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Pakistan’s Economic Crisis comes with Even Greater Risks

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With low foreign exchange and depleted food stocks food prices have begun driving the latest round of crippling inflation. In this context the World Economic Forum’s Global Risks Report 2023 lays out the manifold crises facing Pakistan – a debt crisis, sustained and/or rapid inflation, state collapse and a heightened risk of default.

 

The report warns that the “affordability and availability of basic necessities can stoke social and political instability, which could spiral into much larger stability issues for a country like Pakistan. Particularly chilling is the related warning of “A combination of extreme weather events and constrained supply” leading to “a catastrophic scenario of hunger and distress for millions in import-dependent countries or turn the energy crisis towards a humanitarian crisis in the poorest emerging markets.”

 

Pakistan’s crises need a national consensus but instead of that what we see is greater political infighting and instability. According to an Editorial in Dawn, “Whether held early or on time, general elections alone are not the answer. Our politicians will need each other beyond them as well. They must see reason and lay down some ground rules; that is, unless they would rather shove the country into an inferno than compromise on their individual interests.”

Author: K.M. Rizvi