Zardaris in Sindh. The point to ponder is that in such circumstances, how well-educated voters and party workers of an exceptionally renowned party could be restricted to show solidarity with their leader. If it’s done to them, then they have their own powers and rights to give a parallel reaction.


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