I believe in the right of the entire people of Pakistan to govern the country and be firmly embodied to the grandeur and glory of the motherland and striving for its due positioning as a responsible nuclear power amongst the community of nations. While eulogising the recent action taken by the Chief Justice of Pakistan for addressing the needs and basic necessities of the people of Pakistan i.e. the water, electricity etc., I would be taking liberty to invite the attention of the CJP to another challenge of similar importance which is negatively affecting the lives of people of Pakistan, which is in the form of foreign debt burdening each and every citizen of Pakistan with millions of rupees which in fact are increasing with every passing day.

These ongoing harmful economic policy requirements attached to both debt relief and lending from the IMF and World Bank are undermining and sometimes even negating the benefits of debt cancellation. These requirements often hurt the poorest and most vulnerable people and should be stopped immediately to enable debt relief to meet its life saving.

I have also highlighted the consequences of the mounting external as well as internal debts in my article titled “National Budget-Budgeted out of Loans” appeared in Daily “The News” on 11th May 2018. Besides, different sections of press had also been highlighting the monumental increase in the external debt of Pakistan.

Now every Pakistani owes over Rs.115, 000/-, which was a cause of concern for every citizen of Pakistan. Simply putting, it is a slavery enchaining even future generations of this indebted nation. The rate of per capita debt is, however, not much greater than that of two years ago and it would keep on growing as the government did not plan any debt retirement programme till now. As expected Mr. Prime Minister, your government is no different from others as you are also going to further burden the nation in the form of new IMF loan.

I want to bring it in the notice of the Chief Justice of Pakistan and the Prime Minister of Pakistan that there are huge numbers of problems that need to be addressed in time rather focusing on non-issues. I want to further explain as under.

All the successive governments had been taking loans from different international financial institutions without any serious and pragmatic debt retirement plans. According to the data available on the website of State Bank of Pakistan, Pakistan’s external debts and liabilities stood at US$91761 million as on May 31, 2018. There is 100 USD Billion plus CPEC $63 billion external debt whereas the internal debt figures stood at Rs.19 trillion; import (591741 PKR million) is more than double of export (250065 PKR million) but the total budget of 2018-19 is worth of Rs.5923.5 Billion. In fact, this budget is based on money borrowed from banks and external donors. Ironically, this time the budget of our motherland is totally on borrowed money.

Pakistan’s important national assets like Jinnah International Airport Karachi, Peshawar-Faisalabad motorway, Jinnah International Airport Karachi, Peshawar-Faisalabad motorway, Faisalabad-Pindi Bhattian motorway section, Islamabad-Peshawar motorway, Islamabad-Lahore motorway, building of PTV and Radio Pakistan have all been mortgaged to the external financial institutes like World Bank, IMF and others. In fact, 2018-19 budget was a source of embarrassment as the government presented the budget relying upon borrowed money.

The fiscal deficit of this year would be Rs.2.2 trillion, inflation rate is 5.5 percent and GDA Annual Growth Rate is 5.28. Economic Parameters coupled with above said three points will bring following adverse effects;

 

1.            Hike in prices because of inflation.

2.            Hike in price because of ever sliding down Pak Rupees.

3.            More than 30% levy on Petroleum Products/ inverse in gas prices

4.            Debt Services for 89 USD Billion external debts.

5.            And a huge amount for debt service for internal debt.

According to Trading Economics data, the external debt of Pakistan increased from US$ 88891 million in the fourth quarter of years 2017 to US$ 91761 million. The external debt averaged US$ 53532.35 million from years 2002 to 2018. Like preceding years, the government continued with budget deficit and there is not much a relief for common man. In the current budget, Rs.1.36 trillion has been allocated for interest payments on foreign loans only and staggering amount of Rs.920.2 billion on defense i.e. armed forces, which means out of Rs.4.8 trillion, nearly half of the amount would be going to be invested in areas which are non-productive having no positive uplifting of the plight of the common man.

It is strange that this government is focused on extracting money from the pockets of the poor people of Pakistan instead of offering them any relief besides offering any debt retirement plan in real sense. The so-called mini budget has become extra burden on common man. It is in all literal sense is a fiscal tsunami.

It is ironic that the successive governments of Pakistan have failed to curtail the ratio of foreign borrowing as well as putting in place any pragmatic debt retirement plan due to which not only per capita debt is increasing but also our economy and balance of payments were badly and negatively affected.

To be continued.

 

The writer is Chairman of think tank "global eye" & former Interior Minister of Pakistan.

rmalik1212@gmail.com

@senrehmanmalik