Treading on the path of the previous Pakistan People’s Party government, which based its economic programme on foreign loans during five years of its tenure, the current Pakistan Muslim League-Nawaz government has adopted the same method and has increased its dependence on international donor agencies. The government is singing various loan programmes with international lenders, including the Asian Development Bank, to maintain the speed of economic growth.The Manila-based lending agency is considering extending $6 billion loan to Pakistan over the next three years to cover the financial needs of energy, transport, disaster management, water and urban services, agriculture and infrastructure sectors. The assistance will be released in installments of $2 billion a year under Country Operations Business Plan. The package also covers funding for the Peshawar rapid bus transit service as well as for the Pakistan National Disaster Management. A part of the fund — $100 million — will go to the Gwadar Urban Development project and an amount of $850 million will be spent to enhance connectivity of the country with Central Asia and South Asia regions under Central Asia Regional Economic Cooperation programme.
As the policymakers have decided not to enter any extended facility programme with the International Monetary Fund, the country’s dependence on the Asian Development Bank and the World Bank will increase in the years to come. At a time, the country is reeling under economic woes, industry is under pressure and foreign exchange reserves are dropping, the expensive loans will lead the nation to nowhere. The government has so far failed to increase exports which have been showing a gradual decrease for the last couple of years. According to experts, the markup rate of the proposed loans will be increased to 64 percent in three years as compared to the previous loan rates. Pakistan is the least attractive destination for foreign investment and the policymakers will have to find root cause of the problem. Going to the foreign donors for every single project is not a wise decision and it will add to the miseries of the coming generations. An IMF study shows that the country needs $11.5 billion for the fiscal year 2016-17, $13 billion for 2017-18 and $15 billion for 2018-19. It appears the government will plug the holes by taking more and more loans.
One fails to understand why the policymakers and technocrats, who areholding senior positions in the government departments and drawing hefty salaries and perks, have no vision to put the economy on the right track. Three and half years of this government have passed, but every project is completed with foreign money. This is not a development, but an eyewash in the name of the development.
