KARACHI: There are a number of crises confronting the country right now, including those of energy sector, economy, weather (particularly rains and floods), and the trade deficit. They are big challenges being faced by the whole nation, said Ateeq Ur Rahman, economic and financial analyst.
Our economic crises are severe and growing day by day due to international phenomena and political uncertainty. Inflation is playing a vital role which is ballooning up to 44.58 percent and oil prices are all time high.
Certainly Russia Ukraine War has also affected the economic condition of Pakistan.
Due to poor production and distribution system, the country is facing energy crisis including circular debt and high rise in the cost of production.
Our nameplate electricity producing capacity is nearly 35000 mwt, the requirement is nearly 25000 mwt, the production is nearly 18000 to 19000mwt and the shortfall is almost 7000 to 8000mwt. The total dependence of Energy production is through foreign exchange, fuel, LNG and coal, which needs urgent shift to hydro power, solar and wind to bring the cost of production down.
Talking of coal we nearly need 25 million metric ton where alone nearly 18 million metric ton is being consumed by our five coal based power plants rest is being consumed by cement, steel and textile industry.
Our local production of coal is nearly like 7.5 million metric ton. We import 80 percent coal from Indonesia and South Africa, rest 15 percent is imported from Australia, Russia and Afghanistan. Country on emergency basis needs to go for solar and wind energy. It needs refinancing schemes by financial institutions for making its access easy. Thus, it will compliance for a cheaper energy for people in the country.
Trade deficit always creates foreign exchange and balance of payment crisis. We need to tap new markets to explore our exports. Rising import is a big hazard to the economic development of the country. There is a huge trade gap between exports and import.
Recent rains and floods have created devastation, loses of property, people and infrastructure on a larger scale. Hundreds and thousands of people are homeless, without food and medical support services. It’s a complete loss to the economy which eventually will come out with massive crisis of rehabilitation and disaster management. Our many small dams and water reservoirs have been destroyed by the recent flood. It is unavoidable that we do not go urgently for big and small dams.
He added that the day by day increasing cost due to enormous shortage of food supplies and their paucity is increasing the inflation.
Copyright Business Recorder, 2022
Comments
Comments are closed for this article.