PAKISTAN FACING SEVERE POLITICAL CRISIS IN APRIL 2023

 By marana

Now a days the Pakistan Democratic Movement (PDM) coalition government of around eleven political parties is in power until August 2023. Imran Khan was ousted from power in April 2022 after losing a no-confidence vote, becoming the first Pakistani Prime Minister to be elected . issued by the National Assembly. Since his ouster, he has been calling for snap polls in the country to remove what he called an "imported government" led by Prime Minister Shehbaz Sharif. Meanwhile, a Pakistani court granted Imran Khan interim bail in seven cases.

The current crisis stemmed from Imran Khan's decision to dissolve the provincial assemblies of Punjab and Khyber-Pakhtunkhwa in January 2023. PTI was in power in both provinces. According to the constitution, elections were supposed to be held in 90 days, but the federal government was reluctant to hold them. As expected, the PDM ruling coalition did not succumb to PTI pressure. Imran Khan led the rally in an unsuccessful attempt to get Sharif to agree to early elections, which are scheduled for later in 2023. Khan has been holding protest rallies across the country to demand early elections, but his successor as prime minister, Shehbaz Sharif, has rejected Khan's demands . Since then, Pakistan has been falling into polarization and one crisis after another. Pakistan faces constitutional crisis over Imran's desire for early elections: The blame game continues as expected.

The federal government opposes early elections. He says elections should be held on the same day the incumbent government completes its constitutional term. The ruling party says that holding elections separately would increase the political crisis. However, both sides admit that the stalemate has led to political instability and a worsening of the economic situation.

The political conflict may lead to a decisive police operation against the Tehreek-e-Insaf (PTI), which may lead to further violence. The PDM government is somehow trying to reduce the great popularity of the PTI party. In March, the oversight committee suo motu pointed out the delay and ordered the Election Commission of Pakistan (ECP) to hold elections in Punjab and K-Initially, the date for the Punjab elections was set on April 30, but the ECP postponed it to October 8. However, this only deepened the crisis , because the parliament refused to bear the costs of the election.

The ruling coalition also took the position that the court's decision would not stand as four of the seven-member panel rejected the suo motu notice. Now the matter is back at the Supreme Court, where a three-judge panel has called for political dialogue to resolve the issue. The Supreme Court then again granted the PTI's plea against postponing the elections and directed the ECP, the election watchdog, to hold the elections on May 14 in any case.

The Supreme Court ruled that its judgment given in the election postponement petition has already fixed the date of Punjab Assembly elections on 14 May 2023. “This judgment stands and therefore its decision is binding on all the judiciary and executive in the country under Article 189 and Article 190 of the Constitution," the order stated. Currently, both the executive and the judiciary have reached an impasse due to the government's difficulty in implementing the Supreme Court verdict ordering the May 14 Punjab Assembly elections.

In its April 4 order, the Supreme Court directed the government to provide Rs 21 billion to the ECP to conduct elections in Punjab and Khyber Pakhtunkhwa by April 10 and directed the ECP to submit a report to the court on whether the government followed Order 11. April. However, the government referred the matter to the parliament, which defied the orders of the ÚS and refused to release the funds.

pakistan political crisis

The court then issued notices to the Finance Secretary, Governor SBP, Attorney General for Pakistan (AGP) and the ECP, directing them to appear before the bench on April 14. It also directed the SBP to provide a record and details of all federal government money under or under the control, management or direction of the bank. After hearings in chambers, the court issued an order directing the SBP to release Rs 21 billion from the FCF for the elections.[5]

The court also saw that the required funds could be made available to the Election Commission of Pakistan (ECP) "immediately and within a day". It also noted that there were "absolutely no difficulties or hiccups, whether financial or procedural or in terms of the relevant authorization by and under the Constitution" in the immediate release of the funds in question.[6] Later, on 19 April 2023, while hearing a petition for holding general elections to national and provincial assemblies simultaneously across the country, the Chief Justice of Pakistan (CJP) asked political leaders to negotiate to end the impasse.

