Sky-high debt: Pressure mounts on Ishaq Dar to quit

Senate panel told if finance minister does not quit, situation may deteriorate

ISLAMABAD: Opposition senators on Thursday demanded resignation of Finance Minister Ishaq Dar in the wake of a worrying analysis of Pakistan’s economy, particularly the country’s ‘sky-high debt’, given by the Chief of Army Staff General Qamar Javed Bajwa in a major speech the other day.

The government must change the finance minister after the statement of the army chief, regarding “a grave situation of the economy”, Senator Nasreen Jalil of the Muttahida Qaumi Movement (MQM) told a meeting of the Senate Standing Committee on Finance.

She claimed that the finance ministry was at a standstill because the minister himself was busy fighting a corruption case. “If the committee does not pass a resolution for the minister’s resignation, Dar will be responsible for further deterioration of the economic indicators,” she added.



It was the second time that a call for Dar’s resignation echoed in the committee meeting. Previously, the committee put forth the same demand after Dar was indicted by an accountability court over owning assets beyond his known sources of income.

The army chief spoke about the economic situation of the country in an address to the business community in Karachi on Wednesday. He expressed concerns over the ‘sky-high’ debt, which surprised many, because the military usually does not publically comment on economic matters.

Dar has been criticised for the country’s increasing debt. Every Pakistani now owes Rs120,381 as against roughly Rs91,000 in 2013, which reflects an increase of 32% in more than four years – the ongoing tenure of the Pakistan Muslim League-Nawaz (PML-N) government.

By June this year, according to the State Bank of Pakistan (SBP), Pakistan’s debts and liabilities swelled to an alarming Rs25.1 trillion. The external debt increased to roughly $83 billion by the end of 2016-17, with debt servicing reaching $8.2 billion.

Taking stock of the debt situation, Senate committee chairman Saleem Mandviwala, who served as finance minister in the previous Pakistan Peoples Party (PPP) government, warned that if the external debt crossed $100 billion, Pakistan would default on its obligations.

However, Senator Saud Majeed of the PML-N resisted the demand for Dar’s resignation, saying that the committee could not dictate its terms to the government on the appointment of finance minister.



On the suggestion of Senator Osman Saifullah of the PPP, the committee decided to give a chance to the finance minister to come to a committee meeting and explain how well he was handling the country’s economy.

World Bank loans

The committee in its meeting also took up reports about the suspension of the World Bank budgetary support loans to Pakistan because of the deterioration in macroeconomic indicators.

Additional Finance Secretary Akbar Sharifzada told the committee that the bank had not officially suspended the lending, but Mandviwala doubted his claim. The committee asked the ministry to produce the bank’s letter that it had not suspended the lending.

Sharifzada said Pakistan had not yet requested the World Bank for a policy loan, however, negotiations for a policy loan for Public Financial Management Programme were at advanced stage, and talks for tax policy loan and trade and investment policy loan were in their initial stages.