Pakistan's
financial crisis has heightened tensions with the disaster unfolding in
neighboring Sri Lanka. Following the new emergency, ejected President Gotabaya
Rajapaksa was held in Hambantota in southern Sri Lanka, until he was forced to
flee the country entirely. That continues a pattern of the city, particularly
its vital distant ocean port, being in the news for a variety of unfavorable
reasons. When Sri Lanka was struggling to make obligation repayments on time in
2017, it sold a 99-year lease of the port to the Chinese company that had built
it for a quick profit. Numerous examiners and professors published papers
identifying Hambantota as Exhibit A in the theory that China deliberately lures
non-industrial countries into a "debt trap" by granting them cheap
loan credits to fund lavish foundation projects.
Likewise,
various analysts and journalists have warned that the same fate might befall
Pakistan, where Chinese experts have been actively engaged in venture projects,
particularly under the China-Pakistan Economic Corridor (CPEC) since 2015. The
Chinese, like Sri Lanka's Hambantota, have been aggressively investing in
Gwadar, a remote ocean port in Pakistan's southern Balochistan province that
serves as the focal point of CPEC in Pakistan. Following that, the information
concerning the Hambantota port sent alarm bells in Pakistani command and
control rooms. That is what some predicted if Chinese influence increased
further in Gwadar; otherwise, it may follow the example of the Sri Lankan port,
for a variety of unfavorable reasons.
Today, Sri
Lanka's current political and financial situation has deteriorated
significantly, resulting in the country defaulting on its obligation payments.
In the face of a lack of essentials, Sri Lankans have participated in mass
battles. Furthermore, although Rajapaksa has been forced to stop, the emergency
is unlikely to be resolved very soon. He was succeeded by Prime Minister Ranil
Wickremesinghe, who is also detested by the majority and considered an example
of political norms.
Pakistan
(along with other non-industrial nations) has once again been the subject of
discussion in light of the devastation in Sri Lanka, with concerns raised over
whether the country may follow in Sri Lanka's footsteps.
Without a
question, Pakistan has a shambling economy that is currently deteriorating from
bad to worse as a result of political fragility. There is widespread
unemployment, although the rate of expansion has skyrocketed. In addition, The
News, an English popular daily in Pakistan, reported recently that the value of
the Pakistani rupee vs the US dollar had fallen by more than 4,100 percent,
from 4.76 rupees per US dollar in May 1972 to an incredible 200 rupees for
every dollar on May 18, 2022. The Pakistani rupee's depreciation against the US
dollar continues, and it is currently at 225 for every dollar at the time of
writing, exacerbating the country's monetary woes middle to dwindling unknown
trade holds.
Pakistan,
like Sri Lanka, has requested Chinese investment to bolster its faltering
economy. As a result, some experts believe that powerful Chinese interests in
Pakistan pushed the country to the brink of financial collapse. That story,
however, is distorted: The majority of Pakistan's troubles, notably its
financial issues, stem from the construction of its blunder, a lack of
planning, political weakness, and, most crucially, the deterioration of
relations with neighboring nations who had previously had good relations with
Pakistan.
A good
example is former Prime Minister Imran Khan's new assembly, which took office
in 2018 and was ostensibly completely supported by a robust security framework.
During his tenure, which ended abruptly in April 2022 due to a no-confidence
vote in parliament, Pakistan's ties with India improved companions of Pakistan,
these two nations have lately supported Pakistan in its time of need.
In the
meantime, China, Pakistan's all-weather partner, has been frustrated with
progress on CPEC projects, which have been scaled back under Khan's rule. As
Pakistan's financial crisis became apparent, Islamabad's allies were less
prepared than planned to assist.
Pakistan's
ties with the US are perhaps the quietest. Washington remained enraged at
Pakistan's role in backing the Taliban in Afghanistan, to the point where US
President Joe Biden did not contact Khan after taking office. The downward
slope did not finish there. Khan went above and above, visiting Russia in
February 2022, which was guaranteed to enrage the US – it turned out to be the
day Moscow began its invasion of Ukraine.
At the time
of his expulsion from parliament by a no-confidence vote, Khan blamed the
United States for his downfall. He assured the media and public social
gatherings that he was the target of US collusion to remove him from power.
Khan's strategy was to campaign against US beliefs in Pakistan to gather votes
and seduce his political opponents - and it succeeded. Because of his fiery
speeches and the wave of expansion that began during his reign, his party
earned a larger share of seats in the recent by-elections in Punjab, the most
populous province in the country.
Most
crucially, Pakistan's solid security base has increased its role and effect in
many sectors, including political concerns. It is well known in Pakistan that
lawmakers go and forth on the tactical's approval. In any case, the security
foundation's hegemonic power has brought the country to a halt, preventing it
from progressing. This issue is the source of the majority of Pakistan's
difficulties, especially its monetary and political fragility. For example,
Pakistan's security-focused approach to dealing with neighboring psychological
oppressor groups landed the government into the shadow list of the Financial
Action Task Force (FATF), with monetary consequences. Progressive state-run
governments have fought to remove Islamabad from the list (and remain off it).
As the
financial crisis worsens, the parallels to Sri Lanka become unsettling.
Pakistan, like Sri Lanka, is experiencing a growing shortage of foreign trade
restrictions, limiting its ability to import basic needs like food and
gasoline. Also, like in Sri Lanka, monetary turmoil is being used as a
justification for political conflict. If what is going on continues, Pakistan
may face huge battles and a lack of initiative.
One
prominent Pakistani writer, Zahid Hussain, has stated that Pakistan should act
now to avoid being involved in Sri Lanka's fate. "It is self-evident what
caused Sri Lanka's monetary meltdown." Because of a lack of unfamiliar
commerce, the country has been unable to pay for imports of even necessities Fuel is a basic commodity. In
reality, the crisis has been building for a long time as the country piled up
unknown debts totaling $5 billion," he wrote for Dawn, a Pakistani daily.
"...Many
rising nations, including Pakistan, can compete on a comparable basis." We
are not yet in Sri Lanka's shoes, but we are not far away, as there are a few
quite equivalent negative effects."
Tragically,
realistic realities reveal that Pakistan is gradually and slowly sinking into
serious financial and political weakness. If Pakistan's officials continue to
ignore early warning signs, as they have in the past, the country might face a
similar crisis as that which is unfolding in Sri Lanka. It is past time for
Pakistan to swallow the painful realities of harsh financial adjustments before
it is too late.
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