LAHORE: The PML-N government is blindly adding to the country`s debt which has galloped to $149 billion, of which foreign debt is over $65 billion and domestic debt is about $84 billion as of July 2014.
This was the crux of talks at a press briefing, organized by the Institute for Social and Economic Justice (ISEJ) Campaign for Abolition of Third World Debt (CADTM Pakistan) and Tax Justice Roundtable, in connection with Global Week of Action against IFIs (8-15 Oct) at the Lahore Press Club on Wednesday.
`This makes every Pakistani under debt of $825. The current debt to GDP ratio is 64.27pc, violating the Fiscal Responsibility and Debt Limitation Act (FRDLA). This is a bleak situation. The