There is an alarming situation as debt and liabilities are out of proportion. It is ironic that despite talks of reforms and a shallow austerity drive, the country’s balance sheets with reference to its annual income and expenditure are in tatters. Within a span of nine months of the ongoing fiscal year, the country’s debt has soared by around Rs12 billion to post a composite figure of Rs81 trillion. With no new sources of external funding and a slumping revenue generation, it is an SOS call, to say the least. To further compound the equation is the dismal rating of the country by international credit agencies, pointing out insolvency and a risk of default on its sovereign commitments. In simple words, the debt accumulation is equal to three-fourths of the economy touching the statutory limits of borrowing.
The depreciation is evident from the fact that the state has added a debt of Rs31 billion per day over the year, despite a relatively stable rupee and the recent of a $1.1 billion tranche from the IMF under the $3 billion standby arrangement that is successfully nearing its completion. But what torpedoed the entire circumference is the inability of the system to post political stability, which also led to public concerns from the Washington-based prime lender. The sitting dispensation has a budget deficit of 7.7 per cent of the GDP which is untenable even after fudging figures, as it has crossed the anticipated benchmark of Rs1.3 trillion. Yet, the government, a coalition of two major parties as well as smaller groups, is mindlessly playing to the gallery to gain political capital and has doled out promises of substantially enhancing the salaries of the PM’s Office bureaucracy, apart from pledging a grant of Rs23 billion to the restive state of Azad Kashmir after recent upheavals that saw three lives lost in protests essentially against price hike.
It seems economic reforms is a buzzword, and all play to its sanguinity. But as a mark of reality, there is nothing on the ground, leaving room open for the lenders to dictate more draconian terms for doling out just a couple of billion dollars. The IMF’s prescription to slap more taxes on the already-burdened salaried classes, and enhance an already unbearable power tariff to a break-neck module will surely beget more debts for the country to stay afloat apart from spiraling a revulsion. The economy is in a muddle and the tendency of living on borrowed money is no less than nursing a gangrene. All it demands is a surgical option wherein the national lifestyle and account books must see a top to bottom change, if we have to get away with it. With an international payable of over $120 billion, exports on the downslide and an agrarian country importing grains, it is a precipice to disaster. It’s time to stem the rot by getting real. That can only come full circle, if Pakistan stops appeasement and opens up for trade with regional dynamics.
Published in The Express Tribune, May 18th, 2024.
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