India’s foreign exchange reserves had risen for a third straight week to total $609.02 billion as of July 14, the highest in nearly 15 months.

The current level of forex reserves, along with the RBI’s (Reserve Bank of India’s) forward foreign exchange book of $19.3 billion, is said to be enough to cover over 11 months of imports. Not only did India’s foreign exchange reserves post a strong performance, its currency, the rupee, also had traded in a range of 81.9300 and 82.6550 during that week.

My argument is whether or not our country is in a position to compete with India in any area of economy any longer. Or, is it fair to draw legitimate or plausible parallels between the two economies? Obviously, the answer will be in a very big “no” in view of the fact that although India and Pakistan have a shared history and divided present. How ironic and painful it is that until two decades ago, our per capita income was superior to India’s. What has gone wrong? In my view everything has gone wrong since then.

Although the International Monetary Fund (IMF) has recently lent a helping hand to enable us to successfully avert the looming sovereign default, the situation in the country still casts an air of deep pessimism over the future of economy. The World Bank’s diagnosis of the country’s ailing economy has also added to my pessimism.

According to the World Bank, “Pakistan’s economy is currently under severe stress with low foreign reserves, a depreciating currency, and high inflation. …Economic activity has fallen with policy tightening, flood impacts, import controls, high borrowing and fuels costs, low confidence, and protracted policy and political uncertainty.”

The World Bank may be accused of stating the obvious, but the very mention of ‘protracted policy and political uncertainty’ challenge by it constitutes an indictment of our politicians in particular. That the country is witnessing a political impasse almost on the eve of arrival of a caretaker setup in the country is a strong case in point.

Hanif A. Kidwai (Karachi)

Copyright Business Recorder, 2023