The nature of the global financial system is such that almost every country in the world is forced to take external loans to maintain its economic system. Despite being the largest military and economic power in the world, America is currently the most indebted and has no major economic problems. In comparison, countries like Pakistan are suffering from severe financial and economic difficulties due to external debt. According to an assessment, the debt burden on Pakistan has increased to one trillion 36 billion dollars and it is continuously increasing due to the continuous depreciation of the rupee. Of the debts owed to Pakistan, China’s debt alone is worth more than 36 billion dollars. In contrast, the IMF’s debt is 7 billion 800 million dollars, but this institution is repeatedly rubbing its nose with Pakistan to give more loans. Before signing the Staff Level Agreement, he demanded tax hikes from Pakistan, hikes in petrol and electricity prices and interest rates from 20 percent.

The strict conditions of the increase have also been implemented and not even signed. It is the result of his strict conditions that the inflation in Pakistan has crossed all the limits of history and the people are crying out. Due to Pakistan failure to keep up past promises, the IMF is constantly putting pressure on Pakistan and its conditions.

 This situation is such that not only the government but also the people have to think more about living within their means. The government has to make an effective policy especially regarding IMF debt relief and take effective measures to put the economy back on its feet through austerity policies with the help of friendly countries.

Due to its influence, the IMF is constantly putting pressure on Pakistan and is busy meeting its conditions. This situation is such that not only the government but also the people have to think more about living within their means. The government has to make an effective policy especially regarding IMF debt relief and take effective measures to put the economy back on its feet through austerity policies with the help of friendly countries.

Meanwhile, the ever-widening trade deficits has irked the World Bank and according to the WB’s Pakistan Federal Public Expenditure Review, its mainly focused on our ever-widening fiscal deficits for the last ten to twelve years.

The WB has focused on the deficit factor in the period after the 18th amendment and the seventh NFC awards after 2010, the year when the country experienced biblical floods that caused huge losses to our economy.

Analysts say that since that 2010 floods, out economy is on the downslide and since then, Pakistan’s fiscal deficit is on the widening streak.

On the other hand, the budget shortfalls also continued and to meet its deficits, the successive governments opted to public debts which increased by around eighty per cent of the Growth Domestic Products in 2022.

Like the 2010 floods, the 2020 corona pandemic also wreaked havoc with our economy and it was during this period that our public debt reached a record high of over 81 per cent.

And then the last years unprecedented floods proved the last nail in the coffin, rendering the country totally helpless on the economic front.

The previous PTI government was totally unexperienced and incompetent and could not handle the economy due to which the trade deficits and the public lending continued and reached an alarming level.

The PTI changed as many as four finance ministers within period of two years till 2021 and the cabinet shake-up by the then PM Imran Khan, continued till the PTI was in government.

Shaukat Tarin was the fourth finance minister in the then Imran Khan’s cabinet, but he too failed to handle the economy.

Not only the finance ministers were changed frequently but it was a common scene on the economic front and as many as five finance secretaries, as many FBR chairmen were changed. Besides, the Board of Investment sawn four chairmen within three years and as many (four) economic affairs ministers and industries ministers were brought from time to time by the PTI government within three years of its tenure.

During its over three-year government tenure, the PTI miserably failed to come up to expectations of the common man and it could not deliver according to its claims which proved to be false promises. The inconsistent cabinet and the ever-changing Finance Minister continue to come up with flawed economic policies due to which the party miserably failed to handle the economy during and after the corona pandemic.

The irony is that Imran Khan was fierce detractor of foreign loans, but when his party came into power, he immediately turned to the IMF for loans and as per available statistics, the debt burden increased many folds during his tenure.

 In fact, the loans taken during his government were more than those combined taken by the previous governments during the 71 years of Pakistan’s formation. Yes, the PTI incompetent economic team added piles of debt which is more than our debt compared to the seven decades.

Moreover, the foreign investors shied away from Pakistan during the PTI rules and were little to no foreign investments was done in Pakistan during the PTI government due to political instability and the PTI economic teams failure to attract foreign investments.

 And now a stage has come that even the international donors are not ready to provide more loan without strict conditions and assurances from the friendly countries.

Our economy is not growing due to rising foods prices and inflation and it is standstill at the moment. All eyes are on IMF bailout which is the only way out in current economic crisis.

Published in The Daily National Courier, April, 21 2023

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