Even though denied repeatedly and vehemently, the country is said to be facing a default-like situation in terms of meeting its international financial obligations because the foreign exchange reserves are at a seriously low level. The reserves are just about enough to pay for the average monthly imports. Just to put the situation in its due context, economists recommend that for any country to be solvent, foreign exchange reserves should be the equivalent of at least three months of the import bill.
Politicians are bound to say what suits their own interests. Just switch the government and opposition camps, and they would conveniently adjust their views on national economy. However, the word of independent economists must be taken seriously. A default is going to be extremely harmful in every sense of the word.
Given our huge population and dependence on imported goods, I believe a default, if it really happens, will create unrest in the country because the supply of imported fuel, edible, industrial material and just about everything will stand disturbed.
The government has been trying to avoid the looming threat by meeting the conditions imposed by the International Monetary Fund (IMF) to get the next tranche of the negotiated loan. I wonder if that will be enough to help us wriggle out of the tight spot we find ourselves in.
Who, then, can really save Pakistan from default? I believe we can save ourselves by taking several actions. There are about 10 million Pakistanis working abroad. Every overseas Pakistani who claims to be as patriotic as any other Pakistani in the land can and should remit $1,000 to the credit of his/her bank account in Pakistan. This will add up $10 billion to the national foreign exchange reserves, which will help the rupee regain its lost value, and in bringing down inflation.
Resident Pakistanis should try to save 10pc of their electricity and fuel consumption which will save billions of dollars now being spent on import of fuel. On their part, the rulers of the country, for once, must ensure good governance.
The above three actions will surely save Pakistan from the imminent threat of default. As an observer of the national economy, I think the cost of default will be much higher for all of us than what we need to do to avert such a calamity. Pakistan belongs to all of us and we owe a lot to Pakistan. Saving Pakistan from default means saving ourselves and our future generations from a lot of troubles.
EJAZ AHMAD MAGOON
DOHA, QATAR
