Page 51 - CMA Journal (Mar-Apr 2026)

Forty- ve percent of Pakistan's population lives below the On the diplomatic
poverty line. It means that almost half of the inhabitants are side, Pakistan has
living on a maximum of four dollars a day. This level of already offered a
suffering is not by accident, but it is a man-made situation mediator role on the
with institutional incompetence, callousness, inconsistent US-Iran war and has
policies, deliberate policy shifts, poor governance and above since been acting as a
all rampant inbuilt corruption. The total debt of Rs. 81 trillion messenger between
speaks of an unending ordeal for the people. The crises being the US and Iran on a
faced by the nation are man-made and can only be xed with 15-point US plan
proper actions by those in power rather than rhetoric or aimed at hosting talks
b e t w e e n t h e m .
chance. Instead of a steadfast resilient approach, the
leadership always resorted to the simple and comfortable Pakistan in view of its
strategic location and Syed Shamim Ahmed, FCMA
approach of borrowing more and more, while the corridors
close relations with the Former General Manager Finance
of power were still waiting for $1.2 billion from the IMF, fuel
Middle East, together Karachi Port Trust (KPT)
was added to the re by the Iran-Israel con ict in February
with the US, is seen as
2026 when the USA and Israel attacked Iran. Although
an opportunity to a peaceful settlement.
Pakistan is not directly involved in this war, yet being an
import-based economy, especially oil where 80 percent of Geopolitical Jolts
total oil requirements are met through imports, resulting in
rising price increases across every sector. For long, Pakistan has been facing serious security issues
with Afghanistan and was constrained to protect itself
Things are deteriorating fast with every passing day. Debt through war. Then came the US–Iran war during end
servicing has reached over 46 percent of the federal budget February 2026 causing a heavy shock on the already ailing
during FY-2025, amounting to Rs. 8.2 trillion. Debt by itself is economy through an increase in the prices of oil and gas
not a curse in absolute terms but it is the usage which makes causing the entire economic activities to suffer. It has to face
it a pain or blessing. Loans are investments when put into many economic challenges, due to oil and gas supply
development projects but become an expense when used disruption, causing petrol price increase and gas shortage.
for budget de cits. Every rupee of borrowings is an expense. The rise in petrol prices and the blockade of water passages
have already caused possible rationing and work from home
The US–Iran war has further aggravated the chaotic and short supply of oil may affect FDI in ows and reduce
situation. The spillover repercussions drew Pakistan into the remittances due to low economic activity as various
effects of the war especially in the import of oil and supply countries are directly or indirectly affected by the war. The
chain. The most affected area is oil and gas (80% imported) closure of Strait of Hormuz has disrupted global oil supplies,
due to rising crude oil prices and blockage of water passages, causing Brent crude oil to rise to $120 a barrel, with further
especially for oil tankers, causing severe negative multiplier increases still expected. This would adversely affect the
effects. During March 2026, petrol prices increased from Rs. economy and slow down growth in Pakistan.
266 per litre to Rs. 378 per litre and diesel from Rs. 281 to Rs.
Diplomatic Front
520 per litre, later reduced by Rs. 135 per litre, bringing the
price of diesel to Rs. 385 per litre, causing a big increase in After defeating India in the military confrontation involving
prices for every product. On the other hand, Pakistan is faced air strikes in May 2025, Pakistan proved its superiority over
with hostility at its western border with Afghanistan where India which was recognized internationally. This played a
security issues are lingering on resulting in open war. signi cant role in improving Pakistan's image. It gained a

ICMA’s Chartered Management Accountant, Mar-Apr 2026 49