Bankruptcy stares Pakistan hit by useless spending

 December 23, 2022

Pakistan is on a spending spree, with economy in shambles and people in dire straits.

The proverbial ostrich finds its parallel in the banana nation and buries its head in sands, in denial of the existence of painful realities.

However, the extravagant nature of expenditure is not directed towards welfare, but for glossing over the counts it does not fare well. It leaves no stones unturned in sustaining the make-believe world of normalcy, even as most of its citizens have hardly any access to square meals.

It remains a mystery that how a cash-strapped Pakistan manages to fund its obsession with Kashmir and other unproductive ventures, while continuing to barrel down the negative growth track and poised for smashing into bankruptcy. A close look in its state of affairs reveals some interesting developments.


All is not well with the employees of Pakistani Missions in foreign countries as payment of salaries remains pending for the past four months. Despite letters elaborating their hardship to the Foreign Ministry, nothing has been forthcoming so far. Funds to the tune of US$ five million are yet to be released. No solution is in sight, even as the matter was taken to the Finance Ministry. The reason is shortage of foreign exchange.

Similarly, the Balochistan government has communicated its inability to pay salaries for January 2022 in the event of the Centre not releasing the province’s share under the National Finance Commission Award (NFC). Out of PKR 131 billion that Balochistan was supposed to obtain from the federal resources under the NFC Award from July to November this year, only PKR 101 billion has been given. Same are the cases with Gilgit-Baltistan, Khyber Pakhtunkhwa and Pakistan occupied Jammu Kashmir (PoJK).

However, Pakistan’s commitment to contribute US$ 3,000 to the total of US$ 75,000, earmarked by the Pakistan Mission in Ankara, Turkey, was hardly marred by the concerns of fund crunch. This was because the conference, slated for the second week of December 2022, was themed upon Kashmir. This apart, about US$ 41,500 was allocated for spending towards organising Kashmir Black Day on October 27 this year across its foreign missions.

Pakistan’s fixation with Kashmir knows no bounds, even to the extent of inflicting self-injury time and again. Unheeding its mounting forex reserve crisis, a whopping PKR 60 million has been set apart for Kashmir Fund for FY’23.

Daily life takes a beating in Gilgit-Baltistan of Pakistan, with people being plagued by power cuts in extreme winter, deplorable condition of government hospitals and unavailability of safe drinking water, among others. Hemmed in by mountains, Gilgit-Baltistan is a far-flung area in Pakistan. Roads built during the periods ruled by Pakistan Muslim League-Nawaz (PML-N) and Pakistan Peoples’ Party (PPP) fall short of what is required.

Meanwhile, people in Pakistan occupied Jammu-Kashmir (PoJK) have started raising their voice against suppression of human rights and smothering of democracy by Pakistan. The protests were sparked by an insult hurled by Pakistani Prime Minister Shehbaz Sharif on PoJK leader Tanvir Iliyas, when the former’s guard attacked the latter during an official function following an altercation. Cries demanding freedom from tyrannical rule of Pakistan have rent the air in PoJK.

Incidentally, Iliyas belongs to Imran Khan’s Tehreek-e-Insaf (PTI), which was ousted from power in April this year through ‘no-confidence voting’. Iliyas was even heard ruing about Sharif “not making a mention of the sacrifices of the people of PoJK” and “instead of offering anything to PoJK, PM Sharif made announcement for other areas of the country”.


Some of PoJK’s local leaders and activists have started drumming up support of international organisations and democratic countries, and highlighted how Pakistan and its all-powerful military establishment is indulging in rampant corruption. United Kashmir People’s National Party (UKPNP) is one such party having dared to castigate the Pakistani government and its military for resorting to undemocratic means to undermine local governance in PoJK.

In a letter recently to Chair Foreign Affairs Committee in European Parliament, David Mc Allistter and President of European Commission Ursula von der Leyen, UKPNP’s Central Secretary and Director for Committee on Foreign Affairs (Brussels & Eastern Europe) drew their attention to appointments of extremist elements in the PoJK “government”.

Turkish home appliances major Arcelik A.S. had heavily invested in Pakistan through acquisition of Dawlance, the leader of a kind in Pakistan, in 2016. Employing over 4,500 people in Pakistan, it is involved in the manufacturing of various electrical devices. However, after having suffered heavy losses worth PKR 1.3 billion, the firm has hit a rough patch and was contemplating temporary shutdown of its production facilities. Dawlance is annually incurring financial costs amounting PKR 300 million, with current high interest rates and import restrictions continuing to add insult to the injury.

Recently, the Global Sovereign Advisory (GSA), a sovereign financial advisory firm based out of Paris, has made it clear to Pakistan that the rising yield and spread of Pakistan’s debt instruments affected market confidence.

With Pakistan fast slipping into the whirlpool of dead broke condition, now compounded by apathy from China, flight of firms and mounting unrest seem to have supplied the final nail in the failed state’s coffin.

It remains to be seen how long Pakistan could afford basking in the glory of illusion fostered by useless enterprise.

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