Human Security in Pakistan The countries that have defaulted in recent years are shown in Chart 13.1. They have witnessed a quantum depreciation of the exchange rate, which has led to runaway rates of inflation and a fall in the real size of the economy. The chain of reaction to default is shown in Chart 13.2. Chart 13.1: Economy of Countries After Default Countries Year GDP Growth Rate DEFAULTING COUNTRIES Rate of Inflation Argentina 2020-0.0 Very large Lebanon 2020-14.2 119.8 Ecuador 2020-7.8 188.3 Sri Lanka 2022-11.0 64.1 The impact in the event of a default is across the board on the HSI. The index of freedom from‘want’ is badly affected, first, by greater food insecurity. Energy security is threatened by the exponential increase in the tariffs of electricity and gas, along with substantially higher prices of petroleum products. The contraction in the size of the economy will inevitably lead to substantially greater unemployment and lower real wages. The level of freedom from‘inequality’ will also be adversely affected. Income inequality is likely to rise substantially, with unemployment impacting more the unskilled and self­employed workers and high food prices hitting more the income households. The worst manifestation of the impact of the financial crisis will be on the level of poverty in the country, as shown in Chart 13.2. Almost 20 million more people have already fallen below the poverty line, and the overall incidence of poverty has risen to over 40% during 2022-23. 106