From last four decades, Pakistan has been confronting terrorism, ethnicity, provincialism, corruption and other such demons giving birth to Socio-political and economic instability resultantly. All these are the factors having direct relation with the fluctuating economy of Pakistan. Unfortunately, this vexed condition has been further tarnished by the descending economies of Gulf States which are facing macabre and have indirect link with Pakistan economy.
What has happened with the economies of Gulf States?
Saudia and other Gulf States were having haughtiness just because of crude oil, they were exploring through their resources-rich lands and extricating in the global market for fiscal deals. From 1950 to 2014, they enjoyed velvety life styles utilizing only source of income that was crude oil without contemplating over any other investment.
As, Saudia and other Gulf States are prancing with system of monarch and Princes of those states were visualized making misuse of money without starching reserve assets for impending time. For exploring crude oil, heavy machineries were being manufactured in the oasis of Japan, Germany and America etc and here in the Gulf States were no such industries roosted by the Kings of states that’s why all those industries were captured by these rich lads as they required heavy machinery for delving oil wells. While those countries like America and its allies were the pointed consumers of petroleum from these states and in such state of affair, they were bound to the monopoly of these Gulf States because gubernators here rigged price of petroleum having control over OPEC ( Organization of the petroleum exporting countries).
Gulf States had made no concordat for the industrial sector as second source of income at then time but they were moving with contentment with the business of crude oil but their injunctions were insurmountable for others. To Energy Information Administration( EIA), America consumed 7.08 billion barrels of petroleum in a year with 19.04 million barrels per day and that’s why America was one the robust consumers of crude oil from Gulf States. To cope with the grandeur of princes and melting own fetters, America put a special coalition plan with its allies.
First, American invaded into Iraq, besmirched the government, exhibited a few gold coins to general masses and provoked them against the ruling elites. With the dismissal of Sadam government, America in consonance with local tough men took over the control of oil wells in Iraq and started shipping barrels at low rates to America. Prior to this contingency, America and its allies made head way of Sadam and sieged him for bamboozling Sabah Family, monarch of Kuwait. Sadam cowered his goal and Sabah family realizing the importance of America and its allies beseeched America and again clutched throne with the corroboration of United State. In this way, proxy control of Kuwait was in the hands of White House along with a Army Base in Qatar spreading over chiliad of acres from where decreed is construed and Gulf States are bewildered where King of Qatar is even not allowed to introspect into the installations of American base in the vicinity of Doha.
Similar allegory repeated with Qaddafi as contingency happened with Sabah family. By ousting him through various clauses, France and United Kingdom ushered their supervisions upon the state of Libya( An African muslim state saturated with natural resources ). Hitherto, United State which was above all in purchasing of petroleum has congregated oil more than its requirement through proxy-captured States and America now has emblem of self-dependent regarding its petroleum requirement.
On the contrary, Gulf States are facing steep day by day as they are not having other juncture of income than oil and White House is paying no heed for even a single barrel but economies of Gulf States were directly annexed with the price and sale of petroleum. End of 2013 was the period when peak price $170 per barrel was depicted but in lieu of escalating further, prices started moving towards deep which is $30 per barrel in running time( ever lowest in the history). Detriment of hovering price in the market is just because of America and its allies.
Now, Gulf States are confronting the stench of budget deficits and for maiden time after 1950, they are having such issues when reserve assets are being utilized by them. Officially announced by the personnel of Saudian monarch that $98 billions will be budget deficit of Saudia in running year but IMF( International monetary fund) has flabbergasted $140 billions as expected budget deficit of Saudia. Qatar being member of OPEC is facing $12.8 billions as budget deficit in 2016, first time in fifteen years. Same tumultuous story is prevailing with other Gulf States. In return, there’s no way out on the part of States except to introduce harsh economic reforms.
Gulf States after pondering the obsessions are planning for industrial development of States but Princes will have to face fraught and rife situations regarding accomplishment of their mission. Because they have never hectored for the nurturing of individual development along with no stride towards education. Inhabitants of these States have no knowhow about modern technologies, machinery and its usage that means for technical staff, foreigners will be pursued by them which is now beyond their pockets. Furthermore, residents of those States need long time to stipulate back towards hardwork because they have been moving with the benchmark of rummy ambience.
Stricture of these States are going to imprint simulacrum in the form of VAT ( Value Added Tax) upon the consumer goods and salaries of workers. Kuwait in this row has implemented VAT while others are watching through spectacles over its implication. Lingering behind such types of implications, Saudian monarch has doused its vision 2030. In which Saudian mandarins are focusing over development at gross-root level, construction of various sources of income other than crude oil with escalation in the percentage of Umrah visitors and a slew of more.
Above is the vision of 2030 but now, plaudit of extension in laborers’ visas is being rejected. Actually, a number of workers is being downsized and compelling them to fly back their homes. Almost 2 millions Pakistanis are there in the terrain of Saudia while more than 3.5 millions are apprehending immunities in the shelters of Gulf States. Workers are being evacuated from different cliques of less profit-earner companies.
Pakistani economy which was already in the state of acerbities, is further facing interregnums with arrival of those workers from Gulf States. No doubt, petroleum prices have been mitigated from Rs.125 per liter to Rs.70 per liter with fall of petroleum prices in International market but this advantage didn’t instill as far as general public is concerned because daily used commodities are being unleashed at same prices. This bounty has only been clutched by transporters and by upper class elites having luxurious vehicles.
In fact, Pakistan is frowning after visualizing the aftermaths of this stride in shape of lowering prices in International market because overseas Pakistanis who were bric-a-brac source of foreign remittances( in 2014-15 was $18.4bn) are approaching homes and unemployment will definitely touch apex once again. Major portion of export bill was met-out by the workers of Gulf States. All these bruises fabricate direct relation of economies of Gulf States with Pakistan.
Need of hour is that government should constitute special methodology with vindication of economic policymakers by taking into confidence the opposition factions to cope with this upcoming economic crisis. At the same time, the fascists should have to guide the Government in this condition as well instead of enjoying deep sleep.