The PDM government and the extremely powerful army do not want the election on the appointed day at all. So the election deadline can be extended to make elections possible. Otherwise, it may not even be May 14. Today, the Supreme Court also summoned the leaders or representatives of all political parties. There is still room for some political compromise. Due to the immense power of the military, it must also be involved behind the scenes in a major compromise. The focus must be on peaceful, fair and just elections. Meanwhile, time is running out for Pakistan's ruling elite. Only external intervention can now solve the country's significant crisis. The court called elections in Punjab for May 14 after declaring the postponement of the vote unconstitutional and rejecting the defense ministry's request that elections be held simultaneously across the country at a later date instead, amid worsening security and economic conditions.

pakistan economic crisis 2023

Today, Pakistan is at a historic crossroads like never before in history. Pakistan is facing a serious political crisis. Only court verdicts calmed the volatile situation. Regardless of the apparent inclination of Pakistan's PDM government not to hold elections as per the Supreme Court verdict, people are demanding them in accordance with the law. Attempts to crush opposition forces no longer make sense. Is Pakistan falling into direct military rule? National institutions are fighting over the issue of regional elections and the powers of the President of the Supreme Court. The legal fraternity of Pakistan expressed its full support to the Constitution and the Supreme Court of Pakistan and demanded that the elections to the Punjab and KP Assemblies be held immediately, in accordance with the dictates of the Constitution and the orders of the Supreme Court. The Welcome development legal initiative is also supported by a number of human rights groups. However, the PDM government and the military think otherwise. High tension in Pakistan

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UAE confirms gift of $1 billion bilateral support to Pakistan to IMF:

 by web desk

UAE confirms gift of $1 billion bilateral support to Pakistan to IMF:

The finance minister says that Pakistan is now dealing with the necessary documentation to take over the advance from the UAE authorities Finance Minister Ishaq Dar announced on Friday that the United Arab Emirates (UAE) has confirmed $1 billion in bilateral support to Pakistan to the International Monetary Fund (IMF), the final condition for finalizing staff-level agreements with the IMF.

The finance czar said on his official Twitter account that the State Bank of Pakistan is now "engaged with the necessary documentation to take over the said advance from the UAE authorities".

Meeting of the IMF term and conditions

At an earlier meeting, Pakistan had strongly urged the IMF to show some flexibility and sign a staff-level agreement, but failed to agree a date despite Islamabad's growing fears of the fallout from a worsening economic crisis.

The request was made by Finance Minister Ishaq Dar in a virtual meeting with Jihad Azour, director of the IMF's Middle East and Central Asia Department. However, the minister could not achieve the desired result, as the IMF again raised the issue of gasoline subsidies and possible fiscal leakages due to the implementation of the subsidy plan.

UAE confirms gift of $1 billion bilateral support to Pakistan to IMF:

The two sides shared their positions on external funding requirements of $6 billion – the amount Pakistan needed between now and June to avoid default.

The IMF was informed that Saudi Arabia had confirmed a $2 billion loan to Pakistan and Dar assured that the UAE would soon confirm its commitment to provide $1 billion.

$6 billion funding plan remains elusive

The two sides also discussed the progress made in the IMF programme, particularly the talks held with the IMF mission during its visit to Pakistan, and the implementation of previous measures, a press statement issued by the finance ministry said.

During the first eight months of this fiscal year, the current account deficit remained at $3.9 billion. Dar assured the IMF that Pakistan would secure an additional $2 billion loan from the World Bank, Asian Infrastructure Investment Bank and commercial banks if the fund signs a staff-level agreement.

UAE confirms gift of $1 billion bilateral support to Pakistan to IMF:

Pakistan Economic Problems and their Solutions.

 by m.a.sohail

Pakistan is a country where more than half of the population lives below the poverty line. Pakistan's economy is facing adverse situation due to many reasons. There are reasons for the decline

1- Inflation in Pakistan

Inflation peaked at 20% in 2009 and has now fallen to just below 7% at the end of 2012. However, many expect inflation to rise above 10% again due to cost factors.

Causes of inflation in Pakistan include:

    a. Rising energy prices.

    b. Rising food prices. Agriculture is one of the mainstays of Pakistan's economy with 45% of the workforce employed in agriculture. However, the country is facing food shortages, which is pushing up food prices.

    c. There are concerns that even the financing of the budget deficit could create inflationary pressures.

