The Roosevelt Hotel, which opened in New York in 1924, has been in a slump longer than the Pakistani economy. The jet set that enjoyed novelties like indoor kennels and rooms with television at the turn of the last century turned up their noses in the early 1970s. Since then, the former luxury hotel in Manhattan has lived on for middle-class tourists and convention attendees. Covid-19 killed the hotel named after US President Theodore Roosevelt: faced with losses of $37 million annually, it closed in October 2020.

New York will now rent about 1,250 rooms there for three years to house the city’s sharply increasing number of immigrants, according to Pakistan’s aviation ministry. The $220 million in rental income goes directly into depleted state coffers.

Pakistan has only one month’s worth of foreign exchange to import goods – in a normally functioning economy, a foreign exchange reserve of three months of imports is common. The situation is now so dire that since last week the Pakistani government has officially authorized barter trade with Afghanistan, Russia and Iran for fuel, for example.

Rising prices due to the war in Ukraine and damage from the unprecedented floods last summer added to the economic distress that arose when Pakistan tried to make fiscal adjustments to meet the terms of previous loans from the International Monetary Fund (IMF).

reduced by half

As a result, the value of the Pakistani currency has halved in a year, while inflation has soared to nearly 38 percent. To add to the misery, Pakistan will have to repay $22 billion in debt to foreign lenders next year.

On the brink of the financial abyss, Pakistan pinned all hopes on a new emergency package from the International Monetary Fund. However, negotiations with the International Monetary Fund reached an impasse. Islamabad dares not apply the IMF’s tougher conditions for fear of further inflation.

For its part, the International Monetary Fund is concerned about the political instability that has arisen after the overthrow of Prime Minister Imran Khan last year. In his fight for his political survival, Khan is diametrically opposed to the powerful Pakistan Army leadership and demonstrations for or against Khan regularly turn violent. This unpredictable situation is sure to continue until the elections in September.

In this political and economic darkness, the Roosevelt Hotel rental is the only bright spot. The hotel’s $220 million in revenue comes as the Pakistani government presents its budget later this week. Still, Pakistani Prime Minister Shehbaz Sharif said he hoped the deal with the International Monetary Fund would be finalized before the state budget. Because with the Roosevelt Hotel rent alone, Pakistan will not even meet the recently revised 0.1 percent economic forecast for this year.