Pakistan’s Economic, Financial Crisis Worsening!
KAKALI DAS

Things are getting out of hand for Pakistan since last year.
First, the massive floods, then weakening economy amid prolonged pandemic. Cash-strapped Pakistan has cut power to households on fuel shortage. On top of that, politics is going nowhere – Imran Khan in opposition against in power Shehbaz Sharif – both busy exchanging remarks.
In the meantime, people in Pakistan are pleading for help – a video recently went viral in which people could be seen fighting over a bag of wheat flour. However, it became clear that the video was older, but from Pakistan. Fact remains that food crisis is worsening.
The reason is not the last two-three months or years or past few decades – one can learn from this how a country can doom its future – it’s also an interesting story that must not be repeated by any other nation.
What is the present condition like in Pakistan?
- Pakistan FOREX shrunk to $10 billion
- Pakistan is crippling under debt
- GDP growth projection is only 2%
- Pakistan PM appealed for aid in Geneva – UAE came to help by increasing assistance to $3 billion
- Given Pakistan’s record, there is lack of IMF support
- Inflation is skyrocketing in Pakistan – 24.5%
- Due to fuel shortage, Pakistan decided to shut markets, restaurants, wedding halls at 8 pm in energy saving plan.

This is a brief summary of the present situation but, how did it come to this?
Let’s understand that!
- We have to go back 70 years to know the cause of present situation – strategic alliance with America. Decision was taken to side by America – in other words become its pawn. Other countries adopted non-alliance. As a result, Pakistan was taken advantage of in the cold war. Pakistan also used America as an economic ally – all kinds of help were provided to Pakistan from the US.
- This caused excessive dependence on America’s goodwill. As a result, military and bureaucracy became too powerful with American support and military rule followed as a result. Half of Pak history is under military dictatorship, but US had no problem as they were friends.
- Supreme Court brought to knees early on, was another mistake – this is the story of Doctrine of Necessity. The doctrine of necessity is the basis on which extra-constitutional actions by administrative authority, which are designed to restore order or attain power on the pretext of stability, are considered to be lawful even if such an action contravenes established constitution, laws, norms, or conventions.
- In 1954, governor general proclaimed state of emergency and constituent assembly was dissolved. Sindh high court ruled against the decision of dissolving assembly. However, chief justice of the Supreme Court deemed it was the right move by governor general, under doctrine of necessity. This extra constitutional action under doctrine of necessity has provided legal cover to dictators – Supreme Court allowed it. 70 years later – doctrine of necessity is buried – but it already got too late as democracy never surfaced like it was meant to.
- Third mistake was one nation, one rule – a decision by West Pakistan (East Pakistan later became Bangladesh). Ayub Khan tightened the rules, and one language was imposed. As a result, people got upset, for example in Balochistan, because of unitary system imposition, when it was hoped that rights would be given under federal structure. But this one nation one unit architecture led to internal crisis and disbalance in Pakistan.

Creation of Bangladesh and split of Pakistan
Next is the split of Pakistan – since when Pakistan could never recover confidently as a nation. When military ruler takes control, they command over everything and assumes the other person is dumb. In East Pakistan (now Bangladesh) elections, Sheikh Mujibur Rahman won, but this was not acceptable to West Pakistan. This led to anger, protests and war in East Pakistan – India stepped in and ultimately Bangladesh formed. May be, Pakistan is still upset over that.
Afghanistan – strategic depth
After Bangladesh, Pakistan’s intention is to spread its reach in neighbouring lands – keeping a strategic depth in Afghanistan. Afghanistan is a different story in itself – the US entered there, seeking Pak’s help and Pakistan obliged, entering Afghanistan with all might. It’s been said that Pakistan received $30 billion as aid from the US after 1948 – imagine how happy Pakistan was to help America fight war in return. To be in power, jihad jumla was thrown – even kids armed with guns – to gain strategic stronghold over Afghanistan. What Pakistan got out of it? Taliban is in power in Afghanistan now.

Kargil Misadventure
Pakistan also wished to keep strategic depth in India – leading to Kargil. Things were getting normal under Nawaz Sharif – discussion and exchanges happening, focus was on solutions. On the other hand, Pervez Musharraf was planning on his own – leading to Kargil misadventure – both sides lost lives, but Pakistan had to plead America for intervention. Pervez Musharraf initiated a coup at the same time, and Nawaz Sharif was ousted from power.
9/11 followed, Pak entered Afghanistan siding with Taliban, sheltering Al-Qaeda – Osama was ultimately discovered in Pakistan. Hence, Pakistan is labelled as a terror state and Financial Action Task Force (FATF) tracks all foreign exchanges and transactions – leading to funding crunch.

Make in Pakistan
Last point which led to the present scenario in Pakistan. Tehrik-i-Taliban, Lashkar – Islamist groups made and trained in Pakistan – sent across the border in the name of jihad. Fundamentalism is seeped into these groups – ‘removing infidels their motive’ – and today they claim to be fighting against these groups!
They deny there are differences. These groups want to bring back glory days of Islam back into Pakistan – their aim is to implement Afghanistan type Sharia firstly in Federally Administered Tribal Areas (FATA), then in whole of Pakistan. Because of this, radicalization is engulfing crisis-hit Pakistan – non-Muslims and westernized Muslims are targeted by terrorist groups.

Conclusion – A Thought
While protecting endangered Islam, they ignored the pertinent problems in the country. Those with money and understanding moved out of Pakistan – no one else thought about it. No one else questioned their use in the name of religion. ‘The country is in danger,’ they shout. But, were these economic problems ever resolved? What have Pakistan manufactured at large scale in these three-four decades?
Even if aid is provided to Pakistan, what can be done? Pakistan lack adequate manufacturing and infrastructure to make advantageous use of money – on top of that is climate change. But, what’s surprising is that Pakistan has more than 7000 glaciers and they are melting speedily due to climate change – 1/3 of country goes under water – did anyone care enough?
It remains to be seen who grabs hold of political control and who gives the solutions. People hope that Imran Khan can provide political stability. But, the world can learn from Pakistan that country cannot be run on religious authority – a country growing steadily in the 80s is begging today – that is a lesson.
(Images from different sources, dated18-01-2023)
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