Daily Times

The most horrible legacy of the five-year term (2013-18) of Pakistan Muslims League (Nawaz) ended on 31 May 2018 is debtocracy — a term yet to be understood correctly in Pakistan. We mention debts and liabilities only in numbers: public debt has touched the dangerous level of 71 percent of GDP. Of course, the numbers are important but more vital is a discussion on debt-slavery — a new form of subjugation that needs to be exposed. The fundamental question to be asked and debated is that why in the name of people, our elites have been recklessly borrowing money and paying huge amounts as debt servicing, which is now more than double the amount spent on defence.

What ex-Premier Shahid Khaqan Abbasi said on 28 May 2018 about our debt burden was the worst one can expect from any responsible politician. He claimed that Pakistan’s debt burden in 2018 was lower than what it was five years ago. He tried to cover up utter violation of section 3(b) of the Fiscal Responsibility and Public Debt Limitation Act, 2005 (‘the Act’) by PMLN, which increased debt to GDP by 10 percent instead of reducing it to the statutory limit of 60 percent. Opposition parties have also been totally indifferent as none of them raised a voice in Parliament or public on the issue of violation of the Act. No political party, even after the announcement of the date of next elections, has made public its plans and strategy to meet the challenge of the debt burden.

The unelected ex-Finance Minister, Miftah Ismail, on 14 May 2018 told the National Assembly that borrowing of Rs 22 trillion would be required for 2018-19 for payment of domestic/foreign debts. Thus for the newly elected government, the deadly debt trap is ready. Due to imprudent policies of the economic wizard, now suspended senator/absconder of PML-N, our external debt and liabilities as on 28 February 2018 reached US$ 98.16 billion. The position of internal debts is equally alarming. According to State Bank of Pakistan (SBP), it stood at Rs 26.8 trillion as on 1 May 2018 — it was Rs 22.5 trillion as on 30 June 2017.

Borrowing per se is not objectionable, but the issue is that of abuse of funds — wasted on perks and perquisites to the privileged classes and not for the uplift of the masses

The consequences of present economic mess are obvious: more borrowing and taxes by the new government after elections in July 2018. More taxes will retard growth and affect fixed income earners and the poor. Further debts mean more squeezing of fiscal space — enormous debt-servicing leading to deadly debt trap that is to borrow just to pay interest on old debts. Not only the latest figures of total debt and liabilities of Rs28.29 trillion, released by SBP, present a shocking scenario, but there is also another crucial document titled Revision Study on External Debt Statistics that narrates the history of our economic subjugation. It started in the 1960s when the rulers began taking large intakes of foreign loans. With every loan came a host of conditions. These conditions ostensibly aimed at reforms, in fact, meant to subjugate us, economically and politically. This aspect of debtocracy is not highlighted by anyone, except by Dr Ammar Ali Jan, in the following words:

“The basic questions we must ask about ‘our’ debt burden remain the same. Who took on such high amounts of debts, where were they spent, and who will repay them? By asking such questions, we transform the problem of debt from a technical issue of economics into a political question about democracy and priority-setting. This means challenging the notion of the ‘we’ that takes loans and insisting that the loans were taken by ruling elites, whether civilian or military, without a system of accountability for their deployment.

The Pakistani elites have been able to play their international donors by threatening an imminent collapse in case of a liquidity crisis (no one wants a strategically located nuclear power to collapse) while ensuring that the public remains disorganised to stay irrelevant in such negotiations. The result is that, while there remains enough money to build housing societies and new malls for the elites, the Pakistan government repays the debt by extracting resources from ordinary people through increasing general sales tax on basic commodities, spending cuts in healthcare, education, sanitation and now even drinking water.

Thus, debt should not be viewed as simply a technical issue, but a class project in which ordinary people become the guarantors for the risks taken by the elite.”

In Pakistan, there is a dire need for a political force to demonstrate the will to hold the government accountable for its (mis)use of loans acquired in the name of its citizens. The future of democracy depends on the crystallisation of such a political will that breaks the monopoly of anonymous bureaucrats on financial matters and turns it into an arena for popular deliberation.

There is no political force, not even the alliance of ten left parties made on 29 December 2017, that has advocated what Dr Ammar suggested in his op-ed on 24 May 2017. He is right that the future of democracy in Pakistan depends on the crystallisation of a political will that challenges the monopoly of bureaucrats on financial matters and makes it a popular public discourse for deliberation. But the tragedy is that three top vote-securing parties, PPP, PMLN and PTI are totally indifferent about this issue, and even so-called progressive parties seldom talk about it.

Way back on 29 August 2010, a multiple-party conference held in Lahore, joined by 28 political parties, trade unions, women groups and civil society organisations, resolved to launch a campaign against repayment of foreign debts and organise protest rallies across the country. In the conference, Abdul Khaliq, focal person of the campaign for the ‘Abolition of Third World Debt in Pakistan’ rightly argued that there were strong legal, ethical and political arguments for immediate suspension of debt servicing and the refusal of further loans. Senator Hasil Bizenjo, leader of National Party, pledged to raise the issue in Senate and present a resolution demanding the government to refuse to pay back the foreign debt. Where is that resolution in Senate? Where is that Hasil Bizenjo?

During the military and civilian rules, we have been borrowing recklessly. Borrowing per se is not objectionable, but the issue is that of abuse of funds — wasted on perks and perquisites to the privileged classes and not for the uplift of the masses. In debt-enslaved Pakistan, militro-judicial-civil complex, businessmen-turned-politicians and absentee landlords are affluent, but the masses are poor. The government now needs loans even to pay its employees’ salaries and day to day expenses. It is yet to be seen whether the crucial issue of debtocracy becomes an election issue in Pakistan or even finds any place in public debate and discourse.

The writer, Advocate Supreme Court, is Adjunct Faculty at Lahore University of Management Sciences (LUMS). Email: ikram@huzaimaikram.com; Twitter: @drikramulhaq

Published in Daily Times, June 3^rd 2018.