Pakistan is running low on cash reserves because of high oil prices and political instability.
Fort Worth, TX (WiredPRNews.com)—High fuel prices, corruption allegations against new president Asif Ali Zardari and inflation have lowered Pakistan’s reserve of cash to somewhere between eight and three billion dollars.
According to an October 6, 2008 Telegraph.co.uk article by Isambard Wilkinson, the South Asian nation only has enough money to purchase 30 days worth of food and oil. Part of the problem is a 25% rate of inflation and the 21% drop in the value of the Pakistan rupee, according to the article. In addition, lawless instability in the Northwestern tribal areas of has added to the unease over the nation’s economy.
After the August resignation of General Pervez Musharraf as Pakistan’s president, Asif Ali Zardari—the husband of slain former president Benazir Bhutto—took over and has since faced accusations of corruption connected to the rule of his late wife, according to the article. While the allegations have not proven to be true, according to the article, the nation’s economy is in turmoil.
Friendly nations, like Saudi Arabia, are declining to make acceptable loans to Pakistan as it struggles to pay its bills, according to the Telegraph article. To make matters worse, the nation’s credit rating is just a few spots above default. Standard and Poor, according to the article, rates Pakistan’s credit at ‘CCC+.’
A November meeting between Zardari and representatives of other nations in Abu Dhabi may yield an international bailout, according to the article, which may have a price tag of $100 billion.