Economic Collapse: What Can Other Countries Learn From Pakistan's Classic Economic Downfall?
Pakistan's economic crisis is one of the world's most unusual economic collapses. A country that is completely reliant on foreign aid and remittances from Pakistanis working abroad was doomed to fail economically.
Over the course of its history, Pakistan's manufacturing capacity has been demolished by successive governments' flawed, and erroneous policies regarding the economy and also foreign policy because the economy can not survive without sound foreign policy.
Pakistan used to act as a henchman for Western countries in order to control the Soviet Union's communist expansion, and for this Pakistan was rewarded billions of dollars during the reigns of every Pakistani general, with the majority of these rewards coming during the reigns of Zia-ul-Haq and Parvez Musharraf.
Zia was rewarded in dollars for Afghan jihad, and Musharraf was rewarded for the country's assistance during the US army's stay in Afghanistan to control Al-Qaeda and the Taliban.
But, these generals never spend the majority of the funds on the welfare of the country. The majority of the funds are either laundered by generals or politicians for the purpose of expanding their properties in the United Kingdom, Canada, or Australia, or they are spent to promote state-sponsored terrorism groups fighting against India in the name of Kashmir.
The Pakistani government also takes expenses for granted which is why they become spendthrifts and spend billions for bureaucrats' welfare.
Pakistan has also adopted a policy of blackmailing the world in the name of nuclear terrorism and nuclear proliferation, as it is the region's only Muslim-majority country with nuclear weapons after the major powers.
They have digested extended funds from the International Monetary Fund 22 times, but the IMF is not in the mood to extend funds without conditions for the 23rd time. The International Monetary Fund has imposed stringent conditions in order to extend the loan, and if Pakistan fails to comply, the IMF has stated that it will not extend the loan for the 23rd time.
As a result, Pakistan is currently caught between a rock and a hard place. That is why they are knocking on the door of everyone including the Jewish Rothschild family, the religion Pakistan recognized as hostile to Pakistan's state religion because of Palestine.
Therefore, Pakistan is a one-of-a-kind case, and there is a lot to learn or avoid for countries that intend to follow the rules Pakistan devised to nearly destroy their own country.
Lessons To Learn From Pakistan's Economic Condition:
Pakistan's economy is going through history's worst economic crisis. Even now, the Pakistani government and army are providing freebies to their disciples and others only to make themselves happy.
This is one of the Pakistani government's flawed long-term and short-term policies, for which the country is now begging for money from everyone, including individuals. The Pakistani government is now requesting money from non-resident Pakistanis living abroad.
1. First Pakistani government has to take care of its fiscal management.
As previously stated, Pakistanis have a habit of wasting money on frivolous items and pointless foreign trips that serve no purpose for the welfare of the country. The Pakistani government is also providing billions of dollars in subsidies without checking the status of beneficiaries. Every government does take these kinds of publicist measures to attract voters to their flock. Therefore, Fiscal management is the paramount importance to reduce useless expenses from the country's exchequer.
2. Artificially controlled Petrol and diesel prices.
Pakistan artificially controls its energy prices by providing subsidies using the country's forex reserves. This is one of the primary causes of the country's currency depletion. Pakistan has a long history of borrowing crude from Saudi Arabia and the UAE in the name of religion; however, both of these countries have now refused to lend free crude to Pakistan.
Pakistan is like an old habit that will never die because the country has never earned a penny with dignity.
3. Building Infrastructure of no use.
The Pakistani government has never planned before constructing any projects within the country, they always blindly believed in others for their own needs. A good example is China Pakistan Economic Corridor, Pakistan took billions of dollars from China to build Power Plants without proper grid connectivity and those power plants are also not in the right place to provide electricity with greater efficiency.
4. Excessive spending in the defense sector.
Pakistan spends billions on defense, accounting for 75% of the country's budget. The defense budget in Pakistan is large because the country is run by the Pakistani army from behind the curtain. Pakistani democracy is a charade; the country's political system is basically a kleptocracy.
5. Chinese loans.
Pakistan has had a habit of playing both sides. hey play both the United States and China, and they deceive both in the name of regional support and strategic position. China invested billions of dollars in the China-Pakistan Economic Corridor (CPEC), causing Pakistan's bilateral debt to rise to $27 billion, an enormous amount for a country like Pakistan; now, China is demanding repayment without providing debt restructuring relief.
6. Illegitimate move from infrastructure to a service-based economy
Pakistan is obsessed with India's moves, and they intend to imitate everything India does. As a result, the Pakistani government decided to shift from manufacturing, which was still in its infancy, to the service sector. Pakistan attempted to take shortcuts to earn money and failed miserably because they should have cemented their place in manufacturing quickly and then slowly shifted their focus to service. Because there is no use of service in the country if the manufacturing industry does not exist. Manufacturing is the foundation of any country's economy because it solidifies the country's economy.
7. Political chaos.
Although Pakistan is a democracy, the country is actually run by the Pakistani army rather than political leaders. Pakistani political leaders are merely the face of democracy, which is why the Army always destabilizes governments in order to promote the most amenable governments to their own agenda. As a result, the world is still witnessing the brawl between former Pakistani general Qamar Javed Bajwa and former Prime Minister Imran Khan, who was deliberately toppled.
8. State-Sponsored Terrorism.
Pakistan is the only country on the planet that has promoted terrorism as a state policy since its inception and continues to do so today. Pakistan promotes terrorism in the name of Kashmir to harm India, and their sponsored radicalized people travel around the world to promote terrorism. Pakistan is now on its own ball game; the Pakistani army formed Tehreek-e-Taliban Pakistan to cause trouble for India by infiltrating Kashmir, but their plan failed miserably, and the terrorist group is now bleeding Pakistan every day. They recently attacked an Islamabad Mosque and the Karachi police headquarters.
9. Rampart Corruption.
Corruption is a common occurrence in Pakistan. Pakistani politicians, army generals, and bureaucrats are looting Pakistan every day to enrich themselves. They are building mansions and buying islands, and some are doing business in the United States after stealing from the Pakistani state.
Therefore, Pakistan's economic collapse will teach every nation on the planet to learn something and, most of the time, avoid doing things that will harm the country, as previously stated.
There is only one solution for Pakistan; Pakistani political parties must work together to find a common ground to improve the country's economy rather than engage in pointless debate, which is still prevalent even in this economic situation.
Pakistan must first obtain $1 billion from the IMF. Nonetheless, Pakistan's all-weather ally China has approved a $700 million loan, which will be transferred to the central bank this week. These kinds of moves will push Pakistan deeper into an economic crisis.