How Pakistan Is Working To Improve Its Economy?
The economic crisis is hitting many countries across the globe. Even though the war was between Russia and Ukraine, countries worldwide are facing its wrath, including Pakistan. The economic crisis is genuine for Pakistan. The foreign exchange reserve has been dipping for the country in the past few years. Sri Lanka was recently in the news for its economic crisis and now, if Pakistan wants to avoid the same problem, it is important to take strict measures to manage the country’s economy.
How Is Pakistan Working To Improve Its Economy?
Pakistan is leaning on other countries’ shoulders to revive its economy. Even though a person can take care of their financial condition either by winning Lottery Sambad or taking a loan similar to the winning sum of Dhankesari, a country as large as Pakistan cannot do that. Managing a country’s economy is different and often comes in massive loans from other companies and international organisations.
China, the ally of Pakistan, is lending a helping hand. It has agreed to help Pakistan with a loan of $2.3 billion. Miftah Ismail, Federal Minister of Finance and Revenue, confirmed the status of the consortium loan in a tweet. The loan will be given to the State Bank of Pakistan. On the other hand, the UAE has refused a loan of $2 billion to Pakistan. However, it is willing to provide help in different forms.
UAE has shown interest in acquiring 10-12% shares in the different government-owned companies in Pakistan. If Pakistan agrees to this deal, it will receive funds from the sovereign wealth funds of the UAE. The deal will fall in the buy-back category and will take the form of secured-loan-backed security. Pakistan will have the option to buy back the stakes of the companies when it is in a better economic state. Further, the government is working with other governments to either suspend or increase the time frame to repay the previous loans.
IMF Might Help Pakistan
The IMF might help Pakistan with a USD 2 billion loan. However, it has a prior set of conditions before approving the loan. A few of the conditions include increasing the electricity tariff. It is also expecting an imposition of fees as a petroleum levy. In addition, it wants the government to create an anti-corruption body to examine government corruption.
Even though other countries are facing an economic crisis, Pakistan is receiving special attention because of its previous loans. The two contributing factors to Pakistan’s economic crisis are inflation and depleting foreign exchange reserves. Even though the government is working to improve the financial situation, it is facing a hard time.
Tea Plays A Role In The Economy
Previously, Ashan Iqbal, Federal Minister for Planning, urged the citizens to cut down their tea consumption. It is because currently, Pakistan is importing tea on loan. In fact, Pakistan is one of the biggest importers of tea. On top of that, the country is borrowing money to fulfil the tea demand of its citizens. In FY 2021-2022, the citizens of Pakistan consumed tea worth $400 million. Pakistan is paying a heavy price for tea consumption and the government believes the citizens of Pakistan can help by reducing their tea consumption.
Donkeys Can Help The Economic Crisis
Pakistan currently houses the third-largest donkey population in the world. The current donkey population of the country is close to 5.7 billion. Donkeys are helpful in the current economic crisis because they are of great use to China. The latter country uses donkey hides for creating traditional medicine. The donkey population is reducing drastically in China. Since then, the country has been importing donkeys from other countries.
After sensing the need for donkeys in China, Pakistan agreed to export the donkeys to meet the rising demand for animals in China. The export business of donkeys can help Pakistan revive its economy.
Currently, the government should work to improve the economic reformation. It is imperative to bring credibility back in the international market. It also has the option of agreeing to the conditions of the IMF too. Further, the country needs to cut back both its imports and expenditures. The government is working hard to manage the economic situation of the country and hopefully, it will soon bear the fruits. The short-term measures can be helpful for Pakistan, but now it is time to look for long-term solutions too.