ISLAMABAD: On March 27, 1952, Pakistan signed the first-ever loan of US$27.2 million with the International Bank for Reconstruction and Development (IBRD). The loan was obtained for rehabilitation and development of Pakistan Railways.
Similarly, on Feb 2, 1951, Pakistan signed the first-ever grant assistant agreement with the United States. The amount of the grant is not mentioned in the documents.
Meanwhile, from 1947 to 1949, Pakistan’s friendly countries like Canada, Australia, New Zealand and the United States of America provided grant-based assistance to Pakistan.
From 1950-1967 Pakistan had received US$4.9 billion foreign economic assistance _ $3.67 billion as loans and $1.23 billion as grants.
Pakistan’s journey as a beggar country began in 1951 and since then every successive ruler/government made ‘begging’ a culture and part of the governance as a result of which Pakistan is now indebted with US$135 billion foreign loans by June 2022.
Loans latest update
The PML(N) government has increased the burden of loan on every Pakistani by about 97,535 rupees in just four years, from July 2013 to Dec 2016. During this period, the total debt of Pakistan (foreign/domestic) has been expanded to 33,507 billion rupees by Dec 2016 (from mere 14,000 billion in June 2013).
The PML(N) inherited total debt at Rs 14 trillion (Rs 14,000 billion) in June 2013 from the PPP govt, after winning the 2013 elections. By Dec 2016, the government has put more burden of 19,507 billion rupees on Pakistan in just four years time. Thus, the PML(N) government created extra burden of 97,535 rupees loan on each and every Pakistani in four years (if we count 200 million population) mainly because of reckless borrowing by Ishaq Dar-led economic team of the PML-N government.
By Dec 2016, each and every Pakistan carries a burden of national loan of 167,535 rupees as the total debt on the country has mounted to 33,507 billion rupees by Dec 2016, according to the State Bank of Pakistan. The debt burden on Pakistani has been calculated keeping in view a population of 200 million.
Every year the country faces a hilarious budgetary deficit, ranging from 11 trillion rupees to 12 trillion rupees and this deficit is filled through massive borrowing especially from the domestic sources like banks and national saving schemes.
During their previous five-year stints in power, the PML-N added around Rs10 trillion while the PPP government added Rs8 trillion to the debt burden.
However, in June 2022, Pakistan’s total debt and liabilities hit Rs59.7 trillion record level as the PTI government added Rs12 trillion _ or one-fourth of the total debt accumulated in the past 74 years.
According to latest data of the State Bank of Pakistan, the debt burden has increased both in absolute terms and in terms of the size of national economy. Total debt and liabilities of the country increased to Rs59.7 trillion, showing an increase of Rs11.9 trillion (25%), compared to the preceding fiscal year. It means in the fiscal year 2021-22, the government expanded one-fourth of the debt _ accumulated from 1947 to June 2021.
In fact, the former PM Imran Khan had promised to the nation to reduce the burden of debt but when he left office in April 2022, his government had added Rs19.5 trillion to the total debt of the federal government. The gross public debt stood at Rs49.2 trillion by the end of last fiscal year, according to the SBP data. There was an addition of Rs9.3 trillion, or 23.4%, in just one year.
Notably, during its previous five-years in power, the PML-N added around Rs10 trillion to the national debt and the PPP added Rs8 trillion to the debt burden.
During their previous five-year stints in power, the PML-N added around Rs10 trillion and the PPP Rs8 trillion to the debt burden.
During the PTI’s tenure, the lower-than-targeted tax collection, a sharp currency devaluation, higher interest rates, expenditures along with losses incurred by state-owned companies and debt mismanagement were the main causes for the rapid growth in public debt.
Unfortunately, at present, Pakistan is the only nuclear power in the world which has been turned into ‘begging power’ because of multiple factors _ lavish living of ‘Sarkari elites’ (all those who get each and every luxury from the state but their performance can be imagined from the present state of Pakistan. Corruption, exploitation, nepotism, bad governance, rolling back of democracy again and again, NROs given to politicians involved in mega corruption cases, zero accountability of Generals (sitting or retired) involved in corruption, violation of the Constitution of Pakistan, extortion of money from the masses in the name of ‘sacrifice’ after every programme of the IMF, massive borrowings, unemployment, poverty and socio-economic injustice are some of the major causes which have turned this nuclear power into ‘begging power’.
