Amid ongoing economic catastrophe, Pakistan for the first time in 75 years has surrendered its Hajj quota to Saudi Arabia. Pakistan took this decision due to the country’s rising inflation, which has led to thousands of Pakistanis skipping the pilgrimage this year.
As per reports, Pakistan has returned 8,000 unutilised seats, which will save its $24 million. Also, Pakistan’s ministry for religious affairs confirmed the returning of the government scheme quota.
According to reports by the Express Tribune, this move by Pakistan was aimed to save millions in dollars of amount, which the government would have had to shell out for the accommodation of the pilgrims visiting Saudi.
As per the report, Pakistan had earlier announced that there would be no consulting for the Hajj applicants as they had anticipated a shortage in applications. Notably, Pakistan was given the full share for the pilgrimage in 2023, following the government’s long-standing demand to increase the quota.
Meanwhile, the International Monetary Fund is working with Pakistan to conclude a ninth review of a bailout programme. Pakistan and IMF have been discussing fiscal policy measures since February for the stalled funding of $1.1 billion due in November from a $6.5 billion programme that was agreed in 2019.
Notably, several reports have stated that a series of compounding factors have shaken Pakistan’s economy: double-digit inflation has skyrocketed the prices of essential commodities, and interest rate hikes by the U.S. Federal Reserve and other central banks have resulted in a rapid devaluation of Pakistan’s currency, the rupee.
Pakistan’s imports have significantly risen, and exports have remained largely stagnant, widening the trade deficit in recent years. Rising inflationary pressure has increased the prices of crucial commodities like wheat, onions, gas cylinders, etc. The average cost of a 20 kg wheat flour bag in January 2022 was Pakistani Rupee (PKR) 1,164.8.
This shot up to PKR 1,736.5 in January 2023, a 50 per cent rise. This has made a mockery out of Pakistan! Meanwhile, an estimated $40 billion in damage caused by last year’s catastrophic flooding, a budget deficit worsened by large Government subsidies, and an unforgiving debt load have brought the country to the precipice of default.
Highest Inflation after 1975 According to the figures of the Government of Pakistan, the inflation rate has reached almost 27.77 per cent. This is the highest after the year 1975. It has edged closer to a debt default, echoing the cautionary tales of other developing economies, including Sri Lanka and Venezuela. Talks for bailout money from the IMF failed to yield a deal this week and will continue, providing no immediate reprieve. However, the amount on the table — part of a $6.5 billion loan program — is still far from enough to replenish Pakistan’s depleted coffers. According to Geo-Politik, Pakistan has taken 14 loans from the IMF thus far, but paradoxically, they still need to be completed. This, therefore, raises serious questions about the capacity and capability of the Pakistani state to get out of this dead-end.
