Pakistan has experienced a number of economic upheavals in the last couple of months. High current account deficit, rapid currency depreciation, depleting foreign reserves, plunging exports, with July exports at $2.2 billion versus $2.9 billion from June, skyrocketing fuel prices, rapidly increasing overall inflation and all of these accompanied with power outages resulted in business closures and massive employee redundancies. Overall, the economy went through a storm of events which were triggered by the political instability due to change of regime and Punjab provincial by-election.
However, whole world went through unusual economic upheavals which began due to the pandemic and triggered because of Russia-Ukraine conflict. In case of Pakistan, intensity of the crisis got much higher due to political instability prevailing in the country.
Considering the response to crisis in the developed side of the world, the British government came under pressure on Monday to set out plans immediately to support families through a mounting cost of living crisis, with a leading business group and former prime minister saying a political vacuum cannot be allowed to last.
On Thursday, the Bank of England cautioned that a long recession was on its way as energy prices swell to unprecedented levels, driving inflation to a 40-year high of 9.4 per cent in June and leaving many households on the verge of economic hardship.
Read more: Boris Johnson promises to revamp UK’s post-Brexit economy
Gordon Brown, the country’s finance minister for 10 years from 1997 and prime minister from 2007 to 2010 during the financial crash, said many households were facing an economic timebomb.
35m people – almost half the UK population – face fuel poverty in October when prices rise again.
Time’s running out to change Universal Credit in time. Boris Johnson, Rishi Sunak and Liz Truss must agree an emergency budget this week.
[Thread] https://t.co/D3ulMRaCjm— Gordon Brown (@GordonBrown) August 8, 2022
“Take action this week and deal with these multiple problems that amount to a national emergency.” He added, “you don’t wait till the crisis hits you in October and then say you’re surprised.”
On the other side, in Pakistan, crisis is being treated as no less than a surprise. The country is in process of the revival of IMF’s loan programme since 2019 and the authorities were already aware of the stringent conditions the global lender asks for.
No doubt, some upheavals came as a surprise, but it has been long enough that the government could have coped with these in timely manner only if the political stability existed in the country. Political winning is being prioritized over economic stability which is not letting the country come out of the crisis. Moreover, blame game is so strong that the political parties are inclined towards blaming each other rather than coming up with an effective agenda which can save the country.