Pakistan’s Economic Woes

November 17, 2008

Confirmation here that the IMF has agreed to loan Pakistan a sum worth £5.1 billion. Its economy is in a perilous condition and as I have previously mentioned the collapse of Pakistan’s economy would lead to disastrous consequences – and not only for Asia. Pakistan is a nuclear power and with the growing number of militants and Islamists actively undermining the rule of law and democracy, a further weakening of the economy could lead to more violence and further destabilisation of the country. Do read this weeks article in the spectator by Elliot Wilson who concludes that:

‘Fading hopes of a fiscal rescue rest on a financial injection from the IMF and World Bank in Washington — assuming, that is, that the US-centric institution feels like bailing out a country now cozying up with Beijing. The bleak situation is summed up by Farrukh Sabzwari, the head of Pakistan’s largest stock trading house, KASB Securities. ‘Everything that could have gone wrong has gone wrong, from currency reserves to skyrocketing energy prices to terrorism and the rising threat from the Taleban,’ he says. ‘There is a crisis of confidence in every part of the country.’

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