PAKISTAN FACE POVERTY AND FINANCIAL CRISES IN FUTURE

Pakistan has been facing poverty and financial crises for several decades, and unfortunately, these issues are likely to persist in the future as well. Despite numerous government efforts to alleviate poverty and boost the economy, poverty and financial crises continue to plague the country. In this essay, we will discuss the reasons why Pakistan faces poverty and financial crises and explore possible solutions to these issues.



 Lack of Education:

One of the primary reasons for poverty in Pakistan is a lack of education. According to the Pakistan Economic Survey 2020-21, the literacy rate in Pakistan is only 60%. Due to a lack of education, people are not able to acquire skills that can help them secure better jobs or start their own businesses. This leads to a cycle of poverty where people are unable to improve their economic situation.

Unemployment:

Unemployment is another major factor contributing to poverty in Pakistan. The country has a large population, and the job market is not growing at the same pace. This results in a high unemployment rate, particularly among the youth. Without employment, people are unable to earn a living, which leads to poverty.

Inflation:

Inflation is a significant problem in Pakistan, particularly for low-income families. When prices rise faster than wages, people are unable to afford basic necessities such as food, housing, and healthcare. Inflation also reduces the purchasing power of money, which means people are unable to save money for emergencies or invest in their future.

Corruption:

Corruption is another major factor contributing to poverty in Pakistan. It is estimated that corruption costs the country billions of dollars every year, which could have been used to improve the economy and reduce poverty. Corruption also undermines the government's efforts to provide basic services such as education, healthcare, and infrastructure.

 Limited Access to Credit:

Access to credit is crucial for starting a business or investing in education or healthcare. However, many people in Pakistan do not have access to credit, particularly those living in rural areas. This limits their ability to improve their economic situation and contributes to poverty.

Causes of Financial Crises in Pakistan:

External Debt:

Pakistan's external debt has been rising rapidly in recent years, and it is expected to reach $116 billion by June 2022. This debt burden puts pressure on the economy, as a significant portion of the budget is allocated to debt servicing rather than development projects. It also makes the country vulnerable to external shocks such as changes in interest rates or currency fluctuations.

 Trade Deficit:

Pakistan has a significant trade deficit, which means it imports more goods than it exports. This deficit puts pressure on the country's foreign exchange reserves and contributes to the balance of payment crisis. To cover this deficit, the country has to rely on borrowing or remittances from overseas Pakistanis, which is not a sustainable solution.

Political Instability:

Political instability is a major challenge for Pakistan's economy. Frequent changes in government, political turmoil, and security threats undermine investor confidence and deter foreign investment. This results in a slow economic growth rate, which exacerbates poverty and financial crises.

Energy Crisis:

Pakistan is facing an energy crisis, with frequent power outages and a lack of access to electricity in many areas. This crisis has a significant impact on the economy, as industries are unable to operate at full capacity, and people are unable to perform daily activities such as studying or working.

Poor Tax Collection:

Tax collection is a significant problem in Pakistan, with a large portion of the economy operating in the informal sector. This results in a limited tax base, which means the government has limited funds to invest in development projects. It also leads to a lack of accountability, as people are not paying their fair share of taxes to support the government's