ISLAMABAD: A Pakistani economic watchdog has raised concerns over the government’s continuous rely on loans, which can affect the country’s nuclear programme.
Pakistan Economy Watch (PEW) President Dr Murtaza Mughal, in a statement, said that fiscal irresponsibility, mismanagement of resources, sliding exports, shrinking tax base and lack of reforms continue to push the government to rely on loans, which can prove a threat to the nuclear programme.
Those who are crediting themselves for economic miracle base of foreign loans are committing mistakes because these loans must be repaid by someone and the masses would suffer ultimately, he said.
Mughal said the government has secured loans amounting to Rs 2.7 trillion from local banks while raised $500 million from the international market through bonds despite opposition by the experts.
He said that many countries put off the sale of bonds due to unfavourable market conditions while Pakistan opted for sale on will. “The country would have to pay 8.25% interest after maturity. The countries that raised money through bonds include Egypt, Turkey, Sri Lanka, Malaysia, Philippines and Gabon. All these countries offer lower interest than Pakistan, which exposes the weakness of our economic system,” he said.
The credit rating agencies, IMF and other institutions are partners in crime for showing a rosy picture of Pakistan’s economy to the world but the bond subscription shows that the international investors are reluctant to buy the idea, he added.
The PEW president said the international institutions are pushing Pakistan towards debt trap so that it cannot survive without a hefty bailout package for which rolling back nuclear programme would be a precondition.
