New Delhi, March 20 Economic fragility in Pakistan has reached a critical stage following the US–Israel war with Iran due to the drastic escalation in oil prices and the surge in the trade gap, a Pakistani media report said.
In terms of per capita income, economic growth rate, dwindling exports and low foreign exchange reserves, Pakistan is in dire straits, according to an article in the Lahore-based Friday Times.
Pakistan’s economic fragility is reflected in its GDP growth rate, which is merely 3.1 per cent, its human development index (HDI) rank which is 168 on a list of 193 countries, per capita income of $1,812, a poverty rate of 28.9 per cent, an adult literacy rate of 60 per cent, 25.2 million out-of-school children, and an unemployment rate for ages 15–24 of 12.8 per cent, the article stated.
These figures are the lowest in South Asia and correspond to the failure of governing elites to mitigate economic fragility. Pakistan’s trade gap is more than $10 billion, with diminishing exports and unimpressive foreign exchange reserves, with the State Bank holding only $16.5 billion, it noted.
Following the war in the Persian Gulf and West Asia, its implications for Pakistan’s economy are severe. The sharp increase of Rs 55 per litre in the price of oil and a 20 per cent increase in the price of gas will lead to an escalation in inflation and the prices of essential commodities.
The rise in the cost of electricity and transportation will augment the plight of 250 million people in Pakistan.
When a country is economically fragile and, in almost 80 years of its existence, is unable to enhance the level of economic and social development, it means it has failed to ameliorate the quality of life of its people. This includes providing access to clean and safe drinking water, better housing, and improved educational and health facilities, the article observed.
The bulk of the federal budget is used either to pay for external debt or to meet defence expenditures. Hardly 20 per cent of the amount is left to run the country’s administration and provide a share to provinces under the 18th Amendment. There is no money left to meet developmental expenditures, which results in excessive internal and external borrowing, it warned.
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