Pakistani media took Foreign Minister Subrahmanyam Jaishankar’s invitation of Minister Bilawal Zardari to the Shanghai Cooperation Organization (SCO) foreign ministers’ meeting in May as a sign of a thaw with India after Prime Minister Shehbaz Sharif’s offer to talk with India. Contrary.
Prime Minister Sharif made a conditional offer in an interview with UAE channels on 17 January 2023, and Jaishankar’s invitation was sent through diplomatic channels on 24 December 2022. As SCO President for 2023, India has an obligation to invite all SCO members ahead of the SCO Summit later this year.
Supporters of the India-Park dialogue and India’s dispute resolution industry have painted a similar picture with Pakistan, but there is no change in the bilateral position between Pakistan and India. The message is simple. It is about bringing an end to cross-border terrorism, dialogue and normalization of relations.
Given Pakistan’s economic situation and political currents in the highly radical Islamic Republic, Islamabad’s top priority is to finance the beleaguered country – debt relief. Faced with stringent terms from the IMF on loans to Pakistan, Islamabad has now asked Washington to soften the Islamic Republic to the Bretton Woods agency as Prime Minister Sharif demands higher electricity rates and higher taxes to boost tax revenues. . Such harsh measures would be politically disastrous for the current PDM regime and would give the steering wheel to its adversary and demagogue Imran Khan Niazi.
similar story
Pakistan is not only out of money, but also out of ideas on how to save the country which is starting to unravel at an alarming rate. Things wouldn’t be so bad if it were the economy alone that was on the verge of bankruptcy. But not only is the economy collapsing, politics is also completely polarized, dividing the country, breaking social cohesion and cohesion, and the security situation spiraling out of control due to Taliban militancy.
The multi-crisis facing Pakistan is getting worse by the day. Because each component crisis is reinforcing the others and there is no clear exit for the current regime. Simply put, Pakistan is drowning, but Pakistanis seem to think they will swim out of these troubled waters because the world will not see them sink. But the world doesn’t seem ready to bail out Pakistan until it is ready to help itself. But Pakistanis are more preoccupied with their own political circus than sweeping economic reforms that could pull them out of the pit.
The plethora of Pakistani elite politicians, soldiers, civil servants, landlord gentry, businesses and trade organisations, who have seized control of the country and its resources, has reached a point where the economy has bottomed out. At this point, the focus is on trying to avoid a default that would burn the economy and plunge it into civil and political chaos that could spiral out of control. While there is no doubt that a default will cause unbearable pain, the incorrigible Pakistani elite are intent on terrorizing the rest of the world to keep Pakistan’s economy going. Just as they used flooding as a bargaining chip to get international lenders to slack, now they are using the imminent economic collapse as a bargaining chip.
Basically, Pakistan is threatening the world with its nuclear weapons gone, radical Islamists rampaging and threatening to take over the country in revolution. The scary thing is that these fears that Pakistan is selling are as exaggerated as in the past. Pakistanis may romanticize the revolution, or at least there is no cover for an Islamic revolution that would do the worst damage to elite privilege.
Nonetheless, the economy is at a dead end right now. Once the IMF program gets back on track, it will probably put off the sluggish economy for several months until June 2023, when the current fiscal year ends. Pakistan needs about $10 billion over the next six months. Through the IMF program, they will be able to raise this amount by buying some assets with Saudi Arabia for about $2 billion, UAE for another $1 billion, China for $2 billion and Qatar for about $2 billion. However, this only lasts until June.
In the next fiscal year, Pakistan will need more than $30 billion. Will the same friends pour endless money into Pakistan? Already, the IMF is imposing very onerous conditions to reinstate the expanded financial facilities program. The consequences of these conditions would be financially devastating to the people as well as politically devastating.
Inflation is expected to rise by 40% to 50% as fuel prices skyrocket, electricity prices rise and gas prices skyrocket. Also, Luffy collapses. According to currency traders, the moment the rupee is allowed to remain liquid, it will depreciate from an artificial level of 230 to around 260-270. Some analysts fear that the rupee could break through the 300 line in a few months. This will lead to already massive inflation.
To control inflation, Pakistan needs to raise interest rates. This will increase the cost of doing business to unsustainable and unviable levels. But to make matters worse, rising interest rates will destroy whatever is left of the government’s fiscal position. Even at the current 17% interest rate, there is a real risk that the cost of servicing debt will exceed the federal government’s total revenue.
The stark reality of Pakistan is that default is inevitable. It is not a matter of if, but a matter of when it will happen. The only viable option is to seek debt rescheduling. But this is just as bad as a default as it comes with a stiff nose enough to make the current IMF situation seem soft. But Pakistani politicians and military leaders are hoping the storm will pass.
Clearly Pakistani elites and generals want the rest of the country ready to make sacrifices, but are not prepared to cut their own costs or privileges. They want royal ceremonies, golf courses, vacations in Dubai, send their children to Western universities, and receive unscrupulous subsidies from the country’s empty coffers, but deny ordinary Pakistani citizens even basic rights to life.
The Pakistan Army is also not prepared to cut costs. Pakistan continues to purchase expensive weapons systems it can no longer afford. To make matters worse, you’re on a strategic adventure on both sides of the border that proves to be unmanageable. The only way to cut the military budget is to improve the strategic environment and normalize relations with India and Afghanistan without existing conditions and actions against Pakistan-based terrorist groups.
But Rawalpindi GHQ says this is not happening because the military has no appetite for a paradigm shift in its strategic direction towards India and Afghanistan. In the past, tactical coordination created space. Anymore. New Delhi has grown wise to Pakistan’s machinations and does not feel the need to reciprocate tactical moves that only benefit Pakistan. In any case, the Taliban are now showing their true colors and are likely to leave Pakistan’s western borders in chaos, radicalizing and destabilizing the entire region.
Like the military, the political class is more interested in saving political capital and securing its political future than in saving the country or its future. In a situation where the country is on the brink of ruin, political strife is bizarre. Imran Khan wants immediate elections which he thinks he will sweep. Since the ruling party has nothing to campaign for, he wants to delay the election as long as possible. The Army doesn’t want to disrupt democracy, but it wants to keep shooting. I also don’t want to see Imran Khan return to power, at least not immediately, and I’m ready to stop him by hook or by crook.
For now, it looks like the government will sign the dotted line and return to the IMF program. But within a month or two, they will start spending money to regain political support. This means that by the time elections are held and a new government comes to power, Pakistan will be in a more serious crisis than it is now. That said, no matter how you cut this, Pakistan’s economy and with it its current state and political structure are headed for collapse.
Thank You For Your Vote!
Sorry You have Already Voted!
