The world economic orders is gradually taking a new shape after British exit from the European Union and Iran’s entry into the international market. As the second half of the current decade has started, politico-economic changes are inevitable, creating new business opportunities for some nations and posing grave challenges for the others. According to newspaper reports, the banks in various Asian countries are trying to raise up $600 billion till the closure of the decade to cover up losses from the non-performing loans. In India, the chief of the reserve bank has already resigned, starting a blame gaming within politicians and questioning the actual strength of the Indian economy in the world economic order. The industrial sectors are going slow in many economies in Asia, especially China which would have adverse effects on the economies of small nations. According to experts, slow rate of growth and increasing volume of bad loans could shake banking industry in Asia Pacific.
Pakistan is facing various challenges to its economy due to shortage of electricity and rising cost of production in the country. Despite showing four percent growth in the industrial sector during the outing going financial year, the sector is gripped with fear of recession. Pakistan’s exports have declined from $25 billion to $20 billion, but no one in the government is ready to take responsibility of the losses. If financial markets in Asia face troubles, it will definitely affect the already sagging economy of Pakistan but it seems the policymakers are not ready to change their ‘who cares’ mood. According to experts, the slow economic growth will affect banking industry in many economies in Asia while introduction of new financial technology will affect the traditional banking industry in the region. Besides, the non-performing loans will add pressure on banks to fight the war of their survival. Simply wait and see policy will not work anymore.
As regard to Pakistan, its economy is resilient and banking industry is growing. Therefore, it is hoped that imminent financial crisis in Asia and elsewhere will have minimal effects on the country’s banking industry. However, the banks also need reforms to gain the trust of general public in the industry as Pakistan has the lowest ratio of account-holders in the world. The Pakistani banks should introduce new financial products to facilitate foreign investors and enhance soft image of the country. The world is changing at fast rate and the country’s banks should prepare themselves to face challenges and exploit opportunities. The central bank of the country also needs reforms to effectively implement the financial order in the country and keep the financial market off the financial crisis in the region.
