Debt-ridden Pakistan government asks its people to drink less tea
Pakistan has asked its citizens to drink less tea in order to keep the country's economy afloat. Pakistan is the world's largest tea importer and it is currently dealing with rising inflation. On Tuesday, Pakistan's Minister of Planning and Development, Ahsan Iqbal, said people should cut their daily tea consumption by "one or two cups" since imports are putting the country's finances under strain.
Why does this story matter?
State Bank of Pakistan's latest debt bulletin says that the overall debt and liabilities of Pakistan have risen to over PKR 53.5 trillion, an increase of approximately PKR 23.7 trillion. Farrukh Saleem, Pakistan's senior economist, stated that when Imran Khan took power in 2018, the country's national debt and liabilities stood at PKR 30,000 billion and by 2022, it increased to PKR 51,000 billion.
What did the Pakistani minister say?
"The tea we import is imported by taking a loan," Iqbal explained, talking about the government's appeal. Besides, he also urged businesses to close early in order to preserve energy. Notably, Pakistan, with a population of 220 million people, is the world's top tea importer, spending more than $640 million on tea in 2020, according to the Observatory of Economic Complexity.
Pakistan dealing with severe economic crisis for long
Pakistan has been in an economic crisis for a long time, and now inflation has reached an all-time high. On the other hand, foreign exchange reserves are steadily declining. In February, its central bank held $16.3 billion in foreign exchange, which had dropped to $10 billion in May. Due to the economic crisis, Pakistan halted importing non-essential and luxury goods last month.
Economic crisis also responsible for Imran Khan's ouster
The economic crisis was also a factor in the ouster of Pakistan's former Prime Minister Khan. Khan was also accused of bad financial management by the current PM Shehbaz Sharif. It is now Sharif's challenge to rebuild the economy. Sharif was sworn in as the prime minister on April 11, following the fall of Khan's government after a no-confidence motion.
Jokes flying on social media about tea advice
This appeal of the Pakistani government regarding lowering tea consumption is being mocked on social media. Many users have posted that reducing the drinking of tea will not improve the economic condition of the country.
Some corrective steps taken by the government
In May, Pakistan abolished a petrol price restriction at the end of the month. It was a need for a long-stalled bailout package with the International Monetary Fund (IMF) to proceed. The administration also proposed a new $47 billion budget for 2022-23 last week. It has been persuading the IMF to renew the $6 billion bailout agreement reached by both parties in 2019.
