According to the Fiscal Responsibility and Debt Limitation Act of 2005, the total debt should not exceed 60% of GDP. PHOTO: FILE
The Pakistan Peoples Party-led government obtained domestic and foreign loans worth Rs10.3 trillion over the past five years, highlighting the precarious state of the country’s economy, the Senate was told on Tuesday.
These loans have propelled the country’s debt and liabilities to an unprecedented Rs15.2 trillion, equal to 68% of gross domestic product (GDP).
According to the Fiscal Responsibility and Debt Limitation Act of 2005, the total debt should not exceed 60% of GDP.
In response to a written question by Balochistan National Party (Awami) Senator Naseema Ehsan, the Ministry of Finance revealed that the PPP-led government secured loans worth Rs8.6 trillion domestically between 2008 and 2013 from the State Bank of Pakistan, National Savings Schemes, commercial banks and other local institutions.
In addition, eight countries and international financial institutions also lent Pakistan Rs843 billion during this period. The government was also forced to obtain a further Rs754 billion from the International Monetary Fund to pump into the ailing economy.
Revealing more details on the foreign debt, the ministry said that Pakistan secured maximum loans worth $4.39 billion from the Asian Development Bank from 2008 to 2013. The International Development Association – World Bank’s fund for the poorest – loaned $3.21 billion. China remained the third largest lender, giving loans worth $2.91 billion.
The previous government borrowed $1.58 billion from the Islamic Development Bank during its tenure.
Kuwait chipped in with $94.2 million, Germany $67 million, Italy $39.3 million and France $38.8 million. The International Bank for Reconstruction and Development gave $350.7 million and the International Fund for Agricultural Development provided $81 million.
Additionally, the Organisation of Petroleum Exporting Countries Fund for International Development lent $32.2 million and $1 million was lent by ECO TD Bank.
The ministry of finance also stated that the domestic debt contains instruments offered to retail investors as well as market debt (treasury bills, Pakistan Investment Bonds, Ijara Sukuk) which are tradable instruments with an active secondary market.
It also informed the Senate that the Federal Board of Revenue collected Rs6.8 trillion in the form of various taxes and duties from 2008 to 2012.
Meanwhile, the ministry of finance did not comment on the issue of missing Nato containers as the matter was sub judice in the Supreme Court. However, it informed the Senate that the National Accountability Bureau was investigating the case.
Published in The Express Tribune, April 17th, 2013.
COMMENTS (6)
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I think this is the time for a change! PML-N & PPP are tried & tested, at least give a single chance to PTI, and I hope they will change Pakistan in a better way!
I am surprised that they did not borrow any money from the Indian banks as they are flushed with dollars, although some of PPP members visited India regularly even for medical treatment.
By the time the next elections roll round Zardari will say the economy was booming before he handed it over and debt was negligable and Sharif the Lion of Puinjab ruined the economy. Rehman Malik will claim that law and order was superb in the PP reign and all major incident like the Abbas town bombings in Karachi etc were the result of jealous wives and girl friends.
We seem to suffer from a severe case of amnesia and will no doubt fall for it. A bit like Nawaz Sharif clainimg that the economy was booming in 1999 and Musharraf ruined it.
And the saddest part..... Probably this time and if not then surely next time, this government will come into power again. Amazing!
But despite getting these loans on heavy markups the nation's,Pakistan's and Pakistan's key departments' economical conditions were and are the most ever worst,miserable and bankrupted than Musharraf's regime..... Here this the most important question rises,id est,where did this huge amount of money spend in Pakistan?
ET and other media were sleeping in the tenure of past govt and now they have started showing clips on security protocol of political leaders.....really pity