KARACHI: In Pakistan the quantum of loan is increasing every year as the government secures new loans for the repayment of existing loans and interest. “We have almost piled up $141 billion as external debt; this is quite a disappointing situation,” said Ateeq ur Rahman, an economic and financial analyst.
The United Nations Secretary General Antonio Guterres during his recent visit to Pakistan was kind enough to mention that developing countries like Pakistan are facing difficult financial conditions and there are chances of “Default” in some cases, therefore it is essential to develop new mechanism by International Creditors for repayment.
Showing his concerns for the devastated flood hit Pakistan, he also said “I have seen many humanitarian Disasters in the world but I have never seen a climate carnage on such a huge scale” -- the worst of damages in southern Pakistan.
He advocated “Debt Swap”, in which countries instead of paying to the creditors should use that money to invest in sustainable infrastructure. This is what (exactly) Pakistan needs instead of paying debt using that money for rehabilitation and rebuilding of infrastructure but the Credibility Gap is a big hindrance to it.
He added that Pakistan has faced huge loss of $30 billion through floods and catastrophe that means amount payable as external debt and additional $30 billion has been piled up for the resilience of the economy.
Further, we need over $22 billion being the requirement to balance our “books of accounts” even without paying as ingle penny out of existing liabilities making the economic conditions more precarious. Owing to alarming situation there is no chance of further borrowing, lets depend on our own sources said Ateeq.
Copyright Business Recorder, 2022
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