Running out of juice.

Emerging economies hoping to grow their way into the ranks of the developed have faced a seemingly never: ending series of setbacks in recent years-Pakistan has been no exception: Trade tensions, a pandemic, supply: chain snarls, inflation and war (closer to home and as far as Eastern Europe) have together dealt serious blows to the economy. The devastation to the developing world has been collected in that over the past three years more than half of its population has lived with income growth, in purchasing: power terms, less than one: third of that in the US-the first such episode since the 1980s. In the case of Pakistan, the IMF economic forecast not so long ago marked that economic output will expand by more than 5 percent annually, and seems to have been marked down significantly to almost around 1 percent or perhaps even lower. As the contours of the post: pandemic landscape start to come into focus, a lost decade for Pakistan-a period of slow growth, recurring financial crises and social unrest-looks increasingly plausible.

Financial pressures pose the most acute threat. In the early 1980s, the Federal Reserve raised interest rates dramatically as it sought to tame inflation. For developing countries that had borrowed in the preceding years, the ensuing tightening in financial conditions and strengthening of the dollar against their respective currencies became too much to bear and waves of debt and banking crises followed-history to seems to be repeating itself today here in Pakistan. Our external debt has ballooned beyond $130 billion (not accounting for contingent liabilities), the currency has almost halved in so many months and the exorbitant domestic has not only crowded out the private sector but also has eaten away all fiscal space for any kind of development spending, as the debt servicing figure reach a colossal PKR 4 trillion.

Naturally, inflation is rampant (clocking 46 percent last week), and business and industry are in tatters leading to fast: rising unemployment and poverty. In addition, as we witness higher interest rates in the US (just as in the 80s), markets are heaping their own pressure on the Pakistani economy. Capital is flowing out to take advantage of higher returns and safer capital values abroad, resulting in an eroded stock market and an absence of any meaningful FDI. From the look of things, unless there are some dramatic changes or some gross largesse from supposed friends, we may probably have to...