KARACHI: In Pakistan, every year the quantum of loans is increasing as the nation is securing new loans for the repayment of old ones and the interest thereon.

“We have almost piled up USD 141 billion as external debt, which is quite a disappointing situation,” said Ateeq ur Rahman, an economic and financial analyst.

He said 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 for international lenders to develop a new mechanism for repayment of their loans.

Expressing his concerns over the flood-hit areas of Pakistan, the UNSG had said: “I have seen many humanitarian disasters in the world but I have never seen climate carnage on such a huge scale.”

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 and instead of paying debt it should use that money for rehabilitation and rebuilding of infrastructure, adding but the credibility gap is a big hindrance to it.

He added that Pakistan has faced huge loss of USD 30billion in these floods.

He said further we need over USD 22 billion being the requirement to balance our “books of accounts” even without paying a single penny of existing liabilities. This had made our economic conditions more precarious. Owing to alarming situation there is no chance of further borrowing; let’s depend on our own sources, said Ateeq.

Copyright Business Recorder, 2022