The debt of developing countries of the world in 1970 were about $70 billion and has surged to $2800 billion in 2006, increasing 40 times in the last 35 years, seminar on 'Rising Debts of Pakistan and role of IMF' told on Wednesday.
The seminar was held in connection with Global Week of Action against debts, organised by Campaign for Abolition of Third World Debt (CADTM) Pakistan and Action Aid Pakistan here at Lahore Press Club. They also said that debt is no longer a private affair because it has a political dimension as well, which concerns all nations and societies.
The indebtedness of most countries of the south is becoming unbearable because the repayments and interest payments demanded by creditors are beyond the means of poor countries and prevent all forms of development.
Speaking on the occasion CADTM-Pakistan focal person, Abdul Khaliq said that official external debt of Pakistan has never gone down since 1999 when the military regime of General Musharraf took over.
The external debt shot up to $45 billion in June 2008 from $33.352 billion in 1999. Despite the facts that Musharraf regime received record US aid of about $15 billion as well as highest foreign exchange inflow in history of the country with over $25 billion coming through remittances, the debt figures kept on soaring.
Had the regime stopped borrowing, the debt would have declined to $23.646 billion after payment of principal amount by the end of 2007. Jamil Umer of Awami Jamhoori Forum said PPP government approached friendly countries like Saudi Arabia and China for financial assistance but failed to invoke their sympathy.
Labour Party spokesperson Farooq Tariq said that the latest borrowing from IMF, Pakistan's total foreign debt and liabilities have now crossed the $52 billion mark, bringing every Pakistani (of 170 million population) with estimated Rs, 24412 debt. In the national budget of 2009/2010, the government allocated an amount of Rs 437.5 billion ($6.5 billion) for debt servicing. Another estimate says that Pakistan pays 44 percent of all tax collections in debt servicing.
Farooq Tariq said the government must stop accepting the pernicious conditions of the IMF and to take urgent measures such as a unilateral suspension of the repayment of debt - odious, illegitimate and largely immoral - in order to assign priority to the fundamental human requirements of its population.
Civil society activist Irfan Mufti said the purpose of funding has never fulfilled and like other countries of the South, Pakistan could not benefit from international lending. "As a result the country today, with regard to social indicators, is ranking at bottom among south Asian neighbours, he further said. "In this backdrop the ever-increasing national debt and poor economic policies, the reckless loans have become a perfect recipe of disaster for the country's future, which seems unsustainable under the circumstances" he added.
Under prevailing situation it is the need of the hour to put forward the demand of foreign debt cancellation for Pakistan. Instead of borrowing fresh loans or seeking grants from friends of Pakistan. Pakistan must call for the cancellation of its external debt. We understand that the call for debt cancellation is not a matter of charity towards the poor people of Pakistan.
It clearly shows that debt cancellation is not about whether Pakistan can or cannot afford to pay the debts. Debt cancellation is not only an urgent issue of survival for us, but it is also fundamentally a matter of justice, and it is justice for all countries of the south. Advocate Rabiya Bajwa, PPP leader Rana Akram Rabbani and Abdul Majid Kanjo of National Siraiki Party also spoke on the occasion.