When we talk about every penny counts in a broader term, the first thing that comes to mind is the state’s economic conditions and how a country utilizes its resources and ensures socio-economic development. Pakistan is going through a tough time due to the economic crisis. Pakistan is on the verge of default despite the high debts from the UAE, Qatar, China, and IMF loans. It has been struggling with economic issues since its independence, many policies have been made to address the issues and find solutions to them. But the current circumstances have led the country to a condition where it is complicated and left empty-handed. The current political instability has exacerbated the already fragile economy.
The current economic crisis has given rise to multiple questions about the causes of the country`s crippling economy because it is the exploitation of positions, authority, and resources. Corruption is a curse that weakens democracy and hampers economic development. And corruption has been used as a medium in Pakistan to exploit the country’s budget.
Pakistan has been facing governance issues since its inception. Bad governance weakens the state`s institutions and results in economic collapse. According to International Transparency, Pakistan ranks 140/180 in corruption. Bad governance is the main factor behind economic calamity. Those who have failed to administer the system and those who elect or select them are equally responsible for the crisis. One major issue is poor public finances management and unresolved institutional structural issues. Whereas it is the state’s responsibility to ensure the people’s fundamental rights. The current status of Pakistan`s economy stands in a tailspin and even before that it was jeopardized due to the high inflation and devalued currency.
The strident fall of growth layoffs trading and manufacturing parts. Layoffs are not just harmful to the government, but also to the citizens of the country. The year 2022 and 2023 is no lesser than a nightmare for the people of Pakistan because the poor people getting poorer and the rich getting richer. However, middle-class people are on a thin line like a needle that is hanging and is trying not to fall. The start of every new government in Pakistan brings the downfall of the economy of Pakistan. When one government completes the tenure, they loot and plunder, and the new one tries to fill its pockets by begging for another IMF loan. Unfortunately, getting funds and loans in Pakistan is celebrated as a policy success. However, every other sensible administration when they gain a loan utilizes it for the betterment of the state, use it for a greater change, and makes a saving from it.
There has been no effective mechanism of accountability in Pakistan. When we talk about corruption in Pakistan, we think of the National Accountability Bureau (NAB), which focuses mainly on corruption in the country. They play their roles to stop corruption and make the guilty accountable for corruption. The NAB was established in Pakistan in 1999. It has been more than two decades since the establishment of the NAB, but we still witness corruption in Pakistan on a higher note. The failure of the NAB can also be a reason for the increase of corruption and a responsible factor in the country’s weakened economy. The ineffectiveness of the NAB is quite obvious from a recent case that 44 of its officials were found involved in corruption, and financial misappropriation.
We need reliable preventive measures for the elimination of corruption in Pakistan. Inclusivity of upgraded policy where the implementation must be ensured by any means. The government needs to establish a new accountability mechanism in order to monitor corruption. A digital mechanism should be installed in all the governmental as well as private sectors in order to detect and have an eye on fulfilling the commitments and transparency. More importantly, the implementation of this mechanism should be mandatory in every sector whether it is the private or the governmental sector. It is high time that Pakistan implements effective strategies to ensure good governance in the country and strengthen governmental institutions.
The current economic crisis demands a more serious approach. Pakistan must not thoroughly rely on IMF loans and funds. Because IMF is not a permanent remedy for our economic crisis, rather a short-term relief. The recent 11 hours of negotiations have failed with IMF for the loan of $1.1 billion. Every penny given by the IMF doubles the payments for Pakistan and this thing should not go under the table because the people cannot bear the burden of the IMF loan conditions.
The foreign loans have already pushed the country towards deepening economic challenges resulting in a high inflation rate and lowering foreign exchange reserves. The ongoing economic crisis demands bold, and timely economic policy reforms. To make the state more resilient to current economic lapses, the government will need a system that can retain foreign exchange reserves more efficiently. It must also ensure fair generation of revenues and distribution of money. Rebuilding institutional confidence while promoting investments, and transparency in financial commitments are some of the imperatives that may be undertaken for better results. Policymakers need to be vigilant to use the financial potential as well as monitor the obstacles in stabilizing the economy.
[Nattanan Kanchanaprat / Pixabay]
The views and opinions expressed in this article are those of the author.
The author is an Assistant Research Fellow at the Balochistan Think Tank Network (BTTN).