Last year, more than 800,000 Pakistanis left the country in search of better economic prospects abroad. With rocketing inflation and the rupee devaluing by 30% during 2022, millions of urban middle-class people have been pushed to the brink of poverty. Cataclysmic floods have ravaged the rural poor. With only enough foreign reserves to pay for less than a month of imports, the state is on its knees.
Pakistan has always spent far more on imports than it has earned in exports. It is a big exporter of labour but the remittances Pakistanis working abroad send home are frittered away on consumption. They are not invested in industry. Though it is a cotton-producing country, the textile sector remains underdeveloped. Promising IT activity has not blossomed into a tech boom, unlike in neighbouring India. With a third of its 230 million-strong population under the age of 14, Pakistan has one of the highest rates of population growth in the world, and job creation cannot keep pace.
Successive governments have provided lavish and unfunded fuel, water and power subsidies but have not invested in quality education, health provision, alternative energy or even a strategy for population control. The tax base is among the lowest in the world. An added drain on the country’s strained resources is the world’s sixth largest military. Spanning everything from golf courses to banks, it owns the country’s biggest industrial conglomerate. A massive defence expenditure and the generals’ eye-watering perks appropriate a sizeable chunk of the budget….