Explained: Why Pakistanis have been told to drink less tea amid economic crisis

"I appeal to the nation to reduce tea intake by one or two cups daily because we borrow money for tea import as well,” Federal Minister for Planning and Development, Ahsan Iqbal, said on Tuesday. What does Pakistan's economic crisis have to do with tea? We explain.

Social media users in Pakistan, which is one of the largest importers of tea, didn’t take his advice too well, with some recommending that he be “cancelled” instead of chai.

Written by: Rahel Philipose

3 min readNew DelhiJun 16, 2022 01:36 PM IST First published on: Jun 16, 2022 at 01:36 PM IST

A senior Pakistani minister sparked a storm on social media after he recommended that people reduce their daily cups of tea to help curtail the country’s import bill amid a rising economic crisis.

“I appeal to the nation to reduce tea intake by one or two cups daily because we borrow money for tea import as well,” Federal Minister for Planning and Development, Ahsan Iqbal, said on Tuesday. Social media users in Pakistan, which is one of the largest importers of tea, didn’t take his advice too well, with some recommending that he be “cancelled” instead of chai.

Iqbal also suggested that traders close their tea stalls earlier to save electricity.

What’s happening in Pakistan?

For months now, Pakistan has been dealing with a worsening economic crisis, which has led to a sharp increase in the cost of food, gas and oil. The country’s foreign currency reserves have been dwindling, leaving the country in dire need of funds.

Presently, funds held by the central bank have dropped to about $10 billion in May from $16.3 billion at the end of February, Reuters reported. The country is said to have just enough funds to cover about two months of imports, according to a BBC report.

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The economic crisis was at the centre of a political showdown between Prime Minister Shehbaz Sharif and his predecessor Imran Khan last month, which ultimately ended with Khan’s ouster in a no-confidence vote. The Sharif government has been saddled with the unenviable task of combating rising inflation and bringing the economy back on track.

What does the economic crisis have to do with tea?

“The tea we import is imported by taking a loan,” Iqbal said during a press conference this week, adding that businesses should also try to save electricity.

Pakistan is one of the world’s biggest importers of tea, buying more than $640 million worth in 2020, according to the Observatory of Economic Complexity.

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Last month, officials announced that they were restricting the import of several non-essential luxury items to reduce costs. But critics said the measures were introduced too late and would only contain the import bill by about $600 million, which is about 5 per cent of projected imports, The Independent reported.

The import of items like cars, cosmetics, mobile phones, toiletries and cigarettes were impacted by the Pakistan government’s decision.

Apart from massive debt, the country is also grappling with a worsening energy crisis. Several towns and cities across Pakistan have been experiencing widespread blackouts for several hours.