Seeking $600 million Chinese loan exposes truth about country’s economy
The government of fantastically successful businessmen and financial wizards received accolades recently from foreign institutions that Pakistan’s economy was set on the path to success and opulence. The positives centred on stable B ratings and the performance of the Pakistan Stock Exchange, and little else. This was enough to launch the Prime Minister into an ecstasy of flighty rhetoric that the country’s economy would grow by annual eight percent in the next eight years and figure in the top twenty five global economies. But recent economic data closer to home reveals a greatly disturbing situation and future trends, and the pathetic plea for a $600 million loan from China to boost foreign exchange reserves, confirms it.
The energy circular debt again tops Rs 370 billion and cumulatively it has grown to an unbelievable RS 705 billion by the government holding on to payments and subsidies, and the two eternal reasons, line losses and low bill recovery. The hasty settlement of the previous Rs 480 billion circular liability by the incoming PML-N government is now found replete with dubious payments to favoured IPPs. The mystery of Saudi Arabia’s 2014 $1.5 billion handout still remains hidden. Pakistan’s reported borrowing this fiscal year stands at $4.1 billion with more to come in costly foreign loans. Current Account deficit is $3.6 billion up from $1.7 billion last year, trade deficit has widened to $17.428 billion, a 29 percent increase, with exports sliding and imports rising 13.7 percent to $29.113 billion.
One can blame the growing import bill on the vast CPEC infrastructure coming up, but the overall precarious state of the economy tells a sorry, but familiar, tale of government procrastination and neglect, inaction, conflict of interest deals, lack of transparency, spendthrift and wasteful habits, extravagant lifestyles of the ruling elite, opportunistic self-serving policies, a casual approach to governance, cold insensitivity to the common man except in fake rituals and hollow words, of personal honour and national pride sacrificed at the altar of petty gain … but then one must stop somewhere!