# *Detailed SUMMARY of the article "State of the economy" by Sakib Sherani, Published in Dawn on June 12th, 2025:* The article analyzes *Pakistan*'s economic crisis, highlighting that since *1988*, the country has entered *14 IMF programmes*, each achieving temporary *stabilization* but at enormous *human cost*. The current *IMF programme* is described as the *harshest in Pakistan's history*, demanding unprecedented *fiscal austerity* that has caused *economic devastation* and *impoverishment*. According to the *7th Population and Housing Census-2023*, over *18 million Pakistanis* are officially *unemployed*, with a *jobless rate* of *22%* and *youth unemployment* hitting *29%*. This represents a dramatic increase from the *Labour Force Survey 2020-21*, which recorded only *6.3%* unemployment (*4.5 million* people). The *World Bank* reports that nearly *45%* of the population now lives below the *economic waterline* of *$4.2/day*, with an additional *12.8 million Pakistanis* pushed into *poverty* since *2022*, totaling over *107 million citizens*. *Real GDP growth* has averaged only *1.7%* since *2022-23*, the *lowest three-year average* since *1952* and below *population growth rate*. All major economic sectors have suffered: *Agriculture* posted major *crop declines*, *Manufacturing* contracted over *10%* cumulatively since *2022-23*, and *Services* grew at two-thirds its long-run average. The *purchasing power* of average *Pakistanis* has declined by *58%* since *March 2022*, meaning someone earning *Rs50,000* then now has purchasing power of just *Rs20,833*. The article criticizes the *IMF*'s *anti-growth* and *anti-people austerity policies*, comparing them to *Greece's devastation* since *2010*. It explains the disconnect between official celebration and public suffering through *institutional incentives* where *IMF mission chiefs* avoid *failed programmes* for career reasons, and the *IMF* portrays countries as ready for *capital flows* resumption. The author suggests *Western-aligned ruling elites* benefit from *IFI support* while *ordinary Pakistanis* face *austerity*. With *one in two Pakistanis* below the *poverty line* and *one in four unemployed*, the article concludes that *Pakistan's economy* has never been as *dismal* as in the past *three years*. # *Easy/Short SUMMARY*: *Pakistan* has been in *14 IMF programmes* since *1988*, with the current being the *harshest* ever. *18 million Pakistanis* are *unemployed* (*22%* rate), *45%* live below *$4.2/day*, and *purchasing power* dropped *58%* since *2022*. *GDP growth* averaged only *1.7%* since *2022-23*, the *lowest* since *1952*. All sectors suffered: *Agriculture* declined, *Manufacturing* contracted *10%*, and *Services* slowed. The *IMF*'s *austerity policies* caused *economic devastation* while officials celebrate *stabilization*. *107 million citizens* are in *poverty*, making this the *worst economic crisis* in *Pakistan's history*. # *SOLUTIONS of The Problem*: ## *1. Diversify Economic Base* Reduce dependence on *IMF programmes* by developing *export-oriented industries* and *value-added manufacturing*. ## *2. Create Employment Programs* Launch *youth employment schemes* and *skills development programs* to address *29% youth unemployment*. ## *3. Agricultural Reforms* Implement *modern farming techniques*, *irrigation systems*, and *crop diversification* to boost *farm incomes*. ## *4. Industrial Revival* Provide *subsidized credit* and *tax incentives* to revive *manufacturing sector* and prevent *factory closures*. ## *5. Social Safety Nets* Expand *poverty alleviation programs* and *cash transfers* for the *107 million* below poverty line. ## *6. Fiscal Policy Reform* Balance *austerity measures* with *growth-oriented policies* to avoid *economic devastation*. ## *7. Alternative Financing* Explore *bilateral agreements*, *Islamic financing*, and *regional cooperation* to reduce *IMF dependence*. ## *8. Purchasing Power Protection* Implement *wage indexation* and *price controls* on essential goods to protect *middle-class* incomes. ## *9. Rural Development* Focus on *rural infrastructure* and *agricultural value chains* to address *50% rural poverty*. ## *10. Economic Governance* Strengthen *economic institutions* and *long-term planning* to break the cycle of *IMF programmes*. # *IMPORTANT Facts and Figures Given in the article*: - *Pakistan* has been in *14 IMF programmes* since *1988*. - Current *IMF programme* is the *harshest* in *Pakistan's history*. - *18 million Pakistanis* are officially *unemployed* (*22%* rate). - *Youth unemployment* hit *29%* (all-time high). - *6.3%* unemployment in *2020-21* (*4.5 million* people). - *45%* of population below *$4.2/day* economic waterline. - *12.8 million* additional *Pakistanis* pushed into *poverty* since *2022*. - Over *107 million citizens* in *poverty*. - *Real GDP growth* averaged *1.7%* since *2022-23*. - *Lowest three-year average* growth since *1952*. - *Manufacturing* contracted over *10%* since *2022-23*. - *Services* grew at two-thirds long-run average. - *50%* poverty rate in *rural areas*. - *58%* decline in *purchasing power* since *March 2022*. - *Rs50,000* in *March 2022* equals *Rs20,833* purchasing power now. # *IMPORTANT Facts and Figures out of the article*: - *Pakistan's GDP* was *$348 billion* in *2023* (*World Bank*). - *Pakistan* ranks *92nd* in *Global Hunger Index* (*GHI 2024*). - *Inflation* peaked at *38%* in *May 2023* (*PBS*, 2023). - *Pakistan's debt-to-GDP* ratio is *89%* (*IMF*, 2024). - *Remittances* contribute *8.6%* to *GDP* (*SBP*, 2024). - *Agriculture* employs *42%* of labor force (*FAO*, 2024). - *Pakistan* has *4th largest* workforce globally (*ILO*, 2024). # *MCQs from the Article*: ### 1. *How many IMF programmes has Pakistan been in since 1988?* A. 12 *B. 14* C. 16 D. 18 ### 2. *What is the current unemployment rate in Pakistan according to the 2023 census?* A. 18% B. 20% *C. 22%* D. 25% ### 3. *What percentage of Pakistanis live below the $4.2/day economic waterline?* A. 40% B. 42% *C. 45%* D. 48% ### 4. *By what percentage has purchasing power declined since March 2022?* A. 50% B. 55% *C. 58%* D. 60% ### 5. *What was the average real GDP growth since 2022-23?* A. 1.5% *B. 1.7%* C. 2.0% D. 2.2% # *VOCABULARY*: 1. *Stabilisation* (استحکام) – Process of making something stable or steady 2. *Austerity* (کفایت شعاری) – Strict economic policies to reduce spending 3. *Devastation* (تباہی) – Severe destruction or damage 4. *Impoverishment* (غربت) – Making someone poor or reducing wealth 5. *Unprecedented* (بے مثال) – Never done or known before 6. *Waterline* (پانی کی لکیر) – Economic threshold or poverty line 7. *Faltering* (لڑکھڑانا) – Becoming weaker or less effective 8. *Sputtered* (ہکلانا) – Working irregularly or ineffectively 9. *Cumulatively* (مجموعی طور پر) – Increasing by successive additions 10. *Decimation* (تباہی) – Killing or destroying a large proportion 11. *Hallmarks* (نشانیاں) – Distinctive characteristics or features 12. *Gushing* (جوش سے بھرا) – Excessively enthusiastic or emotional 13. *Endorsement* (تائید) – Official approval or support 14. *Condoning* (نظرانداز کرنا) – Accepting or allowing unacceptable behavior 15. *Performative* (نمائشی) – Done for show rather than genuine effect 16. *Amplify* (بڑھانا) – Make something louder or more intense 17. *Charitable* (فیاضانہ) – Generous or lenient in judgment 18. *Sinister* (شیطانی) – Threatening or suggesting evil 19. *Re-stratification* (دوبارہ تبقہ بندی) – Creating new social or economic layers 20. *Profligate* (فضول خرچ) – Recklessly extravagant or wasteful 📢 *Attention Please!* We appreciate your commitment to acquiring knowledge through our summaries. Please be reminded not to remove the attribution label affixed to this article. It is crucial to acknowledge the source and the effort invested in creating this summary. We discourage any unauthorized distribution without proper credit. Thank you for your understanding and cooperation. 🔍 ⚡ *Explore More Summaries, Solutions, and Vocabulary Meanings* 💡 Join our WhatsApp Channel for timely and comprehensive summaries of the latest articles, along with well-crafted solutions and helpful vocabulary meanings. Click the link below to join now 🔗 [Dawn Article Summaries](https://cssmcqs.com/dawn-editorials-articles-summary-for-students-pdf-download/) *WhatsApp Channel Link*: [https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y](https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y) --- *www.dawn.com* *State of the economy* *Sakib Sherani* *6–8 minutes* SINCE 1988, Pakistan has been in 14 IMF programmes. On each occasion, without fail, the economy has achieved stabilisation similar to what it is experiencing currently. Each time, the government of the day has launched into a song and dance to celebrate an invariably short-lived achievement. More importantly, one that has come at great human cost. This time is different, however. Not because the incumbent government has embarked on a path of serious reform that will break the country free from its continual dependence on the IMF. But because the current IMF programme is the harshest in Pakistan's history, demanding a level of fiscal austerity that has exacted an un­­precedented toll of economic devastation, misery and impoverishment. Ordinary Pakista­nis have paid a very heavy price for the stabilisation the government is celebrating. And there is no place for their suffering in the official narrative. A deadly combination of declining real incomes with rising unemployment and poverty, has meant that ordinary Pakistanis are in economic distress as never before. According to the government's own statistics, from the recently published 7th Population and Housing Census-2023, over 18 million Pakistanis are now officially unemployed, with the jobless rate at an unheard of 22 per cent. Youth unemployment has hit an all-time high of 29pc. Though not strictly comparable, the corresponding figure from the Labour Force