Tuesday, September 26, 2023

Pakistan is South Asia’s weakest economy: World Bank report

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Pakistan is South Asias weakest economyand it will take a huge effort to lift the country out of poverty, Islam Khabar reported.

Pakistan is in the news for its economic collapse amid natural disasters, food shortages and poverty.

Pakistan was hit by unprecedented flooding in July last year, destroying large areas of farmland. The country’s forex reserves, which hit a new low of $4.6 billion, would only be enough to pay foreign import bills for three weeks. Analysts estimate Pakistan’s aid needs at $33 billion.

The world helped then and has renewed its promise. Moved by the UN Secretary-General’s intervention, the better-attuned countries have made generous pledges of about $10 billion. Sensing the urgency, friends including Saudi Arabia and the UAE have invested $4 billion this month, Islam Khabar reported.

It’s been six months since the flood waters receded. But one land traveler (SF Aizaduddin, Dawn 11 January 2023) writes that they remain submerged, with no sign of water management or regrowth. However, to some extent it is understandable. But after so many months there is an acute food shortage.

Imagine that the country with one of the world’s most irrigated fertile wheat fields is short on flour and has no money to import it. Market reports say that a 1200 PKR sack of flour with 20 kg of flour has risen to 3.00 PKR, Islam Khabar reported.

The protracted talks with the International Monetary Fund (IMF) brought the PKR to a three-month low. The Express Tribune (January 12, 2023) quoted a currency exchange expert as saying, “The real value of the Pakistrupee is that on the black market of Rs 260-270 per dollar. The government has kept the currency artificially overvalued. It should let market forces dictate the exchange rate meet the condition of an IMF.”

Unsurprisingly, the World Bank, warning of another global recession, predicted on January 13, 2023 that Pakistan’s economic growth would slow further to two percent in the current year – a drop of two percentage points from the estimate of June 2022, Islam Khabar reported.

The new excuse is climate change as if only Pakistan is affected. Prime Minister Shehbaz Sharif says the country will need $16.3 billion over the next three years for initial efforts to rebuild the country and make it more resilient to climate change.

Sharifs previously scolded Imran Khan for ‘begging’. Now Khan returns the same compliment. He had traveled the world with a begging bowl, now he asks why Sharif ‘wasted’ money to go to the Geneva conference where aid pledges were made.

‘Begging’ continues regardless of who rules Pakistan. But the country does not acknowledge the damage the China-Pakistan Economic Corridor has done to the fragile Himalayas in Gilgit-Baltistan, Islam Khabar reported.
Farmers are hesitant to increase wheat acreage because of the delay in support price announcements.

They are demanding an “Agri Emergency” due to fertilizer shortages and weak harvest prospects. Pakistan’s Kissan Ittehad (PKI) President Khalid Mehmood Khokhar said that instead of boosting domestic wheat production, the government was “supporting farmers of other countries by buying the commodity from them at higher prices,” Islam Khabar reported.

In a report, it said Pakistan’s declining economic output also lowered regional growth. It predicted that Pakistan’s GDP growth rate will improve to 3.2 percent by 2024, which would be lower than the previous estimate of 4.2 percent.
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