Failure to improve exports or tax collections has increased domestic and foreign loans to the tune of Rs 17 trillion which is not sustainable, a business leader said Tuesday. Dependence of grants and loans can transform Pakistan into a failed state as all efforts costing billions to boost exports have failed, said Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt.
Speaking to the business community, he said that country’s total loans stood at Rs 6.3 trillion in 2008 which are now three times more on which government paid Rs 1.7 trillion as interest in 2015.
Shahid Rasheed Butt said that interest on foreign loans amounted to Rs 91 billion in 2014 which swelled to 110 billion rupees in 2015 which speaks of increasing dependence on loans. Government paid 3.12 trillion rupees in last two years as interest on domestic loans which are always costly than the foreign loans.
Moreover 3.5 trillion rupees were borrowed in last two years from banks crowding out the productive sector which hampered economic activities, according to official figures.
The veteran business leader said that government should focus on enhancing exports and tax net and avoid borrowings as despite record loans 60 percent of the population lives on less than two dollars per day, Pakistan stands third in illiteracy after China and India and fifty five hundred thousand children are deprived of education. The situation proves that extensive borrowing hasn’t improved social indicators in the country rather contributed otherwise.