By Senator Rehman Malik
The world has been invaded by the corona force which crippled the world and is attacking every country without discrimination.
We learned about this force’s attack through the media and China, who was the prime target. In my second article, I had stated that it did not originate in China but the US.
This question still prevails; where did it originate? I am sure that one day its reality will be uncovered and that is why I immediately wrote to Secretary General UN to form a high-powered commission for investigation.
I have written a number of articles on economic analysis but this time I will show that the number of fears I had expressed in my previous articles on international economy have also been confirmed by economists.
The IMF itself has confirmed my prediction by recently stating that “The coronavirus crisis will leave a lasting impact on the global economy and most countries will see their economies being 5 percent smaller than planned even after a quick recovery in 2021.”
Economists are also predicting that this year would be the worst global economic contraction since the Great Depression of 1929/1930s.
If it is a manmade virus, then it is certainly a motivated and well-planned action to further control international resources and push weaker economies to become weaker and if it is natural then it is certainly a curse and the world has to revisit the world’s economy to at least let poor nations of the world survive to start the new life once again.
Our present economic indicators show that the inflation rate is 13 percent, which is too high. Our growth is below 2.2 percent, even though the government is claiming 3.3 by the end of 2020 which is nothing but merely a claim. Such euphoric claims have been made by previous governments as well, and this government should get out of the fudged estimate era.
As indicated above, our empire of the country is built on all types of loans that even our country’s airports/roads or buildings are not spared from being mortgaged to international financial institutions.
Let there be no doubt that we the Pakistanis must know that most of our infrastructure is mortgaged to the world. Hence, we cannot expect that in the present situation created by successive financial scientists, we will be able to pull the country out of this deep mud-ridden problem.
We can clearly see that we are under the heavy load of internal debt of Rs32 trillion from borrowing, and private banks’ businesses are flourishing on interest rate.
We have new a mafia with the name of the “foreign currency mafia” who are too powerful and too close to the decision makers. The country will note that local borrowing will increase by tenfold during and post coronavirus and the government will let it happen and will close its eyes to money laundering. It will also witness massive money laundering in construction sectors. According to the reports, most of the money will fly to the US, UAE and to Europe and this scandal of impunity in massive money laundering will haunt us at various international forums including FATF and it will be used by our enemies worldwide.
I am not criticising anyone; only providing a timely warning to decision makers.
Our external debt is $107 billion and the IMF has already demanded its loan back and is likely to continue to increase its pressure for return of this huge sum they gave us; it has excluded us from the list of corona-affected countries.
Our economy is slipping because of bad management, increase in debts, instability, inflation and irreparable financial damages due to poor governance.
As a student of investigation, I can see the behaviour of economic indicators which are indicating further slide of the economy and also signalling that the rupee will further slip while the dollar will disappear from the market. The currency mafia will bring the dollar out on their own terms and this time they may make more profit by the further increase of Rs10 against a dollar. Also, many in the finance ministry and the State Bank will make hay while the dollar will shine with its mighty power in the hands of the powerful sitting in the corridors of power.
In these worsening situations, all you need is a strong administrator and good managers to control the economy.
During and post the coronavirus economic syndrome, there will be a further major shock to our economy and unfortunately, there is no visible plan to handle it.
Our only hope is the agriculture sector and if no attention is paid to increase yield then it will add to the miseries in the economy. The experts are expecting a very deadly attack of locusts in Punjab and Sindh and partly in KPK. I hope the government will pay attention to this. Mr Farhan Bukhari has painted the picture of real fear in the agriculture sector and its impacts.
The stock market is also consistently under pressure and it is dropping in value because of general economic distress and a few playing it from Karachi who are never punished for their frauds and loss of public money under the cover of big names. There has been a significant decline in foreign exchange reserves and more than 7 percent depreciation in the value of the Rupee.
Our medium-scale businesses are cursed with a high rate of interest and fears created by investigative agencies. It looks like the small business community will be shutting down or will go for bankruptcy.
Consumption will reduce and more money will be drawn out of the companies account, some will be able to survive but the smallest companies will be eliminated in the coming months.
Let us examine if our economy will survive from national bankruptcy or not, due to this continued sliding and a lot of unfortunate deadweight under various internal and external pressures. As a nation, we hope to survive from international bankruptcy but the mid-business community will not be able to survive from it because of a sudden stoppage of industrial and production activities.
Unfortunately, the wheels which generate the economic activities and abilities have now come to a standstill due to COVID-19 and this pandemic has shut transport, from the train service to the aviation service; tourism has also gone down to zero in the country with shutting the airlines.
The countries with the technocratic authoritarian model as China, Japan, Singapore and to some extent South Korea are dealing more effectively with the virus than democratic ones in the West and South Asia. These countries have efficiently tackled the elements of disinformation in society to stop the spread of chaos and panic. While on the other hand, people in democratic societies who care about freedom, privacy, and individual rights, are much worried about their freedom after COVID-19 is over.
The situation of the pandemic predicts that the Gross Domestic Product (GDP) of the United States and China will decline by 2.4 percent, Japan by 2.7, Germany by 3.6 and the Russian economy will decline by 4.8%. In April 2020, almost every G20 member state made an attempt to minimise the coronavirus pandemic effects for their respective nations.
Do we see a positive economic prediction post-corona for Pakistan? No. whereas other countries are continuously working on their projected economic figures.
We are likely to undergo heavy losses and our survival will only be possible if we get relief from IMF for at least 10 years and if China shares half the burden to help us work out a formula to generate more income from CPEC.
It is to be noted that a high global recession will directly hit us.
Opinions expressed are solely my own and not necessarily reflect the views or opinions of my party.
(The writer is a PPP Senator, former Interior Minister of Pakistan, and Chairman of think tank “Global Eye” and Senate Standing Committee on Interior. He can be reached at: email@example.com, Twitter @Senrehmanmalik)