Can Pak’s Economic Crisis Lead To Its Balkanisation?

Can Pak’s Economic Crisis Lead To Its Balkanisation?

Bordering India, Afghanistan, Iran and China – Pakistan is comprised of four provinces – Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan.

Pakistan also has a federal territory, the Islamabad Capital Territory and two occupied regions – Pakistan-occupied Kashmir (PoK) and Gilgit Baltistan, both parts of the erstwhile princely state of Jammu and Kashmir which had become part of India in 1947 and are now illegally occupied by Pakistan.
All these provinces and territories of Pakistan have diverse cultures, languages and ethnicities. Unfortunately, Pakistan has failed to keep them united.

The Punjabis, who are arguably the most prosperous of Pakistan’s ethnic groups, hold all major posts within the government, the army and the judiciary. They have been lucky to avoid many of the crises plaguing the rest of the country. These crises, which continue to persist, have fuelled sectarian and separatist violence.

Pakistanis have largely lost faith in the coalition government headed by Prime Minister Shehbaz Sharif, having failed to carry out any of the much-needed economic reforms in the country.

Naveed Baseer, Expert on Pakistan says, “People are not happy with the Pakistan government or Pakistan system or whatever the army is doing, whatever the judiciary is doing. They are totally not happy and they are looking for such movements that can come up and lead them.”

The Baloch are living as minority on their own land and continue to face persecution at the hands of the Pakistan Army and spy agency, the ISI.

With Pakistan’s financial crisis owing to rising debt and dwindling foreign exchange, the Baloch’s situation has become even more dire.

The separatist movement in Balochistan has intensified and opposition against Pakistan and its ally, China, has risen.

Today, several pro-independence organisations like Jeay Sindh Qaumi Mahaz (JSQM), World Sindhi Congress, and Jeay Sindh Freedom Movement have gained a wider support base within Sindh and international platforms.

The Sindhis, who can trace their roots to the ancient Indus Valley civilization, have realized that by remaining integrated with Pakistan, their future will be uncertain and under threat and thus voices for a separate state have gathered steam.

Facing discrimination, extreme poverty, and loss of their Sindhi culture and language, the people in this part of Pakistan are determined to fight for their right for freedom.

“The historical nations particularly Sindhis, Balochs and Pashtuns are thinking that the only way is the emancipation of these historical nations” says Lakhu Luhana, leader of the World Sindhi Congress.

The Pashtuns, like the rest of disenchanted Pakistan citizens, have lost faith in the government, in particular with the ever-worsening economic situation.

Pakistan-occupied Kashmir (PoK) and Gilgit Baltistan, which have been under Pakistan’s forceful occupation since 1947, are also experiencing mass resistance to the Pakistani government. Cripplingly high inflation, food and medicine shortages, unemployment, and increasing distrust in the government are the key drivers behind the recent massive anti-Pakistan protests.

Pakistan has long exploited PoK and Gilgit Baltistan for their resources and has used the territories as breeding grounds for terrorism and has exploited their natural resources. This region is also used as a launchpad to push terrorists into India.

The continuing turmoil on both the political and economic fronts in Pakistan has led to widespread rebellion within the country. This risk seems imminent as the Pakistani rupee continues to sink to new lows against the dollar and every day is a struggle for survival for the large majority of the Pakistani population. (ANI)

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A general view of a residential area is seen during a power breakdown in Karachi, Pakistan, January 10, 2021. REUTERS/Akhtar Soomro - RC2K4L9PI1C2

Pakistan’s Recent Power Blackout Linked To Forex Woes

Pakistan’s recent countrywide electricity blackout is a symptom of its enduring economic crisis as its forex reserves are dwindling and are not in a position to buy oil for the energy sector, writes Adnan Aamir in Nikkei Asia.

A prolonged shortage of dollars is wreaking havoc throughout the economy and a nationwide power outage this week underscored the razor-thin margins for error in Pakistan’s energy sector, he writes.
The government said the blackout, which lasted around 16 hours, was caused by a technical glitch in the transmission system, however, a federal official who spoke on condition of anonymity drew an indirect connection to dwindling fuel supplies, reported Nikkei Asia.