Survey 2020-21, was 6.3pc — or 4.5m unemployed Pakistanis recorded two years prior to the digital census. This points to a steep increase in unemployment in a short span of time. Beyond the official hype, the economic reality of ordinary Pakistanis is dire. Not surprisingly, given the widespread joblessness, the latest poverty statistics are equally alarming. According to the World Bank, nearly 45pc of the population is now below the economic waterline, of $4.2/day. Using a lower international poverty line (of $3.65/day based on 2017 PPP), an additional 12.8m Pakistanis have been pushed into poverty since 2022, for a total of over 107m citizens. As in the case of unemployment, this is very likely the sharpest increa­­se over a two-year period in Pakistan's history. Placed in the context of faltering economic growth and an unprecedented loss in purchasing power for the average Pakistani since 2022, the foregoing statistics, however shocking on their own, are likely understating the true scale of economic misery being experienced by the masses. Real GDP growth has averaged only 1.7pc since 2022-23, the lowest three-year average growth ever recorded since 1952 — and well below the population growth rate. All the main growth engines of prosperity in the economy have sputtered since 2023. Agriculture has performed poorly, with major crops posting one of the largest declines ever recorded. The Manufacturing sector has contracted over 10pc cumulatively since 2022-23. The Services sector has grown at two-thirds its long-run average rate of growth. No economic sector or population segment has been spared. Farm incomes have collapsed, leading to a poverty rate of 50pc in rural areas, according to the World Bank. Countless factory workers are now jobless, while middle class households across Pakistan struggle to make ends meet. Since March 2022, the purchasing power of an average Pakistani has declined by 58pc. This means anyone earning Rs50,000 per month in March 2022, now has a purchasing power of just Rs20,833. None of this should be surprising given the nature of the IMF programme. Widespread factory closures and industrial job losses, devastation of the farm sector, and the decimation of the middle class are the hallmarks of the Fund's anti-growth and anti-people austerity policies. The social devastation visited upon Greece since 2010 is a glaring example. As I have previously written, despite the emphasis on social safety nets, the IMF gets the burden of adjustment of its programmes so tragically wrong. How then can one explain the wide disconnect between the harsh daily struggles of ordinary Pakistanis set against official celebration of macroeconomic stabilisation? And the supportive, and sometimes embarrassingly gushing, endorsement from the IFIs? It is useful to remember that Pakistan has received similar endorsements from the IMF and World Bank, the sovereign credit rating agencies and the likes of Barron's, multiple times in the past. In each case, there is a combination of a particular set of incentives or a narrow point of view at work. In the case of the IMF especially, there are professional as well as institutional incentives at work that can lead to over-hyping results of a programme, or condoning lapses. IMF mission chiefs and their management have every incentive to avoid a failed programme as it can be career-limiting. To do so, they can indulge in playing up programme successes, or pursue performative reforms to notch marginal wins to amplify the 'success-factor' of the programme under their watch. The institutional incentive for the IMF is to portray, as quickly as possible, both to the financial markets as well as to bilateral donors, that a programme country under its watch is now eligible for a resumption of capital flows. This also plays out via the fairly charitable and 'behind the curve' debt sustainability assessments the Fund produces. To left-leaning critics of the Bretton Woods Institutions, there is a hidden, more sinister dynamic at play. Support from the West in terms of access to funding from the IFIs, and the subsequent endorsements from the BWIs, are part of a system-legitimising re-stratification effort to consolidate the hold of Western-aligned ruling elites on power. In Pakistan's case, this plays out as timely and generous financial assistance, spinning a helpful narrative, facilitating political largesse and profligate spending in the budget for the past over two years while imposing austerity policies on ordinary Pakistanis. The IMF has much to answer for. With one in two Pakistanis now below the poverty line, and nearly one in four unemployed, the state of Pakistan's economy has never been as dismal and worrisome as over the past three years. This is the human cost of the stabilisation the government and the IMF are celebrating — and sadly, glossing over. The writer has been a member of several past economic advisory councils under different prime ministers. Published in Dawn, June 12th, 2025