KARACHI:
Recently, Pakistan signed a staff-level agreement with the International Monetary Fund (IMF) for a $3 billion bailout package. The loan will provide the dwindling economy with a much-needed respite. Historically, Pakistan has been heavily dependent on foreign loans. The country first approached IMF in 1958 and has been borrowing since then. The former PTI government announced that it will not reach out to the IMF in order to rid the country of dependency on external and foreign forces. But it fell short of fulfilling its promises and ended up going to the IMF to seek financial assistance.
Pakistan spends more than 60% of its budget on debt repayment. The only positive outcome of IMF bailout packages is short-term relief and economic stability. If the country utilises the remittances appropriately, widens the tax base, cuts down amnesty schemes, and expands industrial activity then it can reduce reliance on loans. The absence of economists on the governments’ teams has further compounded the problem. The country’s weak economic structure has failed to facilitate the people as development remains stagnant. Resultantly, unemployment has consistently risen.
Over the years, many countries have struggled with economic crises, but they have not resorted to borrowing from external financiers and rectified the issues themselves. Unfortunately, Pakistan has been stuck in a debt trap for decades now, which has weakened its global position. This is why it has failed to garner attention towards India’s atrocities in the Indian Illegally Occupied Jammu and Kashmir and other critical issues. Pakistan needs to put its house in order to be heard on the international level. It needs to maintain its sovereignty by reviving its economy and reducing its dependence on loans.
Mujeeb-ur-Rahman
Karachi
Published in The Express Tribune, July 13th, 2023.
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