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Pakistan’s economic meltdown triggers infighting; blame game among political class intensifies

Challenges rise for Pakistan Prime Minister Shehbaz Sharif

Driven by a near collapse of the economy, uncertainty and risks in Pakistan’s political and security have risen further with impending elections intensifying the struggle for power.

A shortage of fuel and food has led to severe disruption in the supply chain. The fuel shortage has started to have an impact on the country’s business operations and transport services while the liquid petroleum gas (LPG) distributors are now threatening to go on a strike in protest of the government’s move to increase prices.

“It is a grave situation in Pakistan and problems are now erupting from every corner. It is almost like the replay of what we saw in Sri Lanka,” a foreign policy expert told India Narrative. “The current volatility could further push the country into darkness—something that unfolded in Sri Lanka a few months ago,” he said.

The foreign exchange reserves held by the State Bank of Pakistan currently stand at $3.67 billion—not enough to cover even a month’s imports. In a bid to save foreign exchange, Islamabad has had to halt imports of several goods. The country’s currency has been sliding and hit an all-time low of Rs 266.6 against a US dollar on Friday.

The country’s political class has now resorted to doing what it does best -shifting blame instead of  charting a roadmap of economic revival. Prime Minister Shehbaz Sharif has blamed his predecessor Imran Khan for the current economic situation. His Finance Minister Ishaq Dar went a step ahead and said that the Almighty is responsible for the country’s prosperity besides accusing the leader of the Pakistan Tehreek-e-Insaf (PTI) for this economic crisis.

“(Imran) Khan sahab, what have you really done? All this time, you were just busy with politics of persecution and didn’t care about the public,” Dar said in a televised statement.

“In a nutshell, you brought Pakistan’s economy down to the 47th rank. This is the reason why IMF gives us dictation today …we are fulfilling your sovereign commitments,” he said.

Meanwhile, Khan warned that the deepening economic situation may affect Pakistan’s security.

“Today, every Pakistani is worried about security, except for those who do not have a stake in Pakistan..and I am the most worried about it,” Khan said.

Threats from the Pakistani Taliban (TTP), a terror outfit, are already rising. In November, the group claimed responsibility for a suicide bomb blast in Quetta. According to the European Foundation for South Asian Studies (EFSAS), the TTP’s renewed rise, enabled by the Taliban’s steadfast support, will also expand the threat of terrorist attacks in Pakistan, including against civilian targets.

The only silver lining at this point is the fact that the International Monetary Fund could revive its stalled loan programme. An IMF team is expected to visit Islamabad to continue discussions under the ninth review of its loan programme under the Extended Fund Facility (EFF). But to revive the economy, Pakistan would need to concrete plan.

Also read: Pakistan’s forex reserves dip to an alarming $3.67 billion, not enough to cover imports

Pakistan’s massive electricity shutdown throws life out of gear