DAWN Editorials - 20th february2025

[faheemustad]

Premature alarm

LAST month’s $420m current account deficit reflects the pressure of debt payment and a rising import bill on Pakistan’s balance-of-payments position, amid drying up foreign loans and falling foreign private investment. This gap most likely marks a temporary reversal of the earlier trend of continuous surplus posted for five consecutive months — August to December — on account of a substantial boost in remittances from overseas Pakistanis.

The remittances have recorded a surge of $5bn between July and January from a year ago. The January gap slashes the accumulated current account surplus from $1.2bn to $628m — still significant progress from the deficit of $1.8bn posted in the same period last year, spawning hopes that the current account surplus/ deficit will remain range-bound between +0.5pc and -0.5pc of GDP during FY25.

The gap in the current account is not surprising, given the 38pc decline in foreign loan inflows to $4.58bn in the first seven months of the present fiscal year from $6.31bn a year ago. In its monthly report, the Economic Affairs Division said that the external assistance does not include the $1bn received from the IMF under its funding programme. The government is targeting foreign debt inflows of $19.4bn, including $9bn from China and Saudi Arabia, this fiscal year. Though FDI has risen by 27pc to $1.3bn in the first half of the year, the meagre amount underlines the lack of investor confidence amid our painfully slow progress on structural reforms. And even after the passage of two years, the ‘promised’ investment flows from the Gulf remain elusive.


The weakened financial account indicates that debt payments and a surging trade gap of over $16bn is mostly being financed through the current account. The ‘empty’ financial account is also responsible for a reduction of $1bn in the State Bank’s international reserves in eight weeks from Dec 13 to Feb 7, despite the purchase of $3.8bn from the market in July-October.

The alarm being raised by some analysts is premature. It is anticipated that debt payment pressures will subside as most maturing loans have already been paid and imports are expected to slow down. If the momentum in remittances continues, we might see a small surplus in the current account.

Aside from a ‘natural’, gradual depreciation in the rupee value, there is also no reason for the exchange rate to deteriorate steeply. That said, the fragility of economic recovery demands that the authorities stop relying on remittances to finance the current account deficit and focus on attracting non-debt-creating foreign private investment. Improvement in headline inflation, leading to a fall in interest rates and reserves, besides a stable currency, has given policymakers a chance to fix investment policies and implement structural reforms. The window for changing course is small and time is running out.

Published in Dawn, February 20th, 2025


Forsaken province

AND the endless cycle of violence continues. The brutal killing on Tuesday night of seven Punjab-bound passengers in Barkhan district marks yet another tragic episode in Balochistan’s troubled history. That armed men could stop multiple vehicles on a major highway, methodically check identity cards, and kill innocent travellers speaks volumes about the state of security in Pakistan’s largest province. More troubling still is the fact that this has become a disturbing pattern that has claimed dozens of lives in recent months. Last August, 23 travellers were pulled from vehicles and shot in Musakhail. In May, seven barbers from Punjab were killed near Gwadar. April saw separate attacks in Noshki and Kech. Each incident follows the same horrifying script — armed men targeting civilians based on their provincial identity. While the prime minister and Balochistan chief minister have issued strong statements after the attack, the fundamental question remains: why does this cycle of violence continue unabated?

Much of the answer lies in the decades of neglect that has left Balochistan’s people disillusioned and marginalised. Despite being a resource-rich province, it has seen very little of the development that has over the years transformed other parts of the country. Basic infrastructure remains poor, educational opportunities are limited, and economic prospects for young Baloch are dim. This deep-seated deprivation has created fertile ground for extremist elements to exploit. And still, the political response to the situation has been tepid at best. Political parties are quick to condemn violence in statements, but show little genuine commitment to addressing Balochistan’s basic grievances. The province appears to matter only during election season, when grand promises are made and promptly forgotten. What steps has the ruling PPP and PML-N coalition in Balochistan taken for any lasting solution? And what have the Baloch nationalist parties done? Pakistan’s political leadership must demonstrate through actions, not words, that they have not forsaken Balochistan. The province needs not just enhanced security measures — though these are crucial — but a complete rethinking of how the federation engages with the province. This means genuine political dialogue, substantial investment in human development, and sincere efforts to bring Baloch youth into the national mainstream. Without addressing these core issues, we risk watching this tragic cycle repeat itself, with more innocent lives lost to senseless violence.

Published in Dawn, February 20th, 2025


In poor health

THE absence of decent and affordable healthcare in the country continues to ruin lives. An example of this is evident in the findings of an inquiry committee of the KP health department: in North Waziristan tribal district, 38 health centres have been established in private hujras, with landowners obtaining false OPD slips to create the impression of a functional facility; 20pc of staffers earn a paycheck without performing their duties; and 538 out of the 2,818 employees could not be verified. It was also noted that only 28 units were fitted out with 70pc of medical apparatus, while the rest faced a serious dearth of essential medicines, medical equipment, and basic devices, such as stethoscopes and thermometers.

When it comes to matters of life and death, the state seems unaffected. Although Pakistan has a lot of catching up to do — according to a WHO report for 2024, the country is far from achieving the global universal healthcare goal of 80pc — there is institutional reluctance to accept that an unhealthy populace with weakened abilities cannot prove productive for the economy. Indeed, it is a travesty that the physical and mental well-being of citizens does not receive significant space in the manifestos of political parties. This lack of political will towards safeguarding and investing in such a vital area has contributed to Pakistan’s negligible socioeconomic development. Prioritising quality health units is long overdue; international collaboration is needed and funds must be channelled towards the upgradation and expansion of the healthcare system. While healthcare is unsatisfactory in the urban areas, the rural areas have been deprived of even primary healthcare facilities. Moreover, for any progress to materialise, unscrupulous elements, such as those linked to North Waziristan’s sham health centres, must be penalised; the poor have no choice but to rely on the state for their health.

Published in Dawn, February 20th, 2025