As American Dollar governs today’s capitalist markets, every Pakistani Government should focus on how to reduce the worth of Dollars against the Pakistani rupee. Fluctuations in an open market are normal. The overall trend is for the rupee to gain against the dollar these days. The question is why has the Pakistani rupee been appreciating against the dollar in recent times?

When Dollar went down during the past couple of months, the cost of living still depended on PKR. The import bill did improve though. The real question a month ago was whether should the prices ever go down when the dollar loses its value against the rupee. If $ goes higher, even if you are earning more in numbers you have to pay more due to increased inflation.

Well for the first, US election uncertainty was the reason PKR gain some strength. The world knows the Pak economy is driving in the opposite direction if we compare it to other countries in the region. The lower and middle-class people in Pakistan are the worst sufferers of increasing inflation. Govt claims that the Sugar price is 80 PKR per KG while on the other hand there is 110 per KG in my home town. Besides, there is no sugar available in utility stores.

How did Bangladesh Takka become more Economically Stable?

The State Bank of Pakistan raised its benchmark interest rate to 12.25 percent in an attempt to curb rising inflation amid a weak rupee and an elevated fiscal deficit. And with the present finance bill, all the government on the behest of the IMF has done has pushed the economy towards further cash transactions and hindered formalizing the economy. The interest rate in Pakistan was at a record low of 5.75 percent in May of 2016. This is why businesses flourished in the last 4-5 years and investments were being done creating new opportunities for Pakistan.

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An estimate of M0, M1, M2, and M3 Money in Pakistan

As a general rule of thumb every 7% increase in the inflation rate doubles the total amount of money in existence every 10 years. At 14% it would be 4x the original amount in 10 years. KIBOR went up from 5.75% (a record low in the history of Pakistan) in May 2016 to 12.25% as of today. More than double the increase in the last two years. The way I see it is that the Government is trying to incentivize people to hold their reserves in the banks or in bonds instead of in gold or other solid assets etc. On one hand, this is not good for the industrial sector and companies since their stocks will tank as people sell stocks and buy bonds, etc but on the other hand, the government wants to strengthen the rupee since the current inflation rate of 8.25% can still devalue the currency and lead to hyperinflation if not handled properly.

Today:

1 USD = 89.55 Bangladeshi Taka
1 USD ~ 198.87 Pakistani rupee

Why? Because we could not do three things the right way much as Bangladesh did:

1) Bangladesh got rid of the Army

For Bangladesh Takka to grow, the two biggest earners were textile and money sent back by the ex-pat workers. Even our countrymen set their Textiles in Bangladesh owing to law and order. The men in Saudia and the Middle East have been replaced by Bengalis with the same positive non-violent image they portrayed to the world. BD neither has any fertile political landscape nor do they face existential threats owing to their location. There was no interference/distraction etc by any other country and India looked after it in how the country is run. Bangladesh shares land borders with India and Myanmar only, former has successfully turned Bangladesh into its satellite state.

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Bangladesh doesn’t have enemies but Pakistan has

The reality is they are an ally of Shining India and that’s what is boosting them. In our case, we are struck by terror. Pakistan has four neighbors, it is a conduit to western strategic interests in Asia (Iran, Afghanistan, India, China, and Russia). Both good and bad, this allows for the role of CPEC in motivating our economy. A lot of Pakistanis will be playing straw man on this. But this should not mean not having an army or if that it’s not important. Without our armed forces, we would be Iraq, Syria, Afghanistan, Libya, etc. At the same time, we’ve essentially been under military rule for most of our history. That’s why the money led as a coalition support firm during Musharraf’s regime is seen cited as a positive indicator of a dictatorial rule. Even now we have a puppet government controlled by the army.

It is normal to see Bangladesh grow. They didn’t “create” industries. Most of them are foreign investments. But it’s not a big deal when a country is fighting a war against terrorism and Actual terrorists, unlike the west. It is normal to see the economy suffer.

Bangladesh is an Autocratic Party State

Despite the current setup being autocratic, they have a stronghold on the institutions. The leading party in Bangladesh got rid of all opposition, media is not free at all, imports are very tight and only for essentials generally, and remitting money out is very very tightly controlled. According to HRW,

An independent and impartial commission should investigate the serious allegations of abuses in the Bangladesh elections” in which the ruling party won 288 of the 298 seats!

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The main opponent Khalida Zia was sentenced to a decade in prison on corruption charges. She was twice elected as PM of Bangladesh. She is the wife of former military chief, dictator, and President General Ziaur Rahman who allegedly conspired to assassinate Sheikh Mujib and his entire family less than two daughters (one of them is incumbent PM). That meant putting the Army on the leash.

2) Bangladesh Constitutionally declared itself as a Secular State

I really fail to fathom how can this magic secularism really solve our problems. Bangladesh can go to hell for that, but they do have a non-confused position. The constitution of the people’s republic of Bangladesh, Article 2A “The State Religion” states:

The state religion of the Republic is Islam, but the State shall ensure equal status and equal rights in the practice of the Hindu, Buddhist, Christian, and other religions.

Let’s start worrying about our country and the problem it faces. I think the main reason is super corrupt and malicious politicians and cronies using religion as a playing card. Pakistan needs to leave the kidney that it is still a security state or a garrison state. Bangladesh was one when it began but they have grown up. Once Pakistan realizes the biggest threat to its existence is not India but religious extremism which shapes foreign interest in doing business then they might start moving forward. If being secular would help save Pakistan then be my guest and do it. But changing philosophical points of view won’t help if your workforce is still filled with corrupt individuals working for their own agenda. Bangladesh has executed the corrupt. Because of a vision.

3) Bangladesh Educated the Women of the Nation

Bangladesh leveraged/ exploited its Least Developed Nation status to get multiple benefits like access to textiles/ RMG sector and funding. The NGOs specially BRAC and others helped really educate women and get them into work, population control, and poverty alleviation. Women are becoming part of the gig economy. Following suit with Bangladeshi freelancers on Fiverr, Upwork, and where not.

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