There are moments when the global economy does not collapse, but unfolds – like a car crash in slow motion.
What we see today is not a single crisis. It is a combination of pressures building simultaneously: energy, shipping, fertiliser, food, remittances and trust. When these forces move together, the danger is not an instant collapse. It’s a slow, steady pressure on everyday life. And in Pakistan, the squeeze is felt quickly.
It starts with oil, but doesn’t end there. Rising oil prices dominate the headlines. But oil is only the first link in a longer chain. If tensions disrupt currents through the Gulf, the impact spreads quickly. Energy is becoming more expensive. Shipping costs increase. Fertilizer supply is tightening. Food production is affected with a delay. Then inflation follows – not suddenly, but gradually, creeping into everyday life. This is how global shocks move. At first quietly, like small ripples, then all at once, like a tsunami.
For large economies, this could mean slower growth. For Pakistan, it means more immediately a steady erosion of purchasing power. Food becomes more expensive. Transport costs are increasing. Utility bills remain high. Everyday goods are slowly becoming smaller or more expensive. But incomes are not rising at the same pace. That gap creates pressure. And that pressure is already visible in the lives of ordinary households, where Pakistan is most vulnerable.
The country is heavily dependent on imported fuel and LNG. Fertilizer prices are linked to the global gas markets. Many industries depend on imported raw materials. At the same time, most households already spend almost all of their income on basic needs, rent, utilities, food, education and health care. This leaves little or no disposable income for anything else.
In addition to this, millions of families depend on international remittances. This creates an additional risk. If the Gulf economies slow down, remittances may weaken. For many households, these inflows are not extra income, they are the main source of survival. Any disruption here immediately affects consumption, savings and financial stability.
This is not a typical recession. It’s a stress test, especially for the bottom half of the economy. In times of uncertainty, the instinct is to act strongly: raise interest rates sharply; tight conditions; try to check everything. But this situation is different. This is largely a supply-side shock. Higher interest rates will not produce more oil, reduce shipping costs, or increase fertilizer supplies.
What they can do is slow down businesses, reduce employment and weaken demand further. Politics must remain responsible and measured. Businesses need time to adapt, not additional pressure.
This is not a moment for complicated politics. It is a moment for clear and focused action. First priority is communication. People need clarity. When information is lacking, uncertainty grows, and uncertainty leads to panic. The second priority is targeted support. Pakistan already has strong systems like NADRA and BISP. These should be used to deliver direct assistance to the most vulnerable households rather than broad, expensive subsidies.
A third priority is managing the risk from remittances. If access weakens, the pressure on households and the wider economy can quickly intensify. A practical approach is for the government to temporarily borrow against expected remittances over the next six months based on historical trends. This can provide short-term liquidity, support currency stability and create fiscal space to protect vulnerable households during the shock.
At the same time, the banks must play their role. They should proactively extend working capital lines to help businesses deal with higher inventory costs and supply chain disruptions, ensuring businesses can continue to operate despite delays and uncertainty.
Prompt, responsible action is essential. This is exactly how Pakistan navigated the post-Covid shock by taking timely, balanced decisions instead of delayed reactions.
Engagement with international partners is also essential. The IMF must be approached with clarity: this is not a routine economic cycle, but a black swan event driven by external geopolitical shocks.
There must be a mutual understanding of temporary flexibility in program terms, allowing room to protect vulnerable households, sustain industry and preserve jobs during this period.
At the same time, this time should be used to make structural corrections that are overdue. Cutting wasteful spending must go hand in hand with speeding up the privatization or restructuring of loss-making state-owned enterprises, while exploring options for debt restructuring to ease immediate fiscal pressures.
It’s also an opportunity to move faster with smart, forward-thinking policies. For example, an aggressive shift towards locally produced electric motorcycles, supported by a network of solar-powered charging stations, could reduce fuel import bills, lower urban noise and improve the environmental footprint, while creating local industry and jobs.
At the same time, the companies must be kept alive. Simple, temporary relief measures such as an annual rent freeze can help retail businesses survive and protect jobs. The feed and fertilizer supply must also be secured early on. Food crises do not begin in the markets; they begin months earlier in fields. Delays now will show up later as higher food prices. Exports must be protected at all costs. They bring in foreign currency, support employment and provide stability in uncertain times.
Another area that requires immediate attention is contractual risk. With global supply chains under stress, Pakistan should be prepared for an increase in force majeure events, where companies or even governments are unable to fulfill contracts due to disruptions beyond their control. This can affect import and export agreements, shipping and logistics contracts, energy supply arrangements and major infrastructure projects.
Early identification is critical. Both government and the private sector need to start mapping these risks now, reviewing contract exposure and preparing legal and financial responses. If ignored, these disruptions can quickly turn into losses, disputes and long-term damage to the company’s trust.
In addition to oil and food, there are less visible disruptions now taking shape that could make the situation worse. One of these is plastic. Modern life depends heavily on plastic materials, especially those made from oil and gas. When energy markets tighten, the plastic supply becomes more expensive and uncertain. This affects everyday life in simple but important ways.
Packaging for bottled water, drinks and food will become more expensive. FMCG companies struggle to find materials. Textile exporters using synthetic fibers face rising input costs. Retailers have a harder time maintaining product availability.
The result is well known: products become smaller, more expensive or disappear altogether. Inflation spreads quietly in daily consumption, the silent thief.
Another critical but often overlooked vulnerability is the disruption in the helium supply chain. It is not much discussed, but it is essential for many advanced industries, and much of the global supply comes from the Gulf. If the supply is interrupted, the effects spread quietly but widely. At a high level, this can mean: MRI machines and hospital diagnostics become more expensive and harder to operate; slower semiconductor production leading to shortages of critical electronics; delays in fiber optics and high-tech manufacturing; bottlenecks in aerospace and defense systems; limitations on data center cooling affecting digital infrastructure; and difficulties in operating military and high pressure sensitive test equipment.
The deficiency may not seem critical in everyday life – until it is. When an MRI scan isn’t available when you need one, or a critical component of an IT system is delayed, causing essential mission-critical networks to shut down, the impact becomes very real.
Policymakers should remain aware of this risk and begin to identify alternatives and solutions before supplies reach critically low levels. This is how geopolitical supply chain disruptions and crises work. They are not always dramatic, but they are deeply connected.
At its core, it’s about trust. If people believe the system is stable, they adapt and learn to navigate. If they think it is unsafe, they panic. And the panic is spreading faster than any political reaction.
Pakistan cannot control global events. It cannot control oil prices or geopolitical tensions. But it can control how it reacts. Remaining measured, targeted and focused, while protecting the most vulnerable, protecting exports, preserving employment and keeping the economy moving, will define the outcome.
Refuse to panic. Communicate clearly. Act early. Remember, in times like these, more is less. Protect the economy.
The author is a business leader and political advocate with a focus on export-led growth, job creation and competitiveness in emerging economies. He can be found at: [email protected]
Disclaimer: The views expressed in this piece are the author’s own and do not necessarily reflect Pakinomist.tv’s editorial policy.
Originally published in The News
