According to newspaper reports, the government has received fresh loans of over $1.8 billion during the last three months, including $900 million from commercial banks to maintain the foreign exchange reserves at comfortable level. The latest move should remove suspicions from the minds of the people if they have any that the government is tracking the economy in the right direction. Rather it is shifting the economy from trade and business to the loans economy and it will not be good for the country in the long run. The China Development Bank has recently provided $700 million for a short period of time to allow the country to meet its external obligations without compromising on the foreign exchange reserves. Amid imminent debt repayments pressures, $1.8 billion borrowings from July to September speak of the volume of financial mismanagement at the highest levels in the country. With fresh borrowings, the total loan amount received by the Pakistan Muslim League-Nawaz government is $26.8 billion and what will be the economic situation in the future can be anybody’s guess as it is still in the office for two more years. The reality is that the government could not manage the losses incurred by various departments and the gape is being filled by taking loans from every donor agency of the world.
The unfortunate part of the new loans is that at least $13 billion was obtained for the repayment of the previous loans and the rest was added to the debt stock. Earlier, the government had floated Sukuk bonds in the international market at the rate of 5.5 percent. During her recent visit, the chief of the International Monetary Fund had warned the government of high level of public debt and highlighted many other areas of concern. The financial warnings are not only issued by the IMF, but also other donor agencies. The economic situation is going from bad to worse, but the government ministers are outrageously depicting the rosy picture of the economy. The government received $115.8 million loans from the Asian Development Bank, but returned $237 million from July through September in debt servicing whereas it received $57 million from the World Bank, but returned$206 million on account of interest payments. The government received $2.8 billion in loans from foreign commercial banks, including $408m from a Swiss financial group. The situation shows that the government has no cognition of the emerging situation as debt servicing will plunge the country into economic crisis and it will have no option to mortgage the national assets to the foreign financial institutions.
What kind of legacy the government is leaving for the coming generation is hard to imagine when every soul in this country has been mortgaged and every department of the national importance is made to run on foreign dictation.