“The government turns off the power plants at night to save fuel,” said the official, who was not authorized to speak to the media, adding, “When they tried to resume them on Monday morning, the system tripped, and it created a crisis-like situation.”

As per distributors and some officials, a shortage of dollars will lead Pakistan toward an oil crisis, writes Aamir.

The Oil Companies Advisory Council — a body representing refineries, marketing, and pipeline companies — on January 13 sent a letter to the Ministry of Finance, a copy of which was seen by Nikkei Asia.

The group highlighted the problems industry players are having opening letters of credit to import petroleum products.

A letter of credit, or LC, is a document issued by the importer’s bank, guaranteeing payment to the exporter once the terms of the contract have been met.

“If LCs are not established on a timely basis, critical imports of petroleum products would be impacted, which may lead to a fuel shortage in the country,” the letter read. It further stated that once the supply chain is compromised, it could take six to eight weeks to normalize it.

The letter revealed further that Pakistan needs to import around 430,000 metric tonnes of gasoline, 200,000 tonnes of high-speed diesel, and 650,000 tonnes of crude oil every month. The total bill comes to about USD 1.3 billion, writes Aamir.

Echoing the council’s warning, the Power Division of Pakistan on Saturday wrote to the governor of the State Bank, saying stocks of petroleum products may dry up as banks refuse to open and confirm LCs for imports.

The Oil and Gas Regulatory Authority (OGRA) has downplayed the concerns over fuel, saying in a news release that Pakistan has enough stocks to meet gasoline demand for 18 days and diesel needs for 37 days.

But the federal official who spoke with Nikkei Asia said oil stocks are at dangerously low levels.

“Oil stocks are replenished on a regular basis through imports, which is not taking place as frequently as required due to the shortage of forex reserves,” he said.

Pakistan’s forex stockpile stood at USD 4.6 billion as of January 13, according to data released by the State Bank. The International Monetary Fund has estimated that Pakistan’s total external debt will be around USD 138 billion by the end of the current fiscal year in June, with about USD 21 billion worth of repayments due this year.

The situation has raised fears that Pakistan could join smaller South Asian neighbor Sri Lanka in default.

Islamabad is scrambling to revive a stalled IMF bailout program originally worth USD 6 billion and expanded with another USD 1 billion last year. (ANI)

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Imran Khan on Civil Govts

‘Establishment’ Has Power, Civil Govts Get Blame: Imran Khan

Former Pakistan Prime Minister Imran Khan has said that a democratic government in the country is held responsible for any crisis, but the authority lies with the military establishment.

“Such an arrangement cannot run anymore,” Pakistan Tehreek-e-Insaf (PTI) chief warned while addressing the ‘Rule of Law conference, held on Friday, according to The News International newspaper.

Khan blamed former Pakistan army chief General Qamar Javed Bajwa, stating that the uncertainty started the day his government was overthrown.

“Due to the decision of one person, the PTI-led government was toppled and the crisis started,” the former Pak prime minister said.

The PTI chief was ousted from power through a no-confidence vote in the National Assembly in April 2022. He has blamed a US-led conspiracy for his ouster.

In an apparent reference to former army chief Bajwa, Khan said: “One person decided to change the (PTI) government and hatched a conspiracy.”

He added that the coalition government had failed to tackle the economic crisis as “it does not have any plan” to restore the economy.

Khan said that never in the country’s history had Pakistan faced a worse economic crisis than the one it “faces these days”.

Earlier this week, Khan alleged that the federal government is determined to drive him out of politics. He even claimed that the coalition government is trying its best to disqualify him ahead of the general elections.

Referring to cases registered against him across the country, Khan said Thursday that fervent “efforts are being made to disqualify me from politics,” in an interview with the UK broadcaster.

Khan said, “they are trying their best” to disqualify him ahead of the general elections in the country, adding that “new cases are being registered” against him every other day.

However, he said there is absolutely no case that can disqualify him. (ANI)

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