KARACHI: Neither of the successive governments in the last four decades could honour their respective tall claims in bringing down the country’s internal and external debt burden, business people lamented.
By December 2016 each and every Pakistan carries a burden of national loan of Rs 167,535 as the total debt on the country has mounted to Rs 33,507 billion.
Pakistan’s current account deficit has crossed $8.9 billion in 11 months of the outgoing financial year, indicating a serious crisis on the external economic situation of the country.
State Bank of Pakistan reported $8.9 billion current account deficit from July 2016 to May 2017, compared to only $3.3 billion of such a deficit in the corresponding period of the preceding financial year.
The trade deficit in 11 months of financial year 2016-17 also mounted close to $27 billion as against $22 billion of the comparative period of last financial year.
Every successive government from Benazir Bhutto’s rule to Pervez Musharraf, Asif Zardari and the present Nawaz Sharif government has inherited a total debt of Rs 14 trillion in June 2013 from the PPP government and by December 2016, the PML government has incurred more around Rs 19,508 billion in just four years.
It means an extra burden of Rs 97,535 loan on each and every Pakistani in four years mainly because of reckless borrowing by the Ishar Dar-led economic team has been imposed. The current account deficit in FY17 is almost 200 percent higher than last financial year, when it was only at $3.21 billion.
The external economy of Pakistan is in deep trouble that is evident from the wide gap in the current account deficit and an unprecedented trade deficit as exports are declining and imports are rising in the absence of a check and balance strategy by the present government that wasting energy on the Panama case and snubbing other political parties.
Agha Saiddain and Khursheed Ahmad of Pakistan Tanners Association, Ghulam Rabbani of Pakistan Yarn Merchants Association, Rana Abdul Sattar of Pakistan Cotton Ginners Association, Shakeel Ahmad of Sindh Agriculture Forum, Qamar Qureshi of Economic Forum Pakistan, Sanaullah Khan of All Pakistan Marble Mining, Processing, Industry and Exporters Association, were of the opinion that the current account deficit makes it clear that in July 2016 to June 2017, Pakistan had not received any foreign exchange technically and instead spent about $9 billion on payment of external obligations. A key reason of this massive current account deficit is the trade deficit of $25.44 billion that had devoured entire inflow of remittances, foreign investment, foreign loans, they added. The total debt of Pakistan also includes the foreign loans and liabilities, involving over $74 billion. The repayment of domestic and foreign loans would emerge as a key problem for Pakistan in the years ahead.
Every year the country faces a budgetary deficit, ranging from Rs 11 trillion to Rs 12 trillion and this deficit is filled through massive borrowing especially from the domestic sources like commercial banks and national saving schemes. Foreign exchange reserves of Pakistan have dropped to around $20 billion from earlier record level of $24 billion, exports too are dithering, foreign investment is negligible as compared to $62 billion foreign investment in last financial year.
PML (N) government has announced its 5th consecutive budget in May 2017, but the budget totally lacks the plan to tackle the monster of loans that are growing at an alarming pace.
Published in Daily Times, June 24th, 2017.