Weak growth in food productivity means that production in Pakistan is growing more slowly than in other countries. The consequence of this is that food prices rise faster than production, leaving people in food poverty. Rising food prices are a real problem for poorer households who do not have the rising incomes to cover higher costs. A recent survey suggests that 50% of households are “food insecure”.

In the short term, inflation could be dealt with by demand-side policies – deflationary fiscal policy and higher interest rates. However, this would damage Pakistan's fragile economic growth. With a growing population, there is a need to increase economic growth rather than cause a recession.

Supply constraints and cost-increasing factors – rather than excess demand – appear to be the root cause of Pakistan's inflation. In the long term, it is necessary to try to reduce these bottlenecks and increase the productivity of agriculture and industry.

2-Tax deficit and budget deficit

Pakistan has some of the lowest tax revenue as a % of GDP in the world. Pakistan's tax revenue is just 9.1% of GDP in 2011. Tax evasion and avoidance is widespread and even leading politicians do not file tax returns. With limited tax revenues, the government tried to prevent the budget deficit from growing. The budget deficit in 2011 reached 8% of GDP. (The Economist on Pakistan's Economy) Although total debt to GDP is only close to 60%, Pakistan is struggling to finance its debt domestically – hence the rapid growth in external debt. The increased deficit and external debt increased the cost of debt interest payments – and thus a larger share of limited tax revenue.

There is a lot of room to increase tax revenue and plug the budget hole, but successive governments have tried to take over the vested interests of society.

3 supply-side constraints

With tax revenue of just 9% of GDP, Pakistan has very limited resources to spend on infrastructure, healthcare and education. The main areas of government spending are on the military, interest payments and energy subsidies. The government pays only 0.5% of GDP for healthcare, which is very little by international standards. Supply constraints in energy, transport and education led to stagnation in productivity growth. This creates both cost and inflationary pressures and limits the rate of economic growth. In particular, the IMF states: “A key structural impediment to growth is the problems in the energy sector, which have led to widespread and unpredictable power outages.

4- Overpopulation,

If we look at overpopulation, then we find that we have a bunch of people with few resources. A few years earlier the population was very huge. The government has given some attention to the problem and now the population is under control. over population has many disadvantages like low literacy, lack of employment, no better facilities for food and shelter and unfavorable health facilities.

5- terrorism,

Pakistan is facing the worst situation of terrorism. Because of this war on terror, we have seen constant bloodshed and refugees in poor condition. The problem is the presence of millions of people without homes, food and health. In addition, global investors are not investing in this uncertain country. Pakistan was a world market for investors and economists like India. But now businessmen cannot invest in this country due to constant terrorist activities. Especially in the northern and Sindhi areas, there is a law and order condition in the state. There are kidnappings, bank robberies and bomb blasts.

6- Bad governance

Poor governance is still a major problem in the state. Our leaders have bank accounts in foreign countries. They invested in other countries. They own companies and have stakes in such highly developed nations. That is the kind of insincerity towards the nation. Moreover, our political representatives have an unbalanced approach to the state. Few regions are highly developed with all facilities while few regions are very neglected. This creates anarchy and impatience in the state. Our leaders must be patriots for the whole country. There is still a need for pure democracy in the state.

7- Low literacy rate

More women need to be empowered to get the best economy. Women are more than men. Only 1 person supports the whole family. Some are children, some are seniors, some are ladies, then who is to earn. 1 person cannot support the whole family. So there must be participation of young ladies in the flow of the state. So that this country can have more manpower and creative minds. When we teach a man, he can learn by himself, but when we teach a woman, she prepares the whole family. That's the difference.

Conclusion

It's not all bad news. Inflation has fallen a bit, economic growth is positive. Pakistan has a young population which should be an asset. The country has great potential that is not being realized. The first step would seem to be to increase tax revenues, reduce the budget deficit and solve the cultural problem of not paying taxes. This will allow more investment in supply-side improvements, which would be the beginning of improvements in supply-side factors.