A study of political, economic and environmental challenges faced by the nation
Shristi Mishra
May 2022
Introduction:
The country of Islamic Republic of Pakistan after 75 years of its independence and its existence as a sovereign state finds itself in a multitude of challenges in the present global and international scenarios. The scope of its problems is diverse and not pertaining to any singular issue; politically, economically, socio culturally and environmentally the country faces multitude of issues ranging from dangerously unstable political state, a severe blow to the foreign exchange, being a victim of China’s debt trap, receiving multiple bail outs from international organizations to a series of devastating floods and draughts.
Political Instability
Pakistan has a history of political instability, and one manifestation of this instability has been the frequent changes in the country’s leadership. The tradition of a prime minister never completing their term has been a recurring feature of Pakistani politics. Since Pakistan’s inception in 1947, no prime minister has completed a full term in office, and many have been removed through military coups or dismissed through constitutional means. The reasons for this instability are complex and multifaceted, but some of the factors include weak institutional structures, corruption, and power struggles between political parties and the military. key elements undermining the viability of the Pakistani state: Islamism, tribalism, ethno-nationalism, and quasi-secularism. The demands of each of these movements are difficult to reconcile with the needs of the others. At the same time, these movements exert pressure on a very weak government and state system. Kefir, I. (2007). The Crisis in Pakistan: A Dangerously Weak State. Middle East Review of International Affairs, 11(3), 75-88.
political stability in context of identity and legitimacy crisis in Pakistan the instability of government, inefficiency of political parties, and a weak political culture create the scenario for a politically instable state. Political instability has become a serious problem especially for the developing and underdeveloped countries. Memon, A. P., Memon, K. S., Shaikh, S., & Memon, F. (2011). Political Instability: A case study of Pakistan. Journal of Political Studies, 18(1), 31.
In light of the existing political crisis, recently it has been noted that the Pakistani parliament has passed a no-confidence motion in the house against the current government of the Pakistani Tehreek-e-Insaaf (PTI) led by former cricketer turned politician, Mr. Imran Khan, the opposition parties formed an alliance led by the Pakistan Muslim League leader, Mr. Shahbaz Sharif on March,08,2022 on the grounds of uncontrolled inflation, the tabling of the motion was delayed due to the due procedures of the house, while voting on the matter commenced, Imran Khan viewed such action as a foreign threat against his government. As many as 172 members voted in favor of the motion, in a 342 membered house.
However, the consensus towards the motion was slowly brought about by the Pakistan People’s Party loyalist Khursheed Shah among other leaders hinted on an in-house change claiming that the opposition would have the majority in house on the concerned matter and wants a dissolution of PM’s government. (A Timeline of How Imran Khan Ousted in No-confidence Vote, ANI)
The support of the opposition in the house amounted to Khan’s removal from the office and the cabinet’s resignation and with the support of majority, Pakistan Muslim League (N) Leader Shahbaz Sharif assumed the office of Prime Minster as a by-product of the proceedings of the Pakistani Parliament.
While the Khan government has strong military support that rose the government to power, the government itself marks the pages of history, as being the first government to be removed through constitutional methods in the nation of Pakistan. The frequent changes in leadership have had significant consequences for the country’s political and economic development. They have disrupted policy continuity, hindered the implementation of much-needed reforms, and eroded public trust in the political system. This instability has also created opportunities for authoritarianism and military rule, which have further weakened democratic institutions in the country.
Moving forward, it is essential for Pakistan to address the root causes of political instability and work to strengthen its democratic institutions. This could involve measures to improve transparency and accountability in government, promote a culture of respect for the rule of law, and create more opportunities for civic engagement and participation. It is also important for political parties to prioritize the interests of the country over their narrow political interests and work towards building consensus on key policy issues.
