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Home / World / The Myth of Austerity: Why PM Imran Khan's Populism Will not Solve Pakistan's Problems Asia | An in-depth look at news from across Europe | DW

The Myth of Austerity: Why PM Imran Khan's Populism Will not Solve Pakistan's Problems Asia | An in-depth look at news from across Europe | DW



Amid fears that the strained country may soon face a financial abyss, Prime Minister Imran Khan's newly elected government has introduced austerity measures to prevent Pakistan from providing the International Monetary Fund (IMF) with a financial rescue plan.

The government's quest for fewer VIP protocols has created a stir amongst the citizens who have long criticized the lavish lifestyle of the government leaders.

But economists say the government's austerity policy is nothing more than a populist trick That causes people to be misled as to how the government wants to deal with serious economic problems.

This is not the first time a Pakistani head of government has introduced austerity measures. In the early 1

980s, former military dictator General Zia propagated the idea of ​​"Islamic simplicity" as opposed to liberal governance. Former Prime Ministers Mohammad Khan Junejo and Nawaz Sharif published their austerity measures in the late 1980s and 1990s. All these efforts yielded no substantial result.

More: Imran Khan: A New Hope or Dividing Line for Pakistan?

A severe economic crisis

Pakistan's financial debt is currently estimated at $ 95.097 billion (€ 81.34 billion). The South Asian country needs $ 24 billion a year in debt service.

The country's trade deficit is also skyrocketing – $ 37.7 billion in fiscal year 2018. In the same fiscal year, Pakistan spent $ 60.9 billion on imports, and much of it went to the import of machinery for those run by China Pakistan-China Economic Corridor Multi-Billion-Dollar Development Initiative (CPEC)

They complain that the government gives preferential treatment to Chinese companies whose cheaper products have flooded Pakistani markets and shut down their businesses.

Instead of formulating a comprehensive economic plan, however, cricket politician Khan in his first speech told the nation as PM that he would force government officials to spend less. After becoming prime minister, Khan said he would move to a three-bedroom house instead of the large Prime Minister's Secretariat, and would also reduce other official expenses.

Former Finance Minister Waqar Masood believes these measures will not resolve Pakistan's economic woes

But Khan's Pakistan Tehreek-e-Insaf party (PTI) says the prime minister has sent a strong message to government officials and bureaucrats that their "luxurious lifestyle" is not tolerated by the newcomers

"The main thing is to restore people's trust in the government, the Pakistanis are generous people and have donated a lot to Imran Khan [for his cancer hospital]. because they trust him and because they have faith. " in their PM, I'm sure they'll pay taxes as well, "said Senator Faisal Javed Khan, Khan's close adviser, to DW.

Read More: Opinion: Imran Khan's Dangerous Victory

The Elephant in Space

Interestingly enough, Khan said nothing in his speech about the military budget – the second largest government issue

Pakistan, which borders Afghanistan, Iran, China and India, Spends a lot of money on defense. The military cites external and internal security threats as the reasons for these expenses. The country's defense budget now stands at nearly $ 12 billion a year and many experts consider it disproportionately large compared to the Pakistani economy.

"Pakistan is a security state whose parliament never debates the defense budget, and military expenditures do not even go." Muhammad Ziauddin, former editor of the English newspaper Express Tribune told DW

"The military generals are operating hundreds Understandably, Khan's austerity measures do not cover the luxurious lifestyles of the generals, and if the new government really wants to change things and improve the economy, then it should reduce the mammoth military budget and tax on that Economic empire of the military raise, "added Ziauddin.

Economist Azra Talat Saeed believes that no civilian government is powerful enough to confront the military with the defense budget.

"It's even hard to get the exact defense budget numbers because there's an official defense budget, and then there are also" undisclosed "issues," said Saeed DW.

PTI Senator Faisal Javed Khan disagrees that the government rejects the army. He says PM Khan's austerity measures will gradually cover all state institutions.

Read more: Pakistan faces multiple crises as PM Imran Khan takes power

Can China help Pakistan?

Some economists and political scientists believe that while Pakistan's relations with the US have been strained for some time now, regional ally China could help the new government.

But economist Saeed says it would be unwise to rely on China. "China can save us, but the help will not come without conditions, we have already taken huge loans from China, and trust Beijing to know how to take back these loans, for example, Sri Lanka could not repay its debts." So China negotiated a long-term lease agreement with Colombo, which proves to be paltry, "she said.

Economists are almost in agreement that the Pakistani government must approach the IMF to rescue the economy, but the attitude of the Trump government Pakistan could make the loan more difficult Washington, which has the largest share in the IMF, has warned that Islamabad may not use western money to repay its Chinese credits.

Terrorism and Help

The Western financial assistance is also linked to the Trump government's call for Islamabad to intervene in jihadist organizations operating on Pakistani soil, but Imran Khan has explicitly mentioned his position on Afghanistan and the Taliban. Intervention in Afghanistan responsible for the rise of extremism in the region and demands that international forces leave the war-torn country. He also advocates a political solution to the Afghanistan conflict.

Khan and the Pakistani military generals are on the same page about the terrorist issue – that Pakistan is not responsible for the problem. Since coming to power, Khan has not talked about the problem of domestic jihadism and how he wants to deal with it.

Faced with these conflicting approaches to terrorism, it is unlikely that the US would ease economic restrictions on Pakistan soon

Read more: United States, Pakistan argue over whether Mike Pompeo terror with Imran Khan talked


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