Crushing burden of External Debt


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The graph shown above is self explanatory.But for those of you who are not that much into economics , let me explain this in simple terms.

In last 4 years, Pakistan`s highest external debt was  66451 million USD, this is the total amount of debt which Pakistan owed to foreign creditors.

the country’s mammoth debts and liabilities that the State Bank of Pakistan (SBP) counted beyond Rs 17.25 trillion up to December 2013. This amount forms 70.5 percent of the country’s GDP.

Of the total, a break-up shows, Rs 16.62 trillion fall under the head of debts and Rs 627 billion as liabilities. The government’s domestic debts were calculated at Rs 10.22 trillion as against the loss-making Public Sector Enterprises that burdened the kitty with Rs 366 billion.

The country’s external debt, including Rs 379.4 billion from IMF, stood at Rs 6.029 trillion up to Dec 2013. The country’s liabilities can be broken up into Rs 246.1 billion external and Rs 381.2 billion domestic ones.

In simple words. The figure given by the bars in the pictogram above only shows the amount of external debts,which stands in millions. If you add the external debts and the liabilities together,you`ll get a staggering figure of Rs 17.25 trillion as at Dec 2013.

The present PML-N led elected government has added some extra billions to the resource-constrained country’s debt burden, a fact the critics say would plunge the terrorism-hit country into an unmanageable “debt trap”.

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The PML-N led government had plunged Pakistan into a debt trap. The internal and external debt combined, are more than the revenue generated. You cannot spend more than you earn, but for some reason the multi millionaire finance minister Mr. Ishaq Dar , is beating the drum of the ingenuity of the PML-N government to tackle the economic crisis. Someone should tell Mr. Dar that whenever a country exceeds its borrowing limit, it sets off an inevitable debt trap, a trap which has already been triggered for Pakistan. With out dated economic policies, the current government has failed to boost economic growth in the last year. The balance of trade has declined by almost Rs 7 million and the exports have reduced further by almost Rs 4 million.

The economy is not showing even the slightest sign of improvement. All of the economic indicators are flashing red, under these circumstances, it will be nigh impossible to repay the external debts and loans.

With insolvency looming ahead, the flamboyant leaders are busy showing the nation false dreams of Metro projects.

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Source:http://www.tradingeconomics.com/pakistan/external-debt
by Danial Ahmed
Team Operation Pakistan

 

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