Economic Crisis
Pakistan adopted economic stabilization and structural reform policies in 1988 to reduce domestic financial imbalances and external deficits. However, these policies were not able to achieve their objectives, leading to poverty, low growth, low savings, and low investment. A financial crisis hit Pakistan in 1998, triggering the Government to freeze all foreign currency accounts and private sector remittances. Government policy reforms in the financial and monetary sectors refer to policies in 1988. 1987/88 marked a watershed in economic policymaking in Pakistan, as the country turned away from inward looking policies towards trade liberalization and export promotion. This led to substantial growth in export earnings, but there is still scope for improvement in trade liberalization and export promotion policies. This was due to persistent expenditure overruns, narrow tax base, low elasticity of tax system, and heavy reliance on international trade taxes. Liberalization and Economic Crisis in Pakistan Mohammad Zubair Khan (2009) Khan, M. Z. (2009). Liberalization and economic crisis in Pakistan. Rising to the Challenge in Asia: A Study of Financial Markets: Asian Development Bank, 9.
Pakistan is facing an economic crisis characterized by a large fiscal deficit, a high debt burden, and a balance of payments crisis. The COVID-19 pandemic had further worsened the situation, leading to a decline in economic growth and an increase in unemployment. As of 2023, the foreign reserves crisis of the country has deepened significantly as forex held by State Bank of Pakistan (SBP) has reached an all-time low of USD 4.343 Billion, which amounts to a total of three week’s import for the country.
The deficit as quoted by the State Bank of Pakistan (SBP) in financial year 2021-22 was $17.4 USD. The debt held in the name of the country increased by 30 percent from Rs. 42.39 in January. In the Financial year 2021-22 the real GDP growth of the country was measured to an equal of 6%.
Pakistan Consolidated Fiscal Balance recorded a deficit equal to 21.268 USD bn in Dec 2021, compared with a deficit equal to 21.366 USD bn in the previous year. Pakistan Consolidated Fiscal Balance data is updated yearly, available from Dec 1991 to Dec 2021, with an average ratio of -5.435 USD bn. – (Pakistan Consolidated Fiscal Balance, 1991 – 2023 | CEIC Data, n.d.) Due to foreign price increases and infrastructure limitations, the import bill and fiscal imbalance grew worse, and the domestic industrial sector was negatively impacted. As a result, poverty rose, and farm laborers were worst hit by the financial system’s discrepancies. Ahmed, V., & O’Donoghue, C. (2010). Global economic crisis and poverty in Pakistan. International Journal of Microsimulation, 3(1), 127-129.
The country’s economy is moving into a spiral with shooting fuel prices, dropping country rupee prices and the tax on luxury goods on an ever high However, these changes are not necessarily only attributable to financial crisis, as other factors may have come into play such as the rise in fuel and food prices preceding the crisis. Addressing the economic crisis, the Pakistani government had implemented a series of measures, including seeking financial assistance from international organizations like the International Monetary Fund (IMF), implementing austerity measures to reduce government spending, and pursuing structural reforms to improve the business climate and attract foreign investment. The country has been focusing on securing the 6.5-billion-dollar bail facility offered by the International Monetary Fund (IMF). (Sharma, 2023)
However, the financial body has laid down various conditions for Pakistan to overcome the economics collapse. The IMF wants Islamabad to make efforts to boost its incredibly low tax base. It further wants Prime Minister Shahbaz Sharif’s government to end the tax exemptions for the export sector. The most brutal point of contention, according to the reports in Pakistani media, is the IMF’s expectation to hike petrol, electricity, and gas prices — that Islamabad says are meant to help low-income families.
The government of Pakistan has come forward with a cost- cutting formula which includes for the ministers to forgo their perks to save money to bail out the country from crisis and save the country a sum of 200 billion rupees a year. The National Assembly of Pakistan has unanimously approved the governments Finance (supplementary) bill 2023 or ‘mini budget’ in accordance with the bill, the sales tax has gone up from 17% to 25% on imports ranging from cars, household appliance, chocolates and cosmetics. A general sales tax hike was made from 17% to 18%.
Amidst all the crisis, the countries like Iran and China have lend a helping hand to the country Iran has established six border markets to promote trade with Pakistan, said Iranian Consul General Hasan Noorani, which may help the crisis struck country. In the last 10 months, the volume of bilateral trade reached $2 billion dollars, which is set to touch the $5 billion mark. China came to the country’s rescue by lending 700 billion USD.
However, the government’s economic policies had faced criticism from some segments of society, who argued that the austerity measures had led to hardship for ordinary people and that the reforms were not sufficient to address the root causes of the economic crisis.
