Supporting terrorism is now a cause of constant crisis for Pakistan. After the attack on CRPF convoy in Pulwama on 14 February, India hit some terror targets in Pakistan, in which India also shoot down an F-16 aircraft of Pakistan on its second day of purge.
This tension between India and Pakistan weighed heavy on Pakistani financial markets, with Karachi Stock Exchange’s benchmark KSE 100 taking a plunge. The impact was seen in market which plunged below 39,000 points for the first time in the last 32 sessions on Tuesday. Pakistan’s benchmark KSE100 plunged over 3 per cent in Wednesday’s trade after Indian Air Force shot down one of three F-16 jets of Pakistan Air Force (PAF) that had violated Indian air space.
The KSE100 index has plunged 3,025 points, or 7.46 per cent, so far since February 14. On Wednesday, it traded 3.47 per cent lower from previous close at 37,518. India’s BSE Sensex has slipped 205 points, or 0.57 per cent, to 35,828 since February 14. It was down about 50 points at 35,927 on Wednesday.
Pakistan’s economic growth this financial year is likely to hit a nine-year low, dipping to almost 2.9 per cent. On the other hand, the Indian economy, has been growing at the fastest rate globally, and is estimated to log 7.3 per cent growth this financial year. India is estimated to reported 6.9 per cent growth in December quarter, compared with 7.1 per cent in July-September.
Which sectors are worst affected
Other than the political tensions, significant fall in international oil prices saw exploration and production companies as the worst performers, chipping away 156 points. The index heavyweights, Habib and United Bank were again the major laggards.
Major decliners were Pakistan Petroleum, down 2.8pc, Oil and Gas Development Company 2.6pc, Habib Bank 0.8pc, Engro Corporation 1.6pc, MCB 1.6pc, Hub Power 0.1pc, Fauji Fertiliser 1.4pc, United Bank 1.9pc, Pakistan Oilfields 2.1pc and Lucky Cement 3.2pc, scrapping 314 points. On the flip side, Pakistan Tobacco went up 5pc to add 30 points.
The volume increased 137pc to 162m shares, from 68m while average traded value surged by 89pc to $50m, as against $26m. Most active stocks were Bank of Punjab, K-Electric, Engro Polymer and Chemi¬cals, Pakistan International Bulk Terminal and Maple Leaf Cement, which contributed a third to the aggregate volume.
Wednesday's fall at KSE is also the biggest since July 11, 2017, when the index fell 4.65 per cent after a Joint Investigative Team (JIT) on money laundering reported that then Prime Minister Nawaz Sharif and his children had accumulated wealth beyond the known sources of income.
Earlier in this month, in the latest ratings review by the global rating agency Standard & Poor's sovereign credit rating of Pakistan, which was at "B" level till date has now been reduced to "B-". After this step, Pakistan is down 6 ratings points with the AAA rating to be the most favorable for investment. This means that the economic financial and business situation of the country receiving this rating has reached the most dangerous situation.
Pakistan has been dependent on new loans to repay loans and interest on them constantly. At present, the budget deficit of Pakistan is 2 trillion Pakistani rupees and it is increasing steadily fast and since expenditure is more than revenue it does not seem to be in control in the near future. In the same way, Pakistan's import is much more than export, in that case its foreign exchange fund is moving towards the end, on the other hand, the exchange rate of Pakistani rupee with the major foreign currencies of the world is continuously declining. Standard & Poor also believes that if Pakistan lays down the loan program with the International Monetary Fund, then it is a direct sign that the pace of economic reform in Pakistan is very low. And it is also clearly reflected by some key figures of Pakistan's economy.
Diplomacy mingled with money!
The withdrawal of America as a neutral powerbroker has left China with a degree of diplomatic influence over Pakistan and China may yet prove to be the more decisive diplomatic influence in enforcing restraint. Pakistan’s Khyber-Pakhtunkhwa province, not far from where Indian warplanes struck on Tuesday morning, is a major site of Chinese investment. The $1.3bn (£980m) 70-mile Thakot-Havelian road project passes through Mansehra, a district where the Indian air attacks took place. A major hydropower project is also under construction. Further military action in the area could jeopardise that investment. At the same time, China would never want that because of Pakistan, any kind of flame was inflicted on her foreign trade.
Poverty eradication or terrorism?
Even today, more than 58 million Pakistanis are living below the poverty line (the total population is about 18 crore, in 2014). In the Pakistan Social and Living Standard Measurement Survey, it has been found that "most of Pakistan's homes do not have adequate potable water availability; many of them do not have toilet and adequate sanitation system. According to official figures, more than 80 million People do not have toilets.
Due to poor hygiene and insufficient water facilities, Pakistan loses 3.94 percent of GDP every year. Due to poor water and sanitation, in Pakistan, estimated 97,009 people die each year, due to the lack of sanitation and polluted water services, 54,000 children under five years of age are diagnosed with diarrhea. In 2017, the child mortality rate was 45 percent, and in Pakistan 60 percent of the total number of child mortality cases are due to unclean and unhygienic diseases.
And after all these anomalies, Pakistan, instead of improving the position of its people, uses its resources to spread religious fanaticism, support terrorist outfits and collect military equipment against India. According to the research of the World Bank and Center for Research on Poverty and Income Distribution (CRPID), Pakistan is among the most exposed to the risks of poverty in a study conducted in 43 countries.
Imitation like a nuclear super power in a tattered financial and political condition is totally ridiculous, and the time is soon to come when Pakistan will not be able to save its sovereignty.