david waker 
Pakistan is facing one of its worst economic crises. Economists have been critical of many policies, both long-term and short-term, and blame them for the current predicament India’s neighbour is facing. From investing more than necessary in the military to giving “freebies” and having an unstable political environment — a host of issues have been pointed out.
Watchers further say that Pakistan took several initiatives and policy decisions which were in its “political interest and not in economic interest”.
Ashwani Mahajan of the Swadeshi Jagaran Manch and Amir Jahangir, Founder and CEO of Mishal Pakistan, weighed in on Pakistan’s situation in an interview with Money Control. Here are some factors other countries should keep in mind to avoid swooping into the Pakistan-like situation:
1.Ashwani Mahajan said fiscal mismanagement is Pakistan’s major problem. He said the country followed “publicist measures leading towards more of subsidies and keeping prices of commodities lower just to please the people (or what is called freebies)”.
2. Pakistan kept prices of petrol and diesel lower. They chose to give subsidies to people that increased pressure on the budget and finances. Giving the example of India, Mahajan said the Indian government raised a lot of revenue through petroleum products, which was then used to build more infrastructure “with their own money”.
3. Pakistan has been building infrastructure “not as per their needs but as per the dictates of some foreign power”, Mahajan said while giving the example of the China-Pakistan Economic Corridor. Some of the power plants are parts of this project. “When Pakistan didn’t have sufficient grid connectivity, this actually would not work,” he said.
4. The government has been spending more than required on the defence sector. “The level of expenditure on defence has been high. That money could have been used for better purposes,” Mahajan said.
5. Moreover, Pakistan built infrastructure riding on foreign loans. An example is China’s Belt and Road Initiative. “The trigger for Pakistan’s problem is not coming from domestic policies, but because of the loans which they have taken for building infrastructure which was of no use to the Pakistanis,” Mahajan said.
6. Pakistan moves from manufacturing to services very quickly without actually building the manufacturing sector, said Amir Jahangir. “That is not helping the services sector because it was not ready to provide services to relevant economic factors which can help the economy,” he added.
7. Pakistan has leadership issues. There’s no Opposition in the Pakistan assembly and therefore, there’s no accountability of the current government, notes Jahangir.
8. “Not containing terrorism is also impacting Pakistan,” Mahajan said while emphasising that organisation looking at terror funding is also looking at Pakistan with suspicion. He said Pakistan’s major source of “remittance is non-resident Pakistani”. But, they will also stop sending money if they feel Pakistan is not safe to park their money, he said.