Moving forward, it is essential for the Pakistani government to continue implementing measures to address the structural issues underlying the economic crisis, including improving tax collection, reducing corruption, and investing in infrastructure to promote economic growth. The government should also prioritize policies that support the most vulnerable segments of society, including measures to address poverty and unemployment. Finally, the government must work to strengthen its partnerships with international organizations and the private sector to promote sustainable economic development in the country.
Climate Change
August of 2022, brought about record rain in the nation of Pakistan, the rain was eight times more than the record rain after 1961. As a result of which, the nation was hit by devastating floods, which affected about 9 million people, with almost 1700 dead and 7.9 million people displaced from their homes, Sindh, Baluchistan, Khaybar Pakhtunkhwa are the majorly affected provinces. (Hirscher, 2022)
The country faced a loss of PKR 3 trillion, combined with the loss of life and property. The river Indus, which is a major lifeline of people of Pakistan and flows across the length of the country had a major outflow on its banks which lead to a chain of calamities affecting the country one after the another.
The provinces have seen an immense increase in rainfall with Sindh at +726% and Baluchistan at +590%. The country’s meteorological department calls it the ‘Wettest August since 1961’. (Climate Change Likely Increased Intense Rainfall in Pakistan: Study, 2022)
The World Weather Attribution claims the sudden and strong flood to be caused due to climate change, moreover the scientists have found coming monsoon rains to be less and less reliable. (World Weather Attribution – Exploring the Contribution of Climate Change to Extreme Weather Events, n.d.). According to their research, there will be a series of draught and floods affecting Pakistan and neighboring countries. The world currently faces an effect that the scientists describe as La Niña effect also sometimes called El Viejo, anti-El Niño, or just as
‘Cold winds.’ In this phenomenon, the trade winds become stronger than usual, pushing warmer water towards Asia. This leads to drought in southern USA and heavy rain and flooding in Pacific northwest and Canada. The effect also played a major impact in 2010 floods in Pakistan. (What Are El Nino and La Nina? 2018.)
Pakistan is one of the most disaster-prone and vulnerable countries in the South Asian region. The Climate Vulnerability Index of 2019 ranks Pakistan as the 8th most affected country by extreme weather events from 1997 to 2016 (German Watch, 2019)
The flood is also responsible for a set of waterborne diseases spreading throughout the country, the most communicable being dengue, millions of people across the country are hospitalized and thousands succumbed to the disease. The government of Pakistan and the Red Cross are working together to help mitigate the aftereffects of the floods and bring life back on track as soon as possible. One in every 7 people are affected by the floods, for context that is equivalent to almost half the population of the UK. (Climate Change in Pakistan and Devastating Floods: Latest News, 2021)
In such a situation, the Pakistani government would need to act swiftly and provide emergency relief to the affected communities, including food, shelter, and medical assistance, hygiene kits, mosquito nets. The government should work with humanitarian agencies and other organizations to coordinate the response efforts and ensure that assistance reaches those in need.
In addition to emergency relief efforts, the government would also need to address the long-term impact of floods on the country’s economy and infrastructure. This could involve investing in flood management infrastructure, such as dams and levees, and implementing measures to prevent deforestation and soil erosion, which can exacerbate the effects of flooding. The country received help from The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) on 30 August 2022, in the form of $160.3 million to help the 70 districts severely affected by the calamities. The UN Secretary Antonio Guterres visited the country on 9 September 2022 to monitor the ground conditions.
It is also important to note that climate change is expected to increase the frequency and intensity of natural disasters like floods in many parts of the world, including Pakistan. Therefore, it is crucial for the government to take proactive steps to mitigate the impact of such events and promote resilience in the face of changing climate conditions.
Conclusion
Pakistan has a history of political instability due to weak institutional structures, corruption, and power struggles between political parties and the military. Key elements undermining the viability of the state are Islamism, tribalism, ethno-nationalism, and quasi-secularism. The Pakistani parliament passed a no-confidence motion against the current government of Imran Khan, leading to Khan’s removal and the cabinet’s resignation. This has had significant consequences for the country’s political and economic development, leading to authoritarianism and military rule. Pakistan is facing an economic crisis characterized by a large fiscal deficit, a high debt burden, and a balance of payments crisis. The COVID-19 pandemic has further worsened the situation, leading to a decline in economic growth and an increase in unemployment.
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