With Pakistan reluctant to satisfy IMF conditionalities and staring at a sovereign default financial programme that expires at the end of June 2023, the Shahbaz Sharif government is between a rock and a hard place as the Islamic nation has recorded the highest inflations ever since 1957.
As per leastest report, Pakistan has surpassed Sri Lanka and has recorded the apex inflation at 38 per cent in May 2023. On the other hand, inflation in Sri Lanka has come down to 25.2 per cent after Pakistan overtook Sri Lanka in April 2023.
While Pakistan has boxed way above its weight category, first due to the US in the past century and now followed by China and tried to compare itself with India, the inflation rate under the Modi Government stands at 4.7 per cent in May, up from 48.1 per cent in April 2023.
The Pakistani government’s negotiations with the International Monetary Fund have further skewed after Nathan Porter, the IMF mission chief, went on record and stated that he hoped that the current political crisis in Pakistan was resolved in line with the constitution and the rule of law.
This statement was slammed by Pakistan’s Defence Minister Khwaja Asif, who found Porter’s statements that were tantamount to meddling in Pakistan’s political affairs. Asif took the umbrage to Porter, commenting on the domestic politics of Pakistan rather than giving the much-required USD 1.1 billion-dollar loan to the Islamic nation.
While Pakistan’s leadership feels that the Peoples’ Republic of China or their all-weather friend and iron brother cum mentor will come to provide financial support if the economic situation goes south due to no IMF board meeting this month, the crisis in the Islamic Nation is far deeper and worse than it appears with the nation being polarised by the large scale mayhem and violence caused by the supporters affiliated with former prime minister Imran Khan and his Pakistan Tehreek-i-Insaaf Party (PTI).
Due to Niazi’s continuous attacks and allegations against the Pakistan Army establishment, the general public doubts the capability of the General Headquarters in Rawalpindi to stem the deep rot within as the army itself was found divided on May 9, 2023, The PTI party supporters torched the residence of the Lahore Commanders Corps (Jinnah House Residence).
The Islamic nation is at its knees, with the Pakistani judiciary, political leadership, and Military pulling in different directions. Insurgencies are rising in Balochistan, Sindh, coupled with the menace caused by the terror group Tehreek-I Taliban (TTP), which is targeting Pakistan’s armed forces in the heart of Punjab and Khyber Pakhtunkhwa is surely a sign of the collapse of Pakistan.
Rather than focusing on how to co-opt Kashmir, trigger Khalistan in Indian Punjab and create strategic space in Afghanistan, the Shahbaz Sharif government should get its act together and focus internally to arrest Pakistan from hitting rock bottom.
The history of inflation cases in Pakistan is not new, In April 2023, consumer prices rose to 36.48 per cent, transport prices climbed 56.8 per cent, and food inflation quickened by 48.1 per cent. Food prices rose 2.4 per cent in April 2023 from March 2023.
Inflation is among the most persistent issues affecting peace and stability in Pakistan.
Several factors are responsible for contributing to and incrementing inflation. The first cause comes from the fact that the state has been in a balance of payment crisis, leading to the devaluation of the Pakistani Rupee.
As a result, the prices of imported goods have increased, increasing the general price level. Secondly, the nation is heavily dependent on oil imports, and the rise in oil prices has contributed significantly to inflation.
The policies pursued by the government and the actions such as borrowing and heavy taxation have caused inflation to rise rapidly. The shortage of gas and electricity, along with various other essential resources, has impacted production capacity and higher manufacturing, ultimately translating into higher prices for end consumers.
Lastly, the social and political unrest in the country has led to a decrease in foreign investment, causing economic instability and inflation.
