In its recent report, the International Monetary Fund has projected the debt servicing requirements of the country at $31.3 billion until 2022-23. After the apprehensions that Pakistan would be listed in the terror financing countries, the government is looking toward Chinese financial institutions to get further loans after mortgaging the national economy to the international financial institutions. A major cause of concern for the government is that its ability to seek loans from the World Bank and other financial institutions would be curtailed after Pakistan’s name will be placed in the list of terror financing countries in June this year. Instead of working on a national action plan to salvage the economy, the government policymakers have started exploring other means to get loans. It appears the financial managers in the country have little knowledge and myopic view of the current economic trends in the international level. Soon after coming to power, the government of the Pakistan Muslim League-Nawaz sold its economic plan to the IMF after entering a three-year extended facility programme of $6.4 billion. The loan programme ended in 2016, but its repercussions are still there in the financial corridors of the country. The current media reports suggest the government is negotiating with a Chinese financial institution to get $1 billion as a foreign commercial loan. As the much advertised macroeconomic stability has ended in fiasco due to mismanagement and maladministration, the World Bank and the Asian Development Bank have already held back $700 million as balance of payments’ policy loans.
The government had earlier borrowed $2.3 billion from three Chinese financial institutions at heavy markup rates. As the official foreign currency reserves of the State Bank of Pakistan declined to $12.4 billion, which are near to the minimum threshold to cover two and half months of import bill, the government is hoping to get another $200 million from a Chinese bank. The claim of former finance minister Ishaq Dar that the country has achieved macroeconomic stability has vanished in the air soon he left the office last year. The economy has reached the lowest ebb in recent months as no one is apparently answerable to the economic woes of the country.
The government is continuously seeking this loan and that loan from every financial institution to run the day to day affairs. There is a need to do something on war-footings to extricate the country from the economic mess.
