Pakistan is facing an economic, climate and political crisis. The policy changes that went into securing the recent IMF deal have skyrocketed the prices of food, fuel as well as essential items. The government has also brought in many new taxes and increased the existing prices.
Pakistan’s Political Crisis
The political crisis is perhaps the most important one. It affects both the climate as well as economic crisis. Ever since the coalition government ousted Imran Khan through a no-confidence motion, Pakistan’s politics is in turmoil. The incumbent prime minister Shahbaz Sharif and his ministers from the coalition of several parties have been doing everything to hold on to the power. Their main opponent is Imran Khan, who is becoming more and more popular out of power.
The government has booked Imran Khan under anti-terrorism charges. The charges brought against him are frivolous in nature. The government booked him for threatening police and the judiciary. Ever since the government banned the broadcasting of Imran Khan’s speeches. Khan faced arrest but the government has treaded with caution. There were huge rallies across Pakistan and around Khan’s residence, deterring the government from the arrest. A court later gave him anticipatory bail.
Stuck in a Mexican Stand-off
Even though Pakistan is right now facing a huge crisis in the form of floods, the politics between the ruling coalition and Imran Khan-led opposition has not stopped. They are stuck in a Mexican stand-off. The two sides have involved many state institutions in their fight. They have dragged Establishment or the Pakistani army into politics. Imran Khan and his party allege that the army conspired against him and supported his ouster. Khan’s adviser Shahbaz Gill is in jail for giving statements against the army. Further, the PTI has also dragged Election Commission of Pakistan (ECP) into the controversy with Khan questioning its neutrality. The ECI has alleged that Khan-led PTI was involved in illegal foreign funding.
The incumbent government has launched a witch hunt against Imran Khan and his supporters. They want him in jail by hook or by crook.
Every day PTI and the current level have new allegations against each other. Mudslinging is the new norm of Pakistani politics. The incumbent government alleges that PTI is undermining the IMF deal. Audio leaks of a PTI leader are doing rounds on social media. The government has questioned the PTI leader’s stance on the IMF deal.
Also read: Pakistan’s March towards Democratic Reform
Pakistan’s Afghanistan Factor
The PTI allege that the current government has allowed the US to use Pakistan’s airspace for carrying out drone attacks in Afghanistan. Taliban has endorsed this point. They have called on Pakistan to stop the US from using their air space for carrying out attacks in Afghanistan. The Pakistani government has disregarded Imran Khan’s “absolutely not”. Imran Khan had refused to cower under US pressure. He had made it explicit that Pakistan will not allow the US to use its airspace for carrying out any attacks on Afghan soil.
The new government needed help from the US. Securing an IMF deal was the priority. They seem to have allowed the US to use Pakistani air space in return for the IMF deal. This transactional diplomacy might help Pakistani in the short term, but it will create problems in the long run.
The use of Pakistani airspace against the Taliban will only complicate Pakistan’s geopolitics. Taliban have already taken a hostile stand against Pakistan. From their past experience, the Taliban know Pakistan cannot be trusted.
Pakistan must not leverage Afghanistan to score points with the US. Afghanistan is already facing an economic and food crisis. They should be left alone.
Pakistan’s Democracy in Danger?
If experience has taught Pakistan anything, it is that when there is an economic crisis, politicians are stuck in a Mexican stand-off and there is the issue of Afghanistan, they make perfect ingredients for the army to take over.
The incumbent government is already on shaky legs. It does not have popular support. Both the sides have questioned state institutions in a way that they might lose legitimacy. Even though people have also questioned army’s conduct but when they cross the red mark, the army will rescue itself and perhaps take over.
The army has already put itself in diplomacy. General Bajwa recently held discussions with the US over the IMF deal. The opposition questioned the motive of the General. The army should leave economics to the civilian government and economists.
Pakistani politicians need to move beyond the current approach. As observed in the past, when the incumbent as well as the opposition lose legitimacy, the army gets leverage over the people. When people are fed up with political parties, they defect their support to the army. In these circumstances, it becomes easy for the army to take over.
The coming days will be crucial for democracy in Pakistan.
The UK Economy Braces for 2-Year Long Recession: What Went Wrong?
The UK economy is witnessing one of the worst crises in its history. The downfall of the pound, war-infused energy crisis, skyrocketing electricity bills, collapsing stock market, changing Prime ministers, and whatnot?
