When a nation mortgages itself to a foreign lender,it will definitely have to be ready to bow to its dictations and that is what is happening in Pakistan’s case. The International Monetary Fund has taken exception to the failure of Islamabad to release a report on the debt management, terming that a regular assessment of the debt structure is important to ascertain the fiscal condition of the country. According to the media reports, the lending agency sees debt management as an important component to manage public finance.The last report on debt management risk was released in December 2016 and the next report was due in three months. The report covers different aspects of the financial condition, including foreign currency debt, foreign exchange reserves, risks in debt refinancing, risks in interest rate and a host of other liabilities.
There is no doubt in the popular understanding that international financial institutions are the colonialists of the current era as they control finance and economy of the so-called developing nations. The strange aspect of the financial institutions is that they are ever ready to offer loans, apparently for development projects which ultimately add burden to the poor economies. In other words, the poor nations are persuaded to mortgage their economic freedom to the lending agencies. Pakistan remained debt free for four years from 1947 to 1951 and troubles started when it took the first loan from the World Bank. Unfortunately, since then the country has been accepting all kinds of loans which have now piled up to over $80 billion. If the current rate of accepting loans continues, every soul of the nation will be mortgaged in the coming years.
One fails to understand why the ruling elite and official policymakers find the external loans as an easy way to show their performance to the general public. Instead of taking practical steps to improve industry and agriculture or opting for diversification of products or producing value added goods, they simply get loans to keep the foreign exchange reserves at certain levels and launch development projects in the country. The consequences of the blind acceptance of loans are dangerous as mistakes of today are the blunders of tomorrow. The coming generations will have to reap what is being sowed today. The government policymakers have to find a solution to economic woes in business and industrial management rather running from post to pillar to obtain new loans.
