This Country Is Threatening Bankruptcy, The Second Sri Lankan Candidate in Asia

Jakarta, CNBC Indonesia – The crisis is increasingly felt in Pakistan. Most recently, the country experienced a large-scale blackout (blackout) on Monday, (23/1/2023).

According to the Pakistani authorities, this was caused by a voltage spike that occurred. It was the second major network failure in three months, and adds to the record blackouts the country of nearly 220 million has been experiencing.

Analysts also blame this situation in detail for a lack of resources to power state-owned power plants such as oil and gas. The sector is so indebted that it cannot afford to invest in infrastructure and power lines.

“We have added capacity, but we did it without increasing the transmission infrastructure,” Fahad Rauf, head of research at brokerage Karachi Ismail Iqbal Industries, told Reuters.

This in itself exacerbated the suffering of the crisis in that country. Apart from swelling debt, Pakistan is also experiencing a foreign exchange crisis.

On January 6, it was reported that the State Bank of Pakistan had only US$ 4.34 billion (Rp 64 trillion) in foreign exchange. This will only meet import needs for the next three weeks.

“The decline in foreign exchange was due to the repayment of US$ 1 billion in commercial loans to two banks based in the United Arab Emirates,” he wrote. Financial Post.

Remittances from the country also recorded a weakening. In the July-December 2022 period, shipments were recorded at US$ 14.1 billion, US$ 1.7 billion lower than the same period last year.

For the value of the rupee, there is a degradation in the value of the currency against the US dollar. Data from Trading Economics said that over the past four weeks, the Pakistani rupee has weakened 2.21% against the US dollar

Meanwhile, in the industrial sector, there was also a decline with the large manufacturing sector recording a decrease of 7.75%. Agriculture in Pakistan is also in a precarious state, due to bad government policies, lack of investment and lack of automation.

With this situation, Pakistan was also pushed in inflation up to 31%. year-on-year (yoy). All these factors have increased Pakistan’s daily difficulties, especially with regard to food and energy sources.

Apart from food and energy, medicines are also one of the things that have been depleted in the last 6 months in this country. Pakistan even ran out of its common fever and pain medication, Panadol, in September 2022 when it was hit by severe floods and an outbreak of dengue fever.

Even medicines used for the treatment of diabetes, as well as Vitamin C supplements have also been in short supply.

To address this situation, Islamabad is seeking financial support from countries such as China and Saudi Arabia as well as the International Monetary Fund (IMF). So far, the IMF itself will release funds worth US$ 6 billion to help Ali Jinnah’s country.

“To support Pakistan, Saudi Arabia has expressed its willingness to deposit another US$2 billion into the State Bank of Pakistan, after carrying out a ‘study’. Similar assistance is also expected from China,” the report added. Financial Post that.

Apart from that, the government of that country is also taking steps to sell the old building of the Pakistani Embassy in Washington DC which is estimated to be worth US$ 5-6 million.

“The Embassy of Pakistan in the United States of America has received nod from the foreign office to sell its old building, which was neglected for the last 15 years,” the news agency quoted ARY.

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(luc/luc)