We all have been listening to all the big opposition parties in the assemblies giving big speeches about economy and how the current government is responsible for the inflation and increased taxes. What they are not talking about in their speeches is the harsh reality that the current government has nothing to do with the instability in the financial scenario. All the hustle and bustle is actually the result of a long chain of loans and mega corruptions which have been carried out by both the ruling parties in their past tenures. Here is an article reflecting the complete timeline of the debt history of our beloved country. The figures have been deeply researched and can be taken as hard facts.
1958 was the year when Pakistan approached the International Monetary Fund (IMF) for the first time. At that time, 3 rupees made a dollar which escalated to 7 rupees during the 1965 war. This escalation was because of the foreign aids being blocked due to Pakistan being in a state of war. But still the economic conditions were strong enough for us to pay back our debts which we did in time. But this economic condition ended by 1972.
In 1973, the separation of Bangladesh cornered us in a complex situation which forced Zulfiqar Ali Bhutto to take a difficult decision. He took a mere 3.42 billion dollars loan but was not able to return in time due to the intense situations of the country due to the partition. As we moved to the 80’s, the Afghan War was at its peak so Pakistan had a sufficient dollar flow. This flow helped General Zia-Ul-Haq to payback a loan of 2 billion dollars which he took from IMF.
In 1988, the Benazir Bhutto government took 2 loan packages from the international organizations. The dollar had reached 18 rupees in by then and the loan programs were scheduled for payback until 1990 and 1992. The supreme command of the country changed and in 1990 Nawaz Sharif came to power for the first time. Instead of trying to pay back our 2nd and 3rd loans, he took another loan in 1993 worth a billion dollars.
By 1993, Pakistan was under the burden of 3 international unpaid loans, yet in 1994 Benazir Bhutto still decided to take another package from IMF. This was the time when Pakistan started to pay the interests on loans instead of the loans themselves for the first time. Pakistan was getting caught up in the economic traps of the debt empire. Unfortunately, the governments kept changing and our economy could not stabilize due to these power shifts accompanied by severe corruption on mega scales.
Between 1995 and 1999, the ruling governments had taken 3 additional loan packages from the World Bank, IMF and Asian Development Bank (ADB). In 1995, we were standing with a total external debt of 39 billion dollars. In 1999, there was a time when Pakistan was almost handicapped when it came to paying back the loans. It could not even pay the interests on the already taken loans back to the lending agencies. In short, the nuclear power was near bankruptcy whereas the ruling elites had flourishing Swiss accounts which were thriving on the taxpayer’s looted money.
The biggest blow hit us when in 1999, General Pervaiz Musharaf declared Martial Law in the country. As a result of this military takeover, the IMF denied to give relaxation for paying back the installments on the loans and interests. Moreover, most of those countries with whom Pakistan was trading, imposed economic restrictions on Pakistan which were signaled by IMF.
The world operates in a mysterious way. The 9/11 incident happened and the deaths of the thousands of people in the World Trade Center changes the luck for Musharaf. America needed help from Pakistan as an ally in the Afghan War and Musharaf cashed this opportunity. The economic restrictions were lifted and Musharaf succeeded to persuade both IMF and World Bank for rescheduling the installments of the loans. This was actually a result of the economic surveys done in 1999 and 2000 and on the basis of those surveys, Musharaf met the Paris Club and took Pakistan out of the tornado which was about to engulf the complete economy of the country and hence Pakistan was rescued from going bankrupt. The economy began to stabilize and Pakistan also became capable of paying all of the existing interest on the loans and also some of the loan itself. In 2008, the total external loan reduced form 39 billion dollars to 34. This was also the year when vision 2020 was presented. According to this vision, by 2020 Pakistan would become a debt free country. From 2000 to 2008, for 9 years the dollar experienced a stability in Pakistan. It resonated between 52 and 62.
After Benazir Bhutto passed away in 2008, one of the worst time began in Pakistan. Asif Ali Zardari went to IMF once again. A whopping 7.2 billion dollar loan was taken this time. The dollar started to rocket boost. By the end of Zardari’s also known as Mr. 10 percent’s tenure, the 7.2 billion dollar loan had soared up to a total of 25 billion dollars averaging at 5 billion dollars loan per year. The overall debt which was reduced from 39 to 34 billion dollars was raised to 59 billion dollars.
Asif Ali Zardari went and came in the heavyweight champions of loan borrowing. The noon league. The external debt rocketed from 59 billion dollars to 93. From July 2016 to January 2017, 6 months only, Pakistan took a staggering 4.6 billion dollar fresh loan. In this fresh loan, a billion dollars came from selling the sukook bonds. And to make this sale successful, the national motorway has been mortgaged. This loan borrowing streak did not stop here. For the upcoming sections of loans, all the national radio stations and most of the important government buildings have been mortgaged as well. In short, Pakistan took a total of 34 billion dollars in loans from 2013 to 2018 and in 2018 our total external loan was 59 billion dollars.
Talking about internal debts, (as in the loan taken by our governments from our own banks) an even bigger surprise will welcome us. In Musharaf era, every Pakistani owed 40 thousand rupees and the internal debt was three thousand billion rupees or 3 trillion rupees. In Zardari’s tenure, the figures increased to 80 thousand rupees per Pakistani and 12 trillion rupees in internal debt. The noon league raised the per Pakistani debt from 80 thousand to 175 thousand rupees and internal debt to 21 trillion rupees. These loans are like a cancer for the industries. Many products which were once famous exports of Pakistan, now have a label of made in China and Bangladesh and are imported into Pakistan. The last 10 years which increased 59 billion dollars in loan, also forced almost 70% of our once world famous textile industry to either shut down or shift to Bangladesh.
According to State Bank Pakistan’s report in 2007, the external investment stooped down from 6 billion dollars to a saddening 0.8 billion dollars. The severe terrorism, extreme corruption and unstable conditions of the country made way for this sudden drop. During Nawaz’s last regime, the external investments dropped to 0.2 billion dollars. However this time the reason was not terrorism. It was sheer corruption by the ruling party which caused severe lack of trust from international investors.
The Pakistan Steel Mills, which experienced profit for the last time in 2006, went into loss in mere 2 years. In 2008 it was estimated to be at a loss of 16 billion rupees which was increased to 118.7 billion rupees by Zardari. Nawaz Sharif’s contribution in raising the loss of this state industry turned out to be the most devastating. Pakistan Steel Mills was in a total loss of 200 billion rupees by the end of 2018. Not to mention, his personal steel mills enjoyed billions in profit in these years. Talking about PIA, Pakistan Railways, Agriculture, Energy Sector, Imports and all the economic losses would eat up another big bunch of time but the story would not be completed.
In the end, it is important to understand that this is the year when Pakistan has to pay another installment of a so called long term loan taken by the previous governments. The question that rises here is this. Who damaged our economy the most and how much responsible should we hold the new first time ruling party for our existing scenario on the international economic canvas?