Exploring the Economic and Political Hurdles Faced by Pakistan

Pakistan is currently facing myriad economic and political challenges, such as high inflation levels, a large trade deficit, and a struggling currency which has led to a decrease in purchasing power for the majority of its citizens. The country has been grappling with political instability, security threats from extremist groups, and other secessionist security challenges that have adversely impacted its ability to attract foreign investment and tourism. Due to these challenges, Pakistan’s downfall continues, and there seems to be no abyss it will not touch. It is a classic case of a missed opportunity, as it could have been a beacon of socio-economic progress and human development, but it, unfortunately, didn’t see this through to bring this into reality.

Pakistan’s current economic challenges are putting heavy strain on the country and disrupting the daily lives of its citizens. High inflation levels have reduced purchasing power of the people and made it harder for businesses to increase their margins and competitiveness to succeed. A large trade deficit and its down-sliding currency, the Pakistani Rupee, are among the significant challenges.

Moreover, the Current Account Deficit (CAD) has long been a problematic cup of tea for Pakistan. Since the early years of the state formation, its economy has reeled under higher CAD rates, which have hovered around the rates significant of the crisis. The BOP crisis in Pakistan has depleted its foreign reserves, forcing it to navigate from crisis to crisis with knee-jerk corrective measures, ignoring the long-term picture to undertake reforms in a phased manner. According to the State Bank of Pakistan (SBP) Balance of Payments (BOP) schedule, the country had a Current Account deficit of $17.41 billion for the fiscal year 2021-22. The imbalance has risen thanks to rising energy imports and sub-par industrial & service exports.


The country’s Government has sought financial assistance from friendly countries and is taking measures to increase exports and implement austerity measures, but to no avail. The kind of crisis that Pakistan is presently reeling under is unprecedented. The Foreign Currency reserves of Pakistan currently stand at $3.68 billion, an amount that is barely enough to cover about three weeks of imports only. Recent IMF guidelines have brought the Pakistani economy to its knees. The Government has been forced into action and has tried to appease IMF by levying 100 Billion Pakistani Rupees in Taxes and another 100 Billion Pakistani Rupees in Flood levy on imports.

The Government has its hands tied and has had to raise the prices of essential items to showcase its commitment to long-term corrective measures. This is being done in order for them to present due commitment to reforming their legal & tax framework to become eligible for any provision of aid in this crisis. But these challenges are ongoing and require a long-term economic growth and development strategy.

To add to the turmoil, Pakistan’s long history of military coups and political instability, caused due to weak democratic traditions and undue influence of the Pakistani military over day to day functioning, concerns movers and shakers of the world. They think that the constant instability in the ruling dispensation at the helm of affairs has the potential to make Pakistan a hotspot for concerning safety and security outside the limits of its geography. The country is also facing ongoing conflict with secessionist and extremist groups, which jeopardizes its stability to command enough confidence to attract foreign investment and tourism. These challenges have made it difficult for the Government to establish a stable democratic government and implement long-term corrective policies and action plans.

This dire situation is even direr considering the fact that instability and economic crisis has had an extremely dysgenic impact on the population at large and created a vast socio-economic deprivation in the society. Lack of literacy and basic amenities have led to poor human development outcomes, which have remained lack luster and stagnant, with high levels of stunting at 38 percent and learning poverty at 75 percent. This crisis, in any case, cannot be corrected in a once-in-a-while measure but instead needs surgical precision in recognizing the mistakes of the past and having a comprehensive level of societal discourse to transform the situation from the benchmark at which things presently stand.

In the end, the situation in Pakistan is complex and multifaceted, and the Government and its society must work together in tandem to address the challenges and develop a long-term strategy for economic growth and development. While there may be a struggle and inertia against concrete change in the short term, the sacrifices made, compromises reached, and reforms undertaken to rise to the occasion is sure to yield positive results in the future.

For Hindi Readers:- पाकिस्तान द्वारा सामना की गई आर्थिक और राजनीतिक बाधाएं

Andrew s

Andrew has been in the online publishing industry. After receiving his degree in professional journalism from the Indian Institute of Journalism and New Media, he contributed to multiple websites as a freelance writer and feature editor. Mostly, Andrew tackles controversies and theories that lead to a specific conclusion that either debunk or justify a particular claim. Further, Andrew participates in social developments that aim to simplify every individual's way of life and fight for peace. He is the new Editor-in-Chief of Pressroom Today.

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