Economic fragility in Pakistan reached a critical stage following the US–Israel attack on Iran on 28 February. It is not only the drastic escalation in oil prices but also the surge in the trade gap which tends to enhance the fragility of Pakistan’s economy. In terms of per capita income, economic growth rate, dwindling exports and low foreign exchange reserves, Pakistan is in dire straits.

According to the details, Pakistan’s economic fragility is reflected in its GDP growth rate, which is merely 3.1%, its HDI rank (out of 193), which is 168, per capita income of 1,812 US dollars, a poverty rate of 28.9%, an adult literacy rate of 60%, 25.2 million out-of-school children, and an unemployment rate for ages 15–24 of 12.8%.

These figures are the lowest in South Asia and correspond to the failure of governing elites to mitigate economic fragility. As mentioned earlier, Pakistan’s trade gap is more than 10 billion dollars, with diminishing exports and unimpressive foreign exchange reserves, with the State Bank holding only 16.5 billion dollars.

Following the war in the Persian Gulf and West Asia, its implications for Pakistan’s economy are severe. The sharp increase of Rs. 55 per litre in the price of oil and a 20% increase in the price of gas will lead to an escalation in inflation and the prices of essential commodities.

The rise in the cost of electricity and transportation will augment the plight of 250 million people in Pakistan.

When a country is economically fragile and, in almost 80 years of its existence, is unable to enhance the level of economic and social development, it means it has failed to ameliorate the quality of life of its people.

This includes providing access to clean and safe drinking water, better housing, and improved educational and health facilities. The bulk of the federal budget is used either to pay for external debt or to........

© The Friday Times