Stop the fall of the rupee

0
24

By Senator Rehman Malik

Money, whether it is in any currency, is probably the most desired commodity which regardless of class, age or ethnicity is loved by every person. In our society, money is the basic need to regulate our lives as it is the symbol of our economy. It has also bifurcated classes within our society. It sets our way of life and passes through the hands of each one of us. We love it at all levels but as a nation, we could not protect its value. It is something that determines the strength of our economy as it has tremendous effects on our society. It also has the ability to corrupt people when it is in the hands of mafias.

There is a popular phrase of ‘installing the wheels to the file’ as a businessman adds wheels of rupees to his files to move fast and in his favour. A poor man earns and uses it to feed his family every day, a middle-class man works day and night to provide a good lifestyle to his family and also tries to save some for later use while the corrupt mafia which includes businessmen and politicians violate the process of rupees by containing it in a few hands. The rupee had strength but its value is decreasing by the day and it is depleting with every passing day.

Pak rupees

When I joined the civil service in 1974, one dollar was equivalent to Rs3 only while now it has touched the skies as it is equal to Rs167 and see how inflation has hit us in the last four decades. It is a sad affair that our governments could not protect this most precious commodity. I had started to feel and assess in 2014 that we are not properly handling our most treasured item and the government, the foreign exchange mafia, and some bank syndicates and individuals mint their money by depleting rupees with different artificial and corrupt techniques. I had also given successive statements on the ever-rising value of the dollar and depletion of the rupee, as in 2018 one dollar was Rs121, in 2019 it was Rs150, in 2020 it reached Rs166 and is now Rs168.5 against one US dollar.

In my articles, I had predicted the sharp decline of the Pakistani rupee with reasons as to why the rupee depleted in the past as I was noticing the continued fall of the growth rate, falling export figures, increase in the import figures, high in flexing figures including the pressure of the IMF, the World Bank, and other donors to devalue rupee as a condition to have further borrowing to be allowed to Pakistan.

This period from 2018 onwards has drastically devalued the rupee against the dollar to the level of 168 which was highly unimaginable. There are certainly alien factors damaging the sustainability of the rupee but there are certainly other factors within our country where very strong syndicates and mafias play with the interest of the nation by using a well-organised criminal underhand methodology to reduce the value of the rupee by using certain technical techniques which were explained in my article ‘Plight of Pakistani Rupee’ published in the same newspaper on December 17, 2018, in which I had mentioned about the consecutive three-time steep decline in the value of the rupee ever since the new government took over. The slide of the Rupee overnight shook the people and they were shocked to hear that even the Prime Minister, the President, and the Finance Minister were claiming that they were not aware of this decline.

Pak currency

The rupee will further deplete above 170 against 1 US dollar; the nation needs to know about this unchecked downward slide which can create multiple complications not only for the overall economy of the country but it will affect our institutions and the common man badly. Traders may like to see the currency strength in South Asia, even the Bangladesh Taka is better than us.

A few suggestions to strengthen the rupee are listed under:

Pakistan needs to work out a way forward for the retirement of its foreign debt. It must enhance the growth rate by using all available resources, and pump funds in the agriculture sector to enhance the yield. It must also try to have an agreement with China to purchase half of the debt with a 20-year relief in the interest rate and payments. A full review should be undertaken into state investments, the issuance of various bonds, available properties, and loss of the exchequer due to unwise actions and bad investments. Imports should cut drastically and boost exports as the country cannot stay only on the foreign remittance by overseas Pakistanis. We must bring in legislation for the protection of foreign investment and special incentives and protection to the overseas Pakistanis.

I am sorry for placing this bad picture of the rupee and the economy but I think some drastic steps are required to halt the depletion of the rupee.

Most importantly, the fragile economy of Pakistan will get some more burden due to the newly formed setup in Afghanistan. There is a likelihood of a drain in our resources to Afghanistan and the rupee is likely to go under more pressure. In my article ‘A strong emerging bloc’ dated August 1, 2021, I had suggested the economic bloc of China, Pakistan, and Afghanistan. It is a good omen that the new leadership of Afghanistan has shown an interest to be part of CPEC. Our priority should be to enhance our economy which is the future of our country. I hope Mr Shaukat Tarin will try to work on some out-of-the-box solutions to put the country back to track.

The views expressed are solely mine and do not necessarily represent the views 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: rmalik1212@gmail.com, Twitter @Senrehmanmalik)