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((PLAYBOOK SLUG: PAKISTAN ECONOMIC CRISIS
HEADLINE: Delay in Reforms Puts Pakistan’s Economy in Crisis
TEASER: Slow to reform, Pakistan’s import-heavy economy struggles with mounting debt repayments as foreign reserves deplete, exports decline and prices of staples rise
PUBLISHED: Monday, 01/30/2023 at
BYLINE: Sarah Zaman
DATELINE: LAHORE
VIDEOGRAPHER:
VIDEO EDITOR: Waqar Ahmed
SCRIPT EDITORS: Salem Solomon,
VIDEO SOURCE (S): VOA original
PLATFORMS (mark with X): WEB __ TV X RADIO __
TRT: 3:21
VID APPROVED BY:
TYPE: TVPKG
EDITOR NOTES:))
((INTRO))
[[Pakistan is facing a severe economic crisis. Prices of staples like food and fuel are skyrocketing. The country must repay billions in external debt, but its foreign reserves are so low it can barely afford to buy a few weeks' worth of imports. As the government tries to revive stalled talks with the International Monetary Fund to unlock much-needed assistance, Sarah Zaman looks at how delaying reforms has brought Pakistan to the brink of economic disaster.]]
((NARRATION))
Ghulam Rasool’s samosa stand in Pakistan’s eastern city of Lahore helps support a household of twelve people.
He has raised prices many times in the last year, but rising inflation keeps eating away at his profits,
((Ghulam Rasool, Samosa Vendor)) (Male, Urdu)
“Customers are not able to afford much. I can’t take care of my expenses at all now. I used to be able to run my house and shop easily.”
((NARRATION))
From spices to cooking oil to fuel, much of what Pakistanis like Rasool use is imported.
With inflation hovering above 24 percent and the rupee losing almost half of its value against the dollar in a year, consumers are feeling the heat.
((Ainee Noman, Consumer)) (Female, Urdu)
“Every time we go to the market, we see new prices.”
((Amara Yahya, Consumer)) (Female, URDU)
“If we were buying meat, let’s say once every 15 days, now we are buying it once a month.
((NARRATION))
Pakistan is in the middle of a deep economic crisis as its debt mounts and income shrinks.
While much of Pakistan’s $23 billion loan repayments due in the fiscal year 2022-23 have been rolled over, the government must pay $3 billion dollars by the end of the fiscal year in June to avoid default. The dollar reserves of the State Bank of Pakistan, however, stand slightly above $4 billion according to data from the country’s central bank.
((Qais Aslam, Economist)) ((Male, English))
“Pakistan has always been in the classical debt trap. We take loans to pay back loans. The only difference is that now we are not investing those loans into some development projects, and we are running a government with that money.”
((NARRATION))
For months, banks in Pakistan have delayed issuing credit to businesses to import goods, raw material and machinery in a bid to save fast depleting foreign reserves.
The textile industry, one of the biggest exporters in Pakistan, has laid off thousands.
((Gohar Ejaz, All Pakistan Textile Mills Association)) (Male, English)
“There is a decrease in demand, plus we have had supply chain issues, which has caused about 18 to 20 percent fall in our exports in last quarter, October to December 22. We are short of raw material. We are short of cotton.”
((NARRATION))
To prevent default, Pakistan is looking at the IMF for help. But, to unlock assistance from a stalled $6 billion loan program agreed in 2019, the fund demands tough reforms, like increasing tax collection and ending energy subsidies, steps successive governments have committed to but avoided for fear of losing votes.
((Sarah Zaman, VOA News))
“To woo the IMF back to the negotiating table and unlock a billion dollars from the 2019 program, the government has now raised fuel prices to an all-time high and stopped artificially controlling the exchange rate …a measure that has sent the rupee tumbling to its lowest value ever against the dollar.”
((Narration))
Ejaz says IMF support may be necessary but it’s not the solution.
((Gohar Ejaz, All Pakistan Textile Mills Association)) (Male, English)
No country can survive on debt. No country should survive on debt. Pakistan has to work on export sustainability and export capacity enhancement.
((NARRATION))
Rasool worries the poor will pay the heaviest price for economic reform.
((Ghulam Rasool, Samosa Vendor)) (Male, Urdu)
“The burden will fall on the poor masses. It won’t make any difference to the government, they’ll take the loan, use it and move on.
((NARRATION))
Satisfying the IMF’s conditions to receive funds might unlock help from others. Friendly countries like China and Saudi Arabia are holding back support to push Pakistan to change how it does business.
Sarah Zaman, VOA News, Islamabad, Pakistan.
((OPTIONAL ON CAM TAG, update if/as needed))
Pakistan's talk with the IMF are expected to begin on January 31.
NewsML Media TopicsArts, Culture, Entertainment and Media
NetworkVOA
Embargo DateJanuary 31, 2023 11:14 EST
BylineSarah Zaman
Brand / Language ServiceUS Agency for Global Media, Voice of America - English
