According to newspaper reports, the economic managers of the country are unprepared to face the emerging situation in next few months as the external debts would be touching $70.2 billion mark by the end of the current fiscal year from $66.457 billion in September last year. The International Monitory Fund has warned that Pakistan’s debt-to-GDP ratio will reach 65 percent mark in few months contrary to the government’s claim that the ratio has dropped from 64 percent in 2013 to 59.1 percent in October 2015. Pakistan can borrow from international donor agencies only to a specific limit and once it reaches a breaking point, it will no longer be able to get foreign loans. Finance Minister Ishaq Dar and his team are apparently working on adhoc measures to pass the tenure of the present government without facing economic catastrophe. The government issued its first bonds in April 2014, raising $2 billion and avoiding the risk of default. The IMF also came to its rescue but on the condition that the government will introduce structural reforms in economic and financial sectors. The fund also expected that the government will restructure the loss-making public sector enterprises, including Pakistan Steel and the Pakistan International Airline. The political party, which came to power with a slogan that it will break the begging bowl, has pushed the country into a vicious debt trap.
The economy of Pakistan survived around three years from 1947 to 1951 without getting any foreign assistance. Once the Pakistani prime minister of the time visited the United States, the government started signing loan agreements with world donor agencies including World Bank and the IMF. It received $121 million from 1951 to 1955 and the debt has been piling up since then. By December 1969, the external debt of the country stood at $2.7 billion which reached $3 billion by December 1971. The external debt of the country jumped from $2.7 billion in December 1969 to over $70.2 billion in February 2016, showing a whopping 2,354 percent increase during the last 47 years.
The government is still looking for the loans from foreign donors and has failed to maintain financial discipline. The financial managers of the country go on pleasure trips to other countries even to negotiate for loans without realizing that they have no legal or moral authority to spend the public money on such tours. The expenses of the presidency, the prime minister’s house, the governor houses and the chief minister houses are a burden on the national economy. Until the people at the helm of affairs change their mindset, situation of the country is not going to change.
