Britain borrowed once, Pakistan 25 times

On 29 December 2006, Britain wired its final instalment of $83 million to the United States Treasury. It was the last payment on a loan taken in 1946, when a victorious but bankrupt Britain went to Washington asking for money to buy food. The original sum was $3.75 billion; Britain repaid twice that. The country that had just won the Second World War spent six decades paying for the privilege. Few Pakistanis know this story, yet it is the closest parallel to our own relationship with the IMF, whose review mission arrives this month.

Britain entered the war as the world's banker and left it a debtor. American law required cash for every rifle and tanker, so Britain shipped out its gold, made its citizens surrender their American shares and sold overseas assets at knock-down prices. When the cash ran out, America offered Lend-Lease, which President Roosevelt likened to lending a garden hose to a neighbour whose house is on fire. The real terms were harsher: Britain had to sell what it still owned before aid flowed. A profitable British firm, American Viscose, went for half its value.

A week after Japan surrendered, the aid was switched off. Britain's most famous economist, John Maynard Keynes, went to Washington to ask for a grant in recognition of his country's sacrifice. He came home with a loan, on condition that the pound become freely exchangeable for dollars within a year. Convertibility began in 1947; within five weeks a fifth of the loan was gone, and the pound was devalued by 30 per cent in 1949. By one estimate, $450 billion in today's money flowed from Britain to America between 1940 and 2006, more than the entire Marshall Plan.

Four lessons follow. First, sovereignty is rarely lost in a treaty; it is lost in the fine print of finance, one reasonable-sounding condition at a time. Nobody invaded Britain; it signed voluntarily because the alternative was worse. Second, a lender's conditions price the borrower's weakness, not the lender's might and malice; Britain's error was not borrowing but arriving at the table with nothing left to bargain with. Third, sequence matters. Britain opened its currency before its economy could bear it; reform forced before the foundations are ready does not liberate, it bleeds. Fourth, even the closest ally will not give a grant when it can give a loan. Keynes asked for gratitude and received an interest rate.

Set that single loan beside Pakistan's record. We joined the IMF in 1950 and signed our first arrangement in 1958. Since then, by the Fund's own count, we have signed 25. The latest, a $7 billion Extended Fund Facility approved in September 2024, was joined in May 2025 by a $1.4 billion climate facility; our outstanding credit stood at SDR 7.14 billion, roughly $9.5 billion, at the end of March 2026.

Recent numbers are the best in years, with a primary surplus and $16 billion in reserves, but the 2026-27 federal budget tells the deeper story in three numbers. Of a total outlay of Rs18.77 trillion, Rs8 trillion goes to interest, Rs3 trillion to defence, and just Rs1 trillion to the entire federal development programme. Forty-three paisa of every federal rupee is interest on what we have already borrowed.

The comparison holds in the mechanism: a country runs short of hard currency, goes to the last lender left, and accepts terms it would never choose freely. It breaks in three ways, each more instructive than the similarity.

First, frequency. Britain borrowed once, out of catastrophe, and paid for sixty years. It went to the IMF once more, in 1976, and never again. Pakistan has borrowed 25 times in 68 years, almost entirely in peacetime, and one programme now begins as the last one ends.

Second, authorship. Britain's weakness was imposed by the war and then priced by its lender. Ours, repeatedly, has been done by us upon us. Britain's terms were designed to open its empire's markets to American firms. Pakistan's terms read like a to-do list we wrote ourselves and never completed: tax the untaxed, price electricity and gas honestly, stop the bleeding in state enterprises. What we keep forfeiting is credibility, and the interest on that compounds faster than any loan.

Third, foundations. Britain, for all its post-war misery, kept what a nation rebuilds with: industry, science, high quality universities, and a tax system that reached every citizen. Our tax net covers barely five million filers in a population of 250 million. A country that will not tax fairly and comprehensively has already outsourced its sovereignty; the IMF merely sends the invoice.

The prime minister called the 2024 facility Pakistan's last; every government since the 1980s has said something similar. What would make it true is not a better negotiator in Washington but a better state at home. The steps are known: bring retail, property and agricultural income into the tax net and hold the revenue board to its targets; price energy at cost and end the circular debt; sell or shut loss-making state enterprises; publish the asset declarations of senior officials by December; and let the provinces raise more of what they spend. None of this needs an IMF mission to demand it.

Sovereignty is not measured by whether a country borrows, but by whether it can afford to say no. Britain closed its ledger in 2006. I spent my working life studying how governments in Europe and Asia manage public money, and came home believing Pakistan can close its own. That is a generation's work: policymakers who keep their promises, citizens who pay what they owe, and universities that produce leaders of competence and character who will not trade the national interest for personal gain. The prize is a Pakistan whose children read about IMF dependence as history, not live it as habit.