Karachi: Although all past governments of Pakistan had taken foreign loans to meet their requirements, the incumbent Pakistan People’s Party-led government has set new records of getting loans during its first three years.
At present, Pakistan owes 59.5 billion dollars to various institutions, and there is little possibility of the government being able to discharge its debt servicing obligations without getting more loans.
When General Musharraf took over in October 1999, toppling the then Prime Minister Nawaz Sharif, Pakistan’s foreign debts stood at 37.9 billion dollars.
At the end of June 2007, when Gen Musharraf was still in power, the loans rose to 40.5 billion dollars, which means that foreign debt/liabilities did not register much increase, The Nation reports.
However, the external debt/liabilities stood at 22 billion dollars only till the end of the 80s, which shows that Pakistan’s dependence on foreign loans has been going up with the passage of time, despite consistent claims by all governments that they had done miracles to improve the national economy.
The performance of the incumbent government in this sector seems more painful, as not only has it been adding to the burden of foreign loans, it has raised the prices of all utilities manifold during its first three years.
Economists say that accumulating foreign debt has put negative impacts on the country’s fiscal stability. Poor debt management poses risks for both the public and private sectors in the form of economic instability, insolvency, debt distress, and fiscal crisis.