ISLAMABAD: Pakistan’s economic crisis is expected to deepen in the foreseeable future, warned independent experts on Saturday, with any delay in the next general elections likely to exacerbate the country’s financial situation amid declining remittances and foreign exchange reserves along with rapidly depreciating national currency.
The Pakistani rupee has lost its value by more than Rs13 against the greenback since August 14 when Caretaker Prime Minister Anwaar-ul-Haq Kakar took oath to the country’s top political office. According to the State Bank of Pakistan (SBP), the remittances sent by overseas Pakistanis also touched $27 billion in the last fiscal year from $31.3 billion immediately before that.
The dramatic decline in these numbers signals a further blow to the national economy since the International Monetary Fund (IMF) projected $32.9 billion of remittances in Pakistan in the ongoing financial year.
The country’s foreign exchange reserves also decreased by $125 million last week due to debt payments before settling at $7.9 billion. All these challenges have emerged at a time when fresh polls are widely expected to be delayed following an announcement by the Election Commission of Pakistan (ECP) to redraw federal and provincial constituencies by the end of the year before arranging the electoral contest.
“The economic turmoil we are witnessing today is neither unusual nor unexpected,” Haroon Sharif, who worked as an economic advisor to governments in the past, told Arab News.
“The interim government neither has any expertise nor mandate to introduce any structural reforms to fix the economy,” he continued, urging the ECP to hold elections as soon as possible to avert further economic disaster.
He noted that people in Pakistan had started protesting against the government due to inflated electricity bills and double-digit inflation, adding the caretaker setup should announce an elaborate energy saving plan that includes changed office timings and carpooling.
Pakistan’s outgoing parliament granted additional powers to the interim government to take important decisions about “existing bilateral, multilateral and ongoing projects” signed with international institutions like the World Bank and the IMF. However, they can neither legislate nor introduce any effective economic reforms in absence of a legislature to fix the economy.
Considering the situation, other economists also asked the ECP to announce the election date to remove uncertainty surrounding the national polls since it would bring a “semblance of stability” to the economic markets.
Syed Atif Zafar, Chief Economist at Topline Securities, described the appreciating US dollar against the Pakistani rupee as the “main cause” behind all the economic ills, including declining remittances and spiraling inflation.
“The inflow of dollars in Pakistan has significantly gone down with the depreciating rupee as exporters are holding their proceeds abroad and foreign workers have been remitting the money back home by using black market,” he said.
Dr Ashfaque Hasan Khan, senior economic and Dean of the School of Social Sciences & Humanities at the National University of Sciences & Technology (NUST), said even the election results were not accepted by all political stakeholders.
However, he added the interim setup had no constitutional mandate to fix the economy. “Therefore, the election commission must hold the national polls to hand over this responsibility to an elected administration,” Khan added.
