Pakistan Financial Crisis: ‘Laughter’ Imran or flood disaster… Who drowned Pakistan more? Good news or danger for India? – pakistan economic crisis may be a reason to worry for india know how pakistan economy collapse
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Experts say running a ‘political economy’ dependent on aid and grants from its allies and international organizations has taken a toll on Pakistan’s financial health. Governments have been accused of spreading taxes and making little effort towards increasing sources of revenue. Apart from this, heavily subsidized electricity bills, selling the cheapest petrol and diesel in South Asia, Pakistan’s economy suffered a lot. Figures for the past two decades show that the revenue deficit in 2004 was $2.25 billion. In 2019, it reached a peak of $25.31 billion.
How much did Imran Khan sink the country?
The current Shahbaz government of Pakistan and many analysts hold the previous Imran government responsible for the plight of the neighboring country. Finance Minister Ishaq Dar told media persons in Islamabad on 28 January that Imran’s economic mismanagement had led to a ‘serious financial crisis, inflation, a large difference between the dollar and the Pakistani rupee, and huge debt’. Inflation averaged 3.93 per cent in FY18 before Khan was elected prime minister. After one year in 2019, it increased to 10.58 percent. In 2022, it was recorded at 12.2 percent. Imran is also criticized for the delay in seeking help from the IMF.
Floods displaced 33 million people
Pakistan experienced catastrophic floods during the monsoon between July and September last year, which hit the economy the most. World Bank figures for October show that the floods killed 1,739 people and destroyed $40 billion worth of infrastructure. The flood destroyed over 8 million acres of crops and displaced 33 million people. Pakistan’s crisis reminds of Sri Lanka. In mid-2022, Sri Lanka’s economy collapsed completely and the country’s foreign exchange reserves were empty. The economic crisis created by the burden of foreign debt also gave rise to political instability.
Shahbaz looking towards India
At present, India has not given any reaction on the crisis of Pakistan. Although Shahbaz Sharif is indirectly seeking financial cooperation from India. Recently, he had said that in the last seven decades, the war between the two countries has caused only economic loss. Economic instability means that Pakistan will now lack the resources for anti-India activities. However, some analysts in India see Pakistan’s flailing economy as a matter of serious concern for India and feel that it may have strategic and security implications.
Why is the Pakistan crisis worrying for India?
Speaking to the news website Moneycontrol, Saureesh Ghosh, an independent researcher, said that if the Pakistani economy completely sinks, there is a possibility that India may face a refugee crisis. If Pakistan fails as a state, the influence of terrorist networks within the country may increase and this may harm Indian interests. He said that both Sri Lanka and Pakistan are going through an economic crisis. In such a situation, SAARC will lose its importance and China can come forward to save Pakistan.
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