National and International Affairs Pakistan

Pakistan’s Foreign Debts

Pakistan has always remained under huge debts, both Domestic and External. But during the last five or six years the problem has become very acute. The country’s foreign debt has soared to an all time high of $65 billion plus. It reached $ 67 billion in 2012 from $37.9 billion in 1999 and $40.5 in 2007. The Domestic debt also touched a record breaking figure of Rs. 7638 billion in 2012.

The situation has been so bad that that the government has been printing notes of billions of rupees per day. According to the figure of the last year at one time it was printing notes of Rs. 1.5 billion to Rs. 3 billion per day which is one of the main reasons of inflation and price hike in the country.

Every Pakistani has a debt of Rs. 61,000 to pay.

In the dismal scenario the value of Pakistani Rupee is also eroding fast. It has gone down from 59 to 60 per US dollar six years ago to 106 to 108 per dollar, according to the current rate. This has compounded the problems of the people and of the businessmen alike with skyrocketing prices of all essential items including food and all imports which include petroleum products and essential imported inputs of industry and agriculture.

In this precarious situation the government was compelled to approach the IMF for an urgent facility of $ 6.64 billion, which the latter has extended on very tough conditions like abolition of all subsidies, even on power and fuel, much to the detriment of the local industry and agriculture.

It may be mentioned here that during the past decades Pakistan has seldom been free of the IMF crutches. It was only once, during the prime ministership of Shaukat Aziz, that he proudly announced that ‘we have finally said goodbye to the IMF’.  But that proved to be   a short-lived respite because only in 2008 when the PPP government took over, Pakistan had to run to IMF again. It also took heavy loans from available sources besides printing notes locally sending the foreign debt to...