Feb 27, 2009

Into a nosedive

Just as there was some hope that the Karachi stock market could be finally recovering from the turmoil it faced all through the previous year, the latest crisis has caused it to plunge downwards more than five per cent on Feb 25 immediately after the Supreme Court disqualified the Sharif brothers in an eligibility case. The nosedive continued into Thursday. Already, the KSE 100-share Index has depreciated by 5.01 per cent or 294.05 points – the steepest downfall ever experienced in a single session over the past year.This augurs badly for the economy. In Punjab, land prices, which had fallen in recent months, had recently risen slightly. These are now likely to fall once more. It is even more unlikely that investors will be willing to come into the country. This marks a disaster for a country desperately struggling to keep its head above water as a flood of economic troubles threatens to overtake it. The dangers of this situation have also been pointed to recently in the US, where Democratic Senator John Kerry and former Republican Senator Chuck Hagel have said in a new report that Pakistan desperately needs dollars 4-5 billion in aid to prevent it from spiralling towards economic meltdown and complete chaos. It is in this situation rather ironic that leaders who have played a part in the current crisis apparently thought nothing of their country when making decisions. Punjab, as the largest, and most prosperous province, is obviously crucial as far as its economy goes. The situation there will obviously discourage those who had plans to set up businesses or industries in it. It must also be noted that in Lahore and other cities, the Sharifs enjoy the overwhelming support of traders and the business community. The action against them will thus not go down well amongst sectors crucial to economic growth. At present, KSE dealers are distraught. The market is once more in turmoil. We do not know how much more damage it can sustain. The consequences of the current round of unrest are grave for our country, which is already caught in an economic crisis that has had an adverse impact on the lives of citizens everywhere.

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