Economic Instability, How to Overcome It!


Malik Shafqat Ullah
Pakistan, like the rest of the world, has been badly affected by the COVID-19 in economic, social, and health matters. The big economies are collapsing. People are spending their savings to increase resources and income. Such situations drive nations to inflation because, despite the expansion of businesses, the purchasing power of the people has not yet been strengthened. Small business owners who used to expand their business to generate resources are now declining further. If you look at the economic devastation caused by pandemics in these two years, it is clear that the whole world is in a state of instability. According to the September 28 Washington Times, the petrol crisis in London and the United Kingdom has escalated to the point where troops have to be called in to control the situation. According to an IMF report, Pakistan’s economic future is at a crossroads. The huge deficit of the past, the high value of the rupee, and the lack of reforms have stifled economic growth. Due to significant government borrowing, repayment of loans has become almost impossible. Meanwhile, less than 1% of people pay taxes. This leaves limited resources for public education, health, and infrastructure. In 2019, Pakistan formulated a bold three-year program for economic stability. According to which the correct value of the rupee should be allowed to be established through the market, which would restore competition and help increase exports. To reduce debts, people should be required to pay taxes so that repayment of loans can be facilitated. Remember that when this reform was introduced, the number of taxpayers in Pakistan was less than one percent. And this fiscal year, according to a list of taxpayers released by the Federal Board of Revenue, the number of taxpayers has dropped to less than 2.2 million. Overall, the decline is already reported by 30 percent of taxpayers. According to economists, the government has made several amendments to the law to ensure the payment of taxes, including stricter penalties. These spheres of the amendment are derived from effective laws to increase tax rates in various developing countries. The government also introduced reforms to ensure the safety of the poor by increasing spending on education and health. Emphasis was placed on accelerating reforms to strengthen and consolidate departments to facilitate investment and promote companies and create jobs. To implement these reforms, the IMF provided 6 billion, which would allow partners to access up to 38 billion. This gave Pakistan full support for growth in economic development. According to another IMF report, the world situation is worse than previously thought. The economic crisis in a pandemic is even more devastating than the severe recession of the last century. The situation in Pakistan is that before Covid-19 and Lockdown, the estimated fiscal deficit was at 7.6%, but now it could rise to 9%. In addition to revenues, remittances have also declined. No country alone can cope with the economic crisis caused by this global epidemic. This can only be countered by global cooperation. To deal with the economic situation in the pandemic, our government in particular and the people, in general, need to redefine their priorities and priorities with the fact that there is less room for comfort and convenience besides luxuries. The whole nation has to be part of practical measures to face the difficult economic situation. The government has no choice but to take tough economic decisions. He is more than a chessboard of methods and effects; in which case it is futile to expect further concessions and mitigation measures from the government ? According to the statistics department, the government has increased petroleum products eight times only in the current financial year. Opposition parties have stated they will not run in the by-elections. Opposition political parties questioning Imran Khan about investments coming from overseas Pakistanis, other economic deals, including oil refineries from Saudi Arabia, and pre-government agreements. Petrol prices have been doubled in September this year alone. And now the new price of petrol has reached one hundred and twenty-eight rupees. The government’s position is that the price of oil in the world markets has increased to 25Dollars in just one year, instead of government has increased the price of oil in Pakistan very little. Last year, the price of oil in the world market was 44 dollars, while in March this year, the price of oil has reached 74 dollars and this month it has reached 79 dollars. According to government figures, the government has the power to levy a 17 percent tax on petrol from the people, but on the contrary, the government is collecting only 7.5 percent from the people. World oil prices have risen by 85 percent. The price of petrol in Pakistan has been increased by only 20%. If we consider the economies of other developed countries of the world and consider the United Kingdom, for example, due to the increase in coal prices, there are currently eight lakh households where the power supply has been suspended. Electricity generating companies have cut off power supply due to rising electricity prices. If we look at other countries in Asia, In India, the largest market in Asia, has laid off more than 15 million young people. Many international companies have rolled up their sleeves, and the number of families below the poverty line has risen from thousands to millions. Recently, the government has formulated new policies to control inflation, under which the government wants to control inflation in just one month. This will be the first time that salaries and pensions have been increased in the same financial year. It must be admitted that the government is making great sacrifices for the people of Pakistan, but the ground realities are against the government. According to the Statistics Department, the inflation rate in Pakistan in September alone was eight to nine percent. In addition, purchasing power is declining.-People have also spent their savings to stabilize the business. Due to the suspension of air traffic and the reduction in employment, a significant amount of money is not coming to Pakistan from Pakistanis abroad. Pakistan’s persistence in the gray list due to repeated reports by the Asian Pacific Group against Pakistan’s economic policies is proving to be extremely detrimental to the Pakistani economy. The economic terrorists responsible for the economic instability in Pakistan and also corrupt elements who are still present in the houses of Pakistan and their gods who have fled abroad under the pretext of diseases. These politicians who are propagandizing on the government and those government officials who are pretending to be concerned about the situation in the country, while they are well aware that Pakistan is moving from economic instability to inflation, why don’t you offer your assets in the service of the country and the nation? And catch the big tax evaders who have not been paying taxes for years. Most of them are businessmen sitting in the houses who have become pharaohs in their own right. In my opinion, Unless the money looted from the economic terrorists who have been held accountable and the nation knows that these thieves are their culprits is deposited in the government coffers, to think that it is possible to get rid of the thieves and looters by robbing the people. So, this is utter injustice. Prime Minister Imran Khan should remember that governments that cannot establish justice are always destined to be humiliated.