Pakistan is on the verge of default. Inflation is galloping and the 231 million Pakistanis already regret not having bitcoins.
From coup to default
Pakistan is about to suffer the same fate as Lebanon. Hyperinflation threatens following the devastating floods whose damage amounts to more than 30 billion dollars.
This climatic disaster adds to the political crisis resulting from the dismissal of the very popular Imran Khan. The former Prime Minister accuses the United States of fomenting an institutional coup because of its good relations with Moscow.
Mr. Khan is also guilty of forging mutually beneficial relations with India and China. And probably also to have consolidated the peace process in its Afghan neighbor while bringing the country’s foreign exchange reserves to nearly 25 billion dollars.
Indeed, Washington needs to maintain the most chaos to maintain its empire. Divide and conquer is the spearhead of American foreign policy.
As a result, one year after the coup, the country’s foreign exchange reserves are no more than 3 billion dollars. Pakistan even stands out by being one of the rare countries of the South to supply ammunition to Ukraine…
monster inflation
The Pakistani government is in debt to the tune of 126 billions of dollars abroad. And almost as much (31,000 billion rupees) from its domestic creditors.
Speaking at the academic ceremony in Sialkot last Saturday, powerful Defense Minister Khawaja Asif said declared : “You may have heard that Pakistan is bankrupt or a default or collapse is happening. It’s already the case. We live in a bankrupt country”.
Economist Murtaza Syed has said things bluntly in the newspaper The news:
“Over the next five years, Pakistan will have to repay $25 billion a year to foreign creditors. It will also need at least $10 billion to finance its current account deficit, bringing total external financing needs to $35 billion a year by 2027. And we have reserves of changes by just $3 billion. »
The government will therefore have to devote the equivalent of 5% of GDP each year to servicing its debt. Problem, total tax levies represent only 10% of GDP. In other words, the government must immediately cut its spending in half…
He won’t. We are heading for a headlong rush of indebtedness. Knowing that annual inflation has already reached 27% (officially…). Food prices are up by more than 40%, even 65% according to some more reliable sources.
China targeted through Pakistan?
The other solution would be to default. But from whom? Approximately 30 % of Pakistan’s external debt is owed to China. Between July 2021 and March 2022, more than 80% of Pakistan’s bilateral debt service went to Beijing, reports Bloomberg.
Pakistan is indeed on the route of the pharaonic “Belt and Road” project. China has invested heavily in the land of the pure. The Middle Kingdom is therefore in the front line in the event of default.
The major project (China-Pakistan Economic Corridor, CPEC) is to link the Xinjiang region to the deep-water port of Gwadar, via the Karakorum road. The project will allow China to bypass the Strait of Malacca by creating access to the Arabian Sea. But also to lay the foundations for the construction of a gas pipeline joining Iran.
In short, Islamabad risks making headlines in the press over the next few months. And yet again, millions of people are going to be shorn to death over yet another fiat currency meltdown.
Bitcoin is an extremely liquid store of value to protect against currency meltdowns.
Unfortunately, it is too late when the collapse occurs. The collapse of foreign exchange reserves means that local exchanges can no longer buy bitcoins abroad.
Hence the interest that BTC miners set up in all countries. Especially where debt levels and inflation rates raise fears for the worst in these troubled times.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