Nothing has gone in the UK’s favor since the passing of the Queen. And now the country is bracing for a prolonged two-year recession with contracting third quarters.
But what went wrong in the first place? How did this trigger an economic catastrophe in the UK? And can Rishi Sunak save the UK?
Here is a detailed explainer:
UK Economy: An Overview of the Problem
With the political upheaval and the pandemic, the already suffering economy of the UK reached its brim when the Russia-Ukraine war ignited.
In response to Ukraine’s invasion, Britain halted the import of fuel, gas, or coal from Russia since June for the first time in the past 25 years.
As a result, Russia stopped its critical gas pipeline to Europe, thus creating an energy crisis.
All this led to the UK’s economic downfall.
Today, inflation is at an all-time high of 9.9%, a 40-year high. Energy bills are shot up by almost 80%despite capping. Finally, and most importantly, the pound has become one of the worst-performing currencies, with its value dropping by 24% against the dollar.
The Mini Budget Turmoil
With such disruptive environments in the UK, former Prime Minister Liz Truss came up with the mini-budget. The mini-budget baskets a slew of tax changes, including the elimination of the high rate of income tax for the wealthy and the energy subsidies policy platform.
However, the mini-budget backfired and now has snowballed from an energy crisis into debt, housing, currency, and even a banking crisis.
The pointer mentioned in the mini-budget has been so terrifying that it shook the economy of the UK and plunged the London Stock Exchange horribly.
With such an unstable situation inside the UK economy, Truss changed her mind about company taxes after days of adamantly defending her budget and firing finance Minister Kwarteng.
“I still agree with my policies, but I’ve sacked my finance minister because he announced them, and the market didn’t like them.”She said
A Cold and Long Winters Awaits the UK
The three major events that make the incoming winter snug for the UK are:
- First, Russia has entirely cut off gas, which causes the cost of electricity to shoot up by almost 80%.
- Secondly, on top of the existing gas storage, the incoming winter energy consumption is about to hit a new peak from September to December.
- Third, even if Europe had 90% of its Energy storage complete in September 2022, it could take only 90 days for it to reach dangerously low levels.
Long story short, a gas shortage during a peak consumption time, with no storage option, will further increase energy prices. It has already been shot up at extreme levels resulting in high electricity bills that eventually heated inflation and the economy of the UK.
Even though the UK is receiving help from the US and other countries, gas prices are still very high. Hence the cost of production and inflation has hit a record 9.9%.
“It is going to be tough. But protecting the vulnerable – and people’s jobs, mortgages, and bills – will be at the front of our minds as we work to restore stability, confidence, and long-term growth,”British finance minister Jeremy Hunt twitted
Bond Market Crisis with Collapsing Pound
The UK’s property market, pension industry, and overall economy are at risk of recession. The reason behind this is the decline in the price of UK government bonds and the ensuing rise in interest rates.
10-year bond rates in the UK have gone above almost 300%, going from just about 1% to 4.11% in just nine months.
Even though the bonds yield a 4% interest, the currency has depreciated to such an extent that it has become a disaster for foreign investors. As a result, foreign investors are quitting the UK market, further decreasing the demand for the pound.
Such a crisis in the bond market resulted in currency depreciation further, and the sterling slid against the US dollar. Furthermore, during the Ukraine-Russia war, Russia cut off gas supplies, and oversized reliance on imports further surge Euro.
Rishi, the Third Prime Minister in Three Months
After the resignation of Boris Johnson with 27 ministers, the office was handed over to Liz Truss. When Boris left the office, there was a sensation in the UK that it was time for stability and competence.
However, due to poor politics and policies, Liz Truss abruptly resigned from the post of Prime Minister within 45 days. The shortest and most disastrous spell that slung the economy of the UK and crashed the pound forced Liz Truss to step down from the post.
With the resignation of Liz Truss, the reign was entrusted to Rishi Sunak, the third PM of the UK in the last three months. Sunak’s appointment ended another period of political unrest in the UK.
But many analysts and Westminster observers are still of the opinion that there will soon be another crisis. With the opposition Labor Party presently leading in the polls, all opposition parties are pleading for a general election.
Can Rishi Sunak Save UK Economy?
The political unpredictability has led the UK economy into a two-year-long recession. The previous two prime ministers were unqualified to steer the UK economy’s flimsy ship. Hence Rishi has some challenging tasks to do.
