Escaping a quagmire Many Pakistanis aim to enter EU illegally

S. Khan

The sinking of a boat carrying migrants to Europe on Sunday — resulting in the deaths of dozens of people, including many from Pakistan — has sparked a debate in the South Asian country about the dire economic situation that is forcing many young people to embark on such perilous journeys in search of better conditions abroad. The boat crashed on rocks and broke up in heavy seas near the town of Steccato di Cutro in southern Italy, killing at least 64 people, including about 14 children.

There were 80 survivors, who said that the boat had been carrying about 180 to 200 people. Italy has arrested three men, a Turkish man and two Pakistani nationals, in connection with the incident.

Pakistan’s Foreign Ministry said 20 citizens had been on the boat and 16 of them had survived but four were missing. Prime Minister Shehbaz Sharif has ordered authorities to ascertain the facts, and the Federal Investigation Agency has launched a probe into human trafficking.

Many Pakistanis and experts say the nation’s crippling economic crisis is a major reason why many people are looking to migrate abroad, even through risky and illegal means. Pakistan’s economy has been in turmoil in recent years, and desperately needs external financing, with its foreign exchange reserves dipping to about $3 billion (2.8 billion euros), barely enough for three weeks’ worth of imports.

The catastrophic floods in 2022 aggravated the crisis by inflicting more than $30 billion in damages and economic losses, and displacing millions of people. Food prices have soared, and the number of people facing food insecurity has doubled to 14.6 million, according to UN figures. The World Bank estimated that up to 9 million more people could be dragged into poverty as a result of the flooding. Over one-fifth of Pakistan’s 220 million people already live below the national poverty line, according to the Asian Development Bank and IMF.

Currently, inflation is running at nearly 30%, the wealth gap is enormous, and tax avoidance by the rich is rampant. According to industry groups, about 7 million workers have lost their jobs in the textile industry alone as production costs rise and exports dwindle, putting the sector on the edge of collapse.

Shahida Wizarat, a Karachi-based economist, said flawed policies had landed Pakistan in this economic quagmire. She pointed to the nation’s recurring trade deficits, which have caused depreciation of the currency, resulting in high import costs, rising debt burden and increasing costs for doing business.

Azra Talat Saeed, economist and founder of the NGO Roots for Equity, told DW that the rampant problem of tax avoidance and evasion has also worsened the government’s debt burden.

In Pakistan, the richest 5% of rural households control almost two-thirds of the total agricultural land, she said. “These rich feudal lords do not pay taxes at all,” she said, “and it is only the poor who are burdened with taxes.”

Pakistan said last week that its longtime ally China had approved a $700 million credit facility for the debt-stricken country. Islamabad has also been in talks with the International Monetary Fund (IMF) to secure a $1 billion loan payout, from the $6.5 billion bailout agreed in 2019. Pakistani authorities have already taken a string of measures, including adopting a market-based exchange rate and a hike in fuel and power tariffs; the withdrawal of subsidies; and more taxation to generate revenue to bridge the fiscal deficit.