Opinion Many a crisis: Pakistan’s economic woes pile up as it pays for intimacies between security establishment and extremist groups

Pakistan’s several crises are coming together yet again. Economically, the country is on the verge of becoming a second Sri Lanka with an acute twin deficit problem that requires a large bailout from the IMF or from a bilateral donor. An IMF team is currently in Pakistan and wants the government to consolidate its fiscals through steps that will make the Shehbaz Sharif government more unpopular than it is. Last week, the value of the Pakistani rupee plunged to its lowest against the US dollar as the government loosened control on the exchange rate ahead of the IMF visit. A flood ravaged large swathes of Pakistan last year, wheat is in short supply, and as the long power outage across the country last week demonstrated, electricity companies are struggling. They may soon run out of fuel to keep power generation units running, as forex reserves decline dangerously. Last week, the government raised the prices of diesel and petrol, inflicting more misery on the common man. A timely $3 bn rescue package from the UAE last month, which included a rollover of $2 bn, averted a default by Pakistan. It is not a coincidence that, as with Sri Lanka, Pakistan’s biggest creditor is China, to which it owes $30 bn, nearly a third of its total external debt.

In 2019, the previous Imran Khan government had managed to secure a $6.5 bn package from the IMF, but this was discontinued mid-stream as the conditions were not met. The lending agency was hopeful of restoring the package when Sharif took over last year after unseating Khan. Despite his reputation as a capable administrator and a “doer”, Sharif is evidently paralysed by the fear of going to the people in the election due in a few months, in the face of Khan’s surging popularity.

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The problems had begun during the hybrid civil-military regime headed by Khan and then Army chief, General Qamar Javed Bajwa. Khan left the running of the government to the Army, and the Army used his incompetence to cover up its own. On top of the economic woes, the country continues to pay for the apparent intimacies between the security establishment and violent extremist groups. The Tehreek-e-Taliban Pakistan’s attack on a mosque in the Peshawar police lines, in which over 100 people died, has been a severe blow to the morale of the nation. If accountability existed, the Pakistan Army would be held responsible for what the country looks like today — a basket case with nuclear weapons.