Is Pakistan becoming Sri Lanka? Locals experience food crisis, hoard LPG gas cylinders

Pakistan is reeling from the worst economic crisis as the country is facing a severe shortage of foreign exchange reserves. Pakistan's exchange reserves have declined by US$6.7 billion. Meanwhile, China has also reduced its investment in the country. The country's politics is also in shambles which has taken a toll on the economy.

Recently, Pakistan's government has ordered all malls and markets to close by 8:30 pm under its new energy conservation plans. Besides, they have also asked restaurants to shut down early to save the cash-strapped country about 62 billion Pakistani rupees ($273 million).

The move comes as Pakistan struggles to quell default fears in domestic and international markets, with a $1.1 billion IMF bailout tranche stuck due to differences over the ninth programme review, which should have been completed in November. Pakistan's energy conservation plan also included banning the production of energy-inefficient bulbs and fans from February and July respectively.

According to the country's defence minister, Pakistan's peak summer electricity usage was 29,000 megawatts (MW) compared with 12,000 MW in the winter, mainly due to the use of fans in hotter months.

Half of the street lights across the country will remain switched off as a "symbolic" gesture

In the midst of the energy crisis, people in the northwestern region of the country, that is Khyber Pakhtunkhwa province are hoarding gas cylinders, Al Arabiya Post reported. live. The food crisis has also deepened in the country.  Additionally, in some videos, people were seen using plastic balloons to fill their LPG cylinders. Food inflation quickened 35.5% year-on-year, while transport prices rose 41.2% in December in Pakistan.

Meanwhile, Sri Lanka has been struggling with soaring prices for over a year, largely caused by its worst financial crisis in over seven decades. The island country sank into a financial crisis after the COVID-19 pandemic decimated tourism and remittances from citizens working abroad fell. The war in Ukraine pushed prices for imports, particularly fuel, sharply higher.

The president fled the country in July and resigned. By then, Sri Lanka finally engaged with the IMF and the two sides have since struck a preliminary $2.9 billion loan deal.

But it was Indian assistance that helped Sri Lanka buy time.

India provided about $4 billion in rapid assistance between January and July, including credit lines, a currency swap arrangement, and deferred import payments, and sent a warship carrying essential drugs for the island's 22 million people.

Sri Lanka's key inflation rate eased to 57.2% in December from 61% in November 2022.