Pakistan’s ongoing economic crisis is hitting millions of people, particularly daily wage workers and the working class. The closure of clothing factories and the loss of jobs have left many struggling to provide for their families. The rising cost of living, including soaring inflation and energy prices, has made it even more difficult for these individuals to make ends meet. The upcoming general election and uncertainty in the economy further exacerbate the situation. It is crucial to address these issues and find solutions to alleviate the suffering of the affected population.
The closure of about 1,600 clothing factories in Pakistan has resulted in the loss of approximately 700,000 jobs. This accounts for one-third of the country’s textile factories, which contribute significantly to its export earnings. Daily-wage labourers like Asif Maseeh, who were previously employed by these factories, now struggle to find alternative sources of income. As a result, they are unable to provide basic necessities for their families, including access to education for their children.
The economic crisis has prompted Pakistan to seek its 23rd bailout from the International Monetary Fund (IMF). The interim finance minister has even indicated the possibility of requesting an additional loan due to the fragility of the economy. This continuous reliance on IMF loans reflects the unsustainable financial situation of the country. Furthermore, soaring inflation, anticipated energy price hikes, and the upcoming general election add further uncertainty to the already challenging economic landscape.
The inflation rate in Pakistan has significantly risen, affecting the prices of essential commodities such as wheat flour, meat, and rice. The cost of these food items has at times more than doubled, creating a disastrous situation for the poor and the working class. The government’s decision to phase out energy subsidies, as per the IMF’s lending conditions, has led to sharp price increases for energy and other essential commodities. This has further burdened the already struggling population, forcing them to seek additional sources of income.
The political instability in Pakistan also contributes to the economic crisis. Following the ousting of then prime minister Imran Khan and subsequent protest rallies, economic activity was paralyzed for months. The current interim caretaker administration adds further uncertainty until the next year’s election. Additionally, devastating floods and ongoing security concerns caused by Islamist militants have negatively impacted the country’s economy.
Pakistan’s attractiveness to investors is hindered by its image problem regarding law and order and its reputation as an unfavorable place to do business. The country’s geography and youthful population present potential investment opportunities, especially for labor-intensive industries. However, decades of conflict in neighboring Afghanistan, along with the influx of Afghan refugees, have further strained Pakistan’s resources and stability.
To address the economic crisis, Pakistan has secured emergency funding from the IMF and assistance from allies like China, Saudi Arabia, and the UAE. However, the debt repayment obligations and rising imports bill highlight the urgent need to implement sustainable economic reforms. The Chinese investment in the China-Pakistan Economic Corridor (CPEC) presents an opportunity for economic growth, but concerns arise regarding the ability to generate enough revenue to repay the Chinese loans.
The government’s credibility with its citizens is at stake due to the dire economic environment. As a result, many Pakistanis are willing to take risks to leave the country in search of better opportunities. This emigration further highlights the urgency of addressing the economic crisis and creating job opportunities.
The incoming government after the February elections will face significant challenges in reviving the economy and improving the lives of the affected population. It is crucial to prioritize economic stability, create sustainable employment opportunities, and ensure access to education and basic necessities for all. Only by addressing these issues can Pakistan move towards a brighter and more prosperous future.
