Snowballing debt can become threat to nuclear programme


Karachi: The Pakistan Economy Watch (PEW) on Sunday said fiscal irresponsibility, mismanagement of resources, sliding exports, shrinking tax base and lack of reforms continue to push government to rely of loans which can prove a threat to nuclear programme.

Those who are crediting themselves for economic miracle base of foreign loans are committing mistakes because these loans must be repaid by someone and masses would suffer ultimately, it said.

Government has secured loans amounting to Rs 2.7 trillion from local banks while raised $500 million from international market through bongs despite opposition by the experts, said Dr. Murtaza Mughal, President PEW.

He said that many countries put off sale of bonds due to unfavourable market conditions while Pakistan opted for sale on will country will have to pay 8.25 percent interest after maturity.

The countries that raised money through bonds recently include Egypt, Turkey, Sri Lanka, Malaysia, The Philippines, and African nation of Gabon. All these countries offer lower interest than Pakistan which exposes the weakness of our economic system, he said.

Credit rating agencies, IMF and other institutions are partners in crime of showing a rosy picture of Pakistan’s economy to the world but the bond subscription shows that international investors are reluctant to buy the idea.

International institutions are pushing Pakistan towards debt trap so that it cannot survive without a hefty bailout package for which rolling back nuclear programme will be a precondition, said Dr. Mughal.

He said that getting more loans after completion of present three-year 6.6 billion dollar deal with IMF would be a crime.