Now, everything will depend on how Rishi approaches the challenging work of rescuing the UK economy from disaster, and it will be interesting to watch how he advances.
Muslim Women’s Empowerment and Inheritance Rights
Despite Islam giving Muslim women the right to inheritance, it is rare to see Muslims follow this Islamic law. The recently released National Family Health Survey 2019-20 (NFHS-5) fact sheet for Jammu and Kashmir states that only 57.3% of women in the Union Territory of Jammu and Kashmir own a house and/or land, alone or jointly (PDF of the survey). J and K is a Muslim-majority region. According to 2011 census, 68.3% of the region’s population is Muslim.
Even though we can read these figures as “at least more than half women own property”, however, given that all women are coparceners in one or the other way, it raises vexing questions.
Islam entitles a sister to inherit half of what a brother gets as a coparcener. Despite this fact, the number of women owning property is almost half of that of men.
The data on women’s inheritance in Pakistan and other Muslim-majority South Asian countries is much worse. There are very few women who own property in South Asian countries.
Inheritance Rights, a Taboo?
Women asking for their coparcenary rights is considered taboo here. Further, women also seem to have internalized that asking for inheritance rights will break their relationship with other members of the family, especially brothers. As a result, they sign relinquishment deeds without giving a second thought about it.
Women’s Empowerment through Inheritance
People mostly see the inheritance of property as a matter of money and wealth. However, it goes beyond that, at least for women. Economically speaking, ownership of any kind of property by women is a very important determinant in the quest for women’s empowerment.
In a realist world where everyone is responsible for their own survival, women should not expect their male relatives to care for them. Unless women do not attach economical value to their lives, they will have no power. This is especially true for unemployed women who do not have financial independence. Since inheritance of property is a given- however small value it may have, they do not have to get an education or work to get it. The only thing they need to do is not to sign the relinquishment deed.
Also Read: Why Are Muslim Women Still Behind Bars
Militating Against Women’s Empowerment
Relinquishment of coparcenary rights militates against women’s empowerment. It is high time that women ask for the inheritance rights that the constitution as well as the religion gives them. The right to inheritance also seems one of its kind means to women’s empowerment where people peddling religiosity may not find a reason to oppose it. Women should know that signing a relinquishment deed may lose them a lifetime opportunity for leading an independent and respectful life in this patriarchal world.
Also Read: The women behind #Blacklivesmatter movement
The Debate on Equality of Rights
It is generally accepted that Islam entitles a sister to inherit half of what a brother gets as a coparcener. However, the interpretation of the Quran regarding this law is debatable. According to Mohmmad Iqbal, “the share of the daughter is determined not by any inferiority inherent in her, but in view of her economic opportunities, and the place she occupies in the social structure of which she is a part and parcel.” Iqbal goes on to justify the case of inheritance law in Islam arguing that the daughter “is held to be the full owner of the property given to her by both the father and the husband at the time of her marriage.” Further, “she absolutely owns her dower-money which may be prompt or deferred according to her own choice, and in lieu of which she can hold possession of the whole of her husband’s property till payment, the responsibility of maintaining her throughout her life is wholly thrown on the husband.”
Therefore, for Iqbal, if we “judge the working of the rule of inheritance from this point of view, you (we) will find that there is no material difference between the economic position of sons and daughters.”
However, Iqbal made this point in 1930. Since then, there has been a significant change in the economic positions of men and women. If the motive behind inheritance laws, as mentioned by Iqbal, is applied to modern-day conditions, sons and daughters may well get an equal share in inheritance.
Towards Muslim Women’s Empowerment
Inheritance rights bestowed by Islam on Muslim women show Islam’s inherent quest for women’s empowerment.
Even though the West blames Muslims for repressing women’s rights, Islam has its in-built laws for women’s empowerment. These laws, unlike West’s feminist rhetoric, go beyond symbolic empowerment like sartorial choice, and hence materially empower women.
However, it is a shame that Muslims do not follow Islamic laws like inheritance law in letter and spirit. If all Muslims obeyed these laws, the world would become a better place for Muslim women.
“The Worst is Yet to Come”— Recession 2023 & the Looming Uncertainty
Recession 2023 is just around the corner.
The global economic crises are now inducing the certainty of a looming recession. Economists and financial organizations warned of upcoming uncertainty; however, regrettably, the world failed to decode the uprising of the economic catastrophe.
