Asif Maseeh, a regular income worker, wakes up each morning wondering how he will provide for his home of seven.
Mr. Maseeh told the BBC,” We only pray to God that we’ll find a way to have tomorrow.”
The 45-year-old is one of an estimated 700,000 employees who have lost their jobs in recent years as a result of Pakistan’s crisis-stricken shutdown of about 1,600 clothes companies. The country’s cotton companies, which account for 60 % of its total export earnings, are made up of this.
After being fired earlier this year from his position at a stock that produced clothing for international fashion brands, Mr. Maseeh began performing manual labor and operating an rickshaw.
Mr. Maseeh and his family Shamim Asif discussed how the rising cost of living is affecting them and their five kids while sitting in a barely lit one-room residence in the business district of Youhanabad in Lahore. The few puts in more hours to provide for their two sons and three daughters, none of whom attend school.
” We used to manage our daily expenses with 500 Pakistani rupees ($ 1.40,$ 1.75 ) per day. Things have changed since then. We need 1,500 pounds to prepare only one meals, according to Mr. Maseeh.
” Our profits are not even enough to provide a good dinner,” his family continued. How are we going to pay for our kids to go to school?
With rising prices, more rising energy prices in January, and an impending general election in February, there is also more doubt on the horizon.
Industrialists in Karachi, Pakistan’s largest town and a transportation hub, have also threatened to stop production entirely on December 4 unless the state reverses unheard-of gas tariff increases.
Following sharp rises in the prices of power and other necessities, some Pakistanis have already been forced to look for additional income. This is partially a result of the IMF’s lending policies, which prompted the government to stop providing electricity subsidies.
After reaching a record 38 % in June, the inflation rate dropped to 29 % in November. In what analyst and former finance minister Miftah Ismail referred to as a “disastrous” position for the poor and working class, the price of basic food items like wheat bread, meat, and rice has occasionally more than doubled in recent years.
Pakistan has its own issues in addition to the war in Ukraine, a slow post-pandemic treatment, and fluctuating energy prices that have had an effect on the cost of living worldwide and caused the closure of 1, 600 clothing factories.
In April 2022, a political turmoil erupted after Prime Minister Imran Khan was ousted by political vote. For decades, opposition gatherings were held, which stifled economic growth. Until the next month’s election, an interim custodian management is in place.
In order to implement a strict interpretation of Sharia rules, Islamist militants have attacked Pakistan and carried out suicide bombings as part of the country’s security crisis.
Pakistan should be appealing to investors due to its diverse, wide geographical and young population, particularly for labor-intensive industries like the production of clothing or automobiles. But in addition to the latest unrest, Afghanistan’s neighboring country has also been impacted by decades of conflict, with millions of Afghan migrants crossing the border.
Pakistan is not well-liked in the rest of the world, according to reports. It’s not being a pleasant place to do business, and there is an image issue in terms of law and order, Mr. Ismail said.
Pakistan’s foreign exchange reserves held by its main banks fell below$ 3 billion earlier this year due to unpaid bills and an increasing import expenses; this is not even enough to cover a month of goods.
Islamabad was able to secure$ 3 billion in emergency funding from the IMF in July after months of negotiations. Its foreign dollar resources have also been strengthened thanks to friends like China, Saudi Arabia, and the UAE.
The interim government quickly raised natural gas prices for the majority of households and industries in October in advance of a review of the IMF lending program in an effort to lessen losses to the state-run fuel sector. For instance, the fixed price for more than half of family consumers has increased from 10 to 400 rupees per month.
” Our energy costs have recently doubled. According to Kamran Arshad, president of the All Pakistan Textile Mill Association, North Zone, businesses that are unable to handle the rising cost of production are closing down, resulting in hundreds of job loss.
” The government no longer enjoys trust among its own people. The state of the economy is terrible. Individuals are therefore willing to take significant risks in order to escape, according to Sabrin Beg, an associate professor of economics at the University of Delaware.
Investors were afraid a decade ago when Pakistan fought Islamist insurgents in the north-west, with the exception of China, which injected billions of dollars into the market. In order to emphasize how close their marriage is, it also refers to Pakistan as its” Iron Brother.”
China is investing more than$ 60 billion in the China-Pakistan Economic Corridor ( CPEC ), which started in 2015, as part of the Belt and Road Initiative. This links China’s north-western region of Xinjiang with the Bangladeshi port of Gwadar in the Arabian Sea via a system of bridges, railway, and pipes.
The project, which represents China’s largest abroad expense, is expected to contribute to the development of the Pakistani economy. However, researchers are unsure if the purchases will bring in enough money to repay the Chinese loans. According to the IMF, Pakistan owes China about$ 30 billion.
” The Chinese funding looks promising. However, because we are using borrowed money to build system, we run the risk of being held accountable. According to Prof. Beg, a provider like China may eventually receive their money back.
Any new government that takes office following the February votes will have its work cut out reviving the business, even with the support of an Iron Brother.
More information from Amel Ghani in Lahore
