Economic Recession: IMF delegation visited Pakistan, the whole country came under the grip of economic recession

Pakistan is currently facing financial crisis. To overcome this situation, he is begging all over the world. International Monetary Fund (IMF) officials are here to hold an important discussion as Prime Minister Shehbaz Sharif has held protests for months against tax hikes and demands to cut subsidies by the International Monetary Fund.

In recent times, no friendly country of Pakistan is willing to help it because of the possibility of national bankruptcy. Because of which Islamabad has started coming under pressure. The government lost control of the rupee in the massive black market in US dollars, pushing the currency to a record low. 

Former World Bank economist Abid Hasan said the government will have to bring the political issue to the public to meet these (IMF) demands. If they don't do this, the country will surely default, and we will end up like Sri Lanka, which will be even worse. 

Sri Lanka defaulted on its debt last year and faced months of food and fuel shortages, leading to protests that eventually forced the country's leader to flee abroad and resign.

Nasir Iqbal of the Pakistan Institute of Development Economics warned the government of economic collapse and said that the country's economy was in dire straits due to mismanagement and political turmoil. 

Employment opportunities are less, life in crisis

The delegation of the International Monetary Fund (IMF) will arrive on Tuesday in a country where there is an atmosphere of panic. The IMF is no longer issuing letters of credit. This has led to a backlog of thousands of shipping containers at the Karachi port which are full with stock.

The industry has been hit hard by import blocks and massive rupee devaluation. As a result, public works projects have been halted, garment factories have been partially closed, and domestic investment has slowed. 

In downtown Karachi, dozens of day laborers, including carpenters and painters, wait with their tools for work but are unable to find work. Mason Zafar Iqbal, 55, said the number of beggars has increased and the number of laborers has decreased. Inflation is so high that no one can earn enough.

Pakistan stuck in foreign debt

State bank governor Jameel Ahmed said last month that the country had a debt of $33 billion before the end of the fiscal year in June. A diplomatic action worth $4 billion has been taken by the lending countries, with $8.3 billion still on the negotiating table.

Meanwhile, Pakistan is grappling with energy shortages due to poor infrastructure and mismanagement. Last week, the entire country went into a one-day blackout due to a fault in the national grid, which came after cost-cutting. 

State Petroleum Minister Musadik Malik told reporters in Islamabad that the import of Russian oil would begin in April and would be paid for in the currencies of both countries. The declining economy mirrors the country's political chaos.

Former Prime Minister Imran Khan has put pressure on the ruling coalition in his bid for early elections, while his popularity still remains high. Khan, who came out in a no-confidence motion last year, negotiated a billion-dollar loan package from the IMF in 2019.

But he reneged on promises to cut subsidies and market intervention, which would bring down the cost of living, and put the program on hold. This is a common pattern in Pakistan, where most people live in rural poverty.

Political analyst Michael Kugelman, director of the South Asia Institute at the Wilson Center in Washington, tweeted, "Even if Pakistan avoids default, one of the structural factors driving the current crisis is poor leadership and external global shocks."