Today’s economies around the globe are confronting an urgent economic crisis and is on the brink of a recession. And, the experts fear the worst is yet to come!
Shear Impact on Leading Economies – US, UK, China, and India
“Global growth is slowing sharply, with further slowing likely as more countries fall into recession. My deep concern is that these trends will persist, with long-lasting consequences devastating for people in emerging markets and developing economies,”World Bank Group President David Malpass.
For the first time since 2009, the US declared negative GDP growth two quarters in a row, which officially qualifies as a recession.
The British Pound is at its historic low of $1.038 against US dollars due to rare emergency interventions. Cities and states in China are still in lockdown because of a rise in Covid-19 cases. On the other hand, Indian Rupee is at its 75-year low of Rupees 82.11 against the US dollar, soaring the hike in repo rates to 5.90%.
Srilanka already declared insolvency earlier this year. Russia and Ukraine war had already set the stage for World War III. And the recent resilience of china on Taiwan has tarnished the world economic environment.
All these together indicate the harsh truth: Recession 2023 will worsens the conditions of all major economies and push the globe into undefined circumstances like:
- Central banks hiking the interest rates
- Hike in energy and food prices
- Depreciation of major currencies against the dollar
Central Banks Hiking the Interest Rates
To counteract rising inflation and the impact of a strong currency on the economies, central banks are hurriedly raising interest rates. This happens as the US Federal Reserve keeps up its aggressive interest rate hikes.
On the other hand Reserve Bank of India is also struggling with persistently high inflation, which is made worse by geopolitical unrest, droughts, and supply-chain disruptions.
Hike in Energy and Food Prices
Russia is the world’s third-largest oil-producing country. It provides 7-8 million barrels of crude oil per day, or 14% of global production, to international markets.
The US and UK’s restrictions and many other nations’ decisions to stop purchasing Russian petroleum have exacerbated the crisis.
Russia and Ukraine are the biggest sunflower oil producers globally and the second most frequently used cooking oil. However, sunflower oil cannot yet be exported from Russia due to the tightening of import restrictions.
Plus, due to the increasing demand for sunflower oil in the market, other edible oils are now more expensive, raising the cost of food and other products across borders.
Depreciation of Major Currencies Against the US Dollar
Compared to the US dollar, the Japanese yen has dropped to its lowest level since August 1998. The Indian rupee is hitting its lowest in history, and for the first time in 20 years, the euro is now lower than the USD.
The decline of major currencies indicates the current state of the global economy. Moreover, it provides a crystal-clear forecast of how disastrous the recession 2023 would be if significant steps are not taken to control the situation.
The Decelerating Global Economy: IMF Forecast for Recession 2023
The International Monetary Fund (IMF) is warning that over a third of the economy is headed for a recession this year or next. Its world outlook shows growth withering from 6.0% in 2021, 3.2% in 2022, and an estimate of just 2.7% in 2023.
Recession 2023 will be different from all the recessions the world has faced to date. Different factors are driving economic crashes in different countries, for example:
The ongoing turmoil in the national and global market is further sparking the threat of World War III.
Rising Certainty of World War III
Russia has already invaded Ukraine, and in opposition to Ukraine’s protection, the US cleared this support with Ukraine by immediately sending weapons to Ukraine. Such US behavior infuriated Russia, leading to increased attacks.
Russian President Vladimir Putin warned the US and European countries that further expansion of support to Ukraine might lead the situation to a ‘Global catastrophe.’
On the other hand, China assaulted Taiwan due to the recent visit of the US finance minister. The current clash of China and Indian troops erupt seriously, leading to grim conflict on north-east Indian borders.
Additionally, civil wars in countries like Somalia, Yemen, Syria, Ethiopia, Afghanistan, and Mali are raising the certainty of World War III.
Needless to say, World War III will destroy the world economy, resulting in more financial turmoil, starvation, a hike in oil prices, and the depreciation of currencies.
Recession 2023: The Worst is yet to come
Slowing down economies, high repo rates, depreciation of currencies, bankrupted countries, and looming wars between nuclear countries are further solidifying the onset of a cold economic winter.
The circumstance indicates what is coming. The indication of recession, the yell of “the worst is yet to come.“
However, to wrench the global situation on track, policymakers should continue to give needy powerful tailored assistance to respective governments while also putting in place reliable medium-term fiscal strategies.
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