Negative impact: ‘Sit-ins disrupting government’s plans for the economy’

ISLAMABAD: The political impasse caused by the sit-ins of Pakistan Tehreek-e-Insaf and Pakistan Awami Tehreek, have caused a loss of Rs800 billion to the economy – a figure that may further unnerve the investors – said a government official.

Imran Khan-led PTI and Tahirul Qadri’s PAT have staged sit-ins since Independence Day in hopes of getting Prime Minister Nawaz Sharif to resign. However, so far, talks have remained deadlocked between the opposition and the government.

“The current protests have paralysed our economy. Direct losses to the economy have reached up to Rs800 billion while indirect losses have amounted to several hundred billions,” according to a statement of Commerce Minister Khurram Dastgir.

The Commerce Ministry has not attributed the estimates to any official source but said that these estimates were worked out by “experts”. Usually, the Ministry of Finance, Revenue and Economic Affairs is the responsible ministry to give such estimates.

The minister stated that the devaluation of rupee against the US dollar and the constantly fluctuating exchange rate have increased Pakistan’s external debt by Rs350 billion. Before the political crisis struck the country, the rupee-dollar parity was Rs98.7 to a dollar that has now gone over Rs 101 to a dollar.

As of end June, Pakistan’s external debt stood at Rs4.8 trillion or $48.6 billion, higher by Rs480 billion or 11.2% over the previous year’s Rs4.3 trillion. The rupee depreciated by Rs4.4 to a dollar. By this account, the country’s external debt in terms of rupee increased by Rs213 billion in the last two weeks –a figure that is Rs137 billion less than the official claim.

According to the commerce minister’s statement, the uncertainty caused by this political turmoil has made the investors skeptical.

Independent economists say that higher than the actual losses may further damage the economy. They feared further depreciation of the rupee and its adverse impact on the stock market.

The government is also responsible for causing indirect losses to the economy as it has positioned thousands of containers to seal Islamabad. This hampers the to-and-fro movement of goods from the country, say independent analysts.

The containers have been placed on roads and streets that connect various sectors of the federal capital. This is creating more problems for commuters. Supporters of both parties are already in the red zone –the nerve centre of the government.

Dastgir said the protestors’ unreasonable demands to assume power by hook or by crook have tarnished the image of the country.

He said the heads of states of China and Sri Lanka have already postponed their important visits due to the prevailing situation and the country could not hold important negotiations with these economic partners.

“The negative politics being played in the country is misleading the youth. The country will have to strive in erasing the harmful effects of this upheaval on the economy,” said the minister.

“Social stability and development issues are directly linked to the economic sustainability in the country,” he remarked.