Paying our own way

Pakistanis has every right to be virtuously indignant over US President Donald Trump’s hyperbolic claim that his country had pumped ‘billions and billions of dollars’ into Pakistan for cooperation in the war on terror. The clearest evidence on this count thus far comes from an examination of the total dollar inflows into the country since September 11, 2001. In the shape of loans and grants, Pakistan received a total of $67 billion from both multilateral and bilateral creditors in all that time. This is only half of what it has cost Pakistan to become a US ally in the war against terrorism — a colossal sum of $123 billion in real terms.

While it is certainly not peanuts, as suggested by former interior minister Chaudhry Nisar Ali, Pakistan actually received only $10 billion as grants during the last 17 years. The remaining $57 billion were provided to Pakistan as loans which the country was expected to pay back with accumulated interest.

Official data culled by the Economic Affairs Division has shown that up to $3.5 billion were disbursed in loans and grants annually, while average repayments stood at $2.7 billion over a 17-year period. In the financial year 2003-04, Pakistan actually paid back more and got less foreign assistance as the country received $1.5 billion disbursement of loans and grants but paid back $3.460 billion in the shape of $2.721 billion as principal amount and $739 million interest repayment. There were repeat performances in the fiscal years 2010-11 and 2012-2103 when Pakistan was forced to pay back more to its donors than what it received from them. Even in the last two fiscal years 2015-16 and 2016-17, Pakistan received a total of $17 billion but it managed to pay back the amount in the shape of principal and mark-up. Between 2009 and 2015, the country received $27.483 billion in foreign assistance but paid back $22.111 billion as debt servicing. In all, donors disbursed $49.952 billion but recovered $39.330 billion. Not a trace of the billions of billions we supposedly got.

Published in The Express Tribune, September 14^th, 2017.

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