Economic state after massive floods
Massive flooding in Pakistan has caused unprecedented loss of life, property and infrastructure in the country.
So far, there have been over 1060 deaths in various parts of the country with the destruction of thousands of homes, business centers and standing crops worth billions of rupees.
Dozens of dams and water reservoirs were damaged due to flash floods along with thousands of kilometers of roads; bridges and other infrastructure were completely damaged.
Accurate estimates of these losses would take time, once the situation normalizes and there is a return of life in the areas affected by the floods.
In any case, losses from summer floods in the country would be no less than 8-10 billion dollars.
This is a big setback for Pakistan’s economy which is already in full mutation. People in flood-affected areas need immediate economic assistance in the form of shelter, food, clothing, medicine and, later, rehabilitation.
There is a need for the nation as a whole to stand up with various government departments including provincial governments to help the flood affected people at this time of crisis in Pakistan.
Due to economic mismanagement, Pakistan is already on the brink of economic collapse.
Assessing the economic indicators of Pakistan, the country is ranked 34th among 39 countries in the Asia-Pacific region.
In a way, Pakistan’s economic crises are getting worse day by day.
And now, after the summer 2022 flood, the economic situation has deteriorated. Unfortunately, despite heavy taxes and exceptionally high levies on all public goods and services in Pakistan, the Pakistani economy is on the downward trend.
Although it is an agrarian economy, essential food items are rapidly becoming out of reach for over 70% of the Pakistani masses.
Inflation is at an all-time high and the development sector is lacking in all areas of socio-economic development in the state.
The budget for all development sectors in Pakistan has been cut to a minimum as non-development expenditure is increasing day by day.
Indeed, it is not resources but economic mismanagement that is seen as the real cause of the deterioration of Pakistan’s economy and the downward trends in the standard of living of 122 million Pakistanis.
In fact, the fundamental responsibility of the government of Pakistan is to identify and prioritize the issues facing the state and society of Pakistan.
Identifying problem areas at an early stage and focusing on resolving them by all possible means and through better economic management could have saved the state of Pakistan from the ongoing economic crises.
But neither the problems identified nor any serious effort has been made to overcome the economic crisis, hurting both the state and society.
As a result, when faced with financial challenges, they resorted to rushing to the IMF for a possible bailout.
The IMF has imposed its own preconditions for the revision and extension of the loan to Pakistan, which includes the imposition of heavy taxes and levies on the poor masses while there is no reduction in the luxury of parliamentarians , government officials and the country’s bureaucracy.
The outgoing and previous government of Imran Khan could neither reform the national economy nor relieve the masses.
The government and its economic managers responsible for managing the economy of the state could neither appreciate the impending financial crises nor take timely measures to avert Pakistan’s financial collapse.
As a result, the country is heading for an economic catastrophe which means a lot for a nuclear state like Pakistan.
As Pakistan’s national economy slides downward, there has been an unprecedented meteoric growth of various cartels in Pakistan.
These cartels control the prices and supply of almost all essential foodstuffs and petroleum with or without government consent.
In effect, the government has become hostage to these internal and external cartels. In most cases, these cartels are part of the government with incumbent ministers, deputies and advisers.
This was a case with the PTI government and there was no change after the coalition government came to power under Shahbaz Sharif.
Currently, the economic management of the state passes through a system of heavy and agonizing taxation on the poor masses which cannot be maintained in the long term.
In fact, the economic management of nuclear Pakistan with rivalries all around and multiple fault lines inside cannot be run like a business nor be left at the mercy of incompetent and unserious economic managers whose tendency is more to spend on their luxuries than to enjoy in Pakistan.
Why send huge delegations to represent the country, which can be done by 2-3 people (the delegation under the President of the National Assembly in Canada is an example of this).
In a crisis situation where flash floods have caused massive human and economic losses, let us focus on: a) the relief and rehabilitation of the masses without any discrimination; (b) reconnect various parts of the country through infrastructure development; and c) devise strategies to stop future floods through the construction of dams and water reservoirs in designated areas.
Along with these measures, the government must take measures for the economic management of Pakistan through serious, innovative and revolutionary measures where foreign economic dependence is minimized.
Non-development spending must be drastically reduced while banning the luxuries of civil servants, the elite and the bureaucracy.
Since political crises and acts of revenge fuel existing economic crises, they must be stopped immediately.
Furthermore, political leaders should sit together and make decisions in the national interest of Pakistan rather than fighting for their small political and personal gains.
— The author is a professor of politics and international relations at the International Islamic University in Islamabad.