The country’s economic situation is moving towards the red zone
When the PML-N came to power in 2013 one of its main plans was the smashing of the country’s signature begging bowl and steadying the nearly run down economy. The business background of some of its top leadership raised hopes of a rapid recovery and a dynamic improvement in the financial sphere. Nearly four years down the road, the miraculous upturn is still a mirage, while the usual benchmark indicators point to really stormy seas ahead for the economy, for industry and of course for the broad masses who would be at the receiving end. The IMF has come and gone with its driblets, doles and pre-conditions and must be eyeing the prospects of further profitable handouts which appear inevitable Most disturbing of all is the country’s soaring, and almost unsustainable, domestic and foreign debt, which according to a Public Debt Management Report recently released by the Ministry of Finance, presents a horrific scenario.
It would be extremely difficult for Pakistan to meet its debt requirement in the near future. Pakistan’s external debt liability which is expected to jump to an astronomical $110 billion in four years according to experts would require a $22 billion annual repayment package, which is nearly the total average figure of our foreign exchange reserves. In this sphere alone, the growing specter of possible bankruptcy haunts the country. And the government’s frenzied domestic borrowing from local banks and other financial institutions at relatively higher interest rates mostly for unproductive ends have also driven up its contingent liabilities to Rs. 721.2 billion in June 2016, from Rs. 636 billion in the last fiscal year. All this has also shrunk the time period of maturity of foreign and domestic loans, as well as discouraging bank loans to the riskier private sector, thereby hindering industrial development.
Our economic genius has so far manifested itself only in amnesty and other money-whitening schemes, but the government needs to go beyond such window-dressing to avoid a financial meltdown. And time is of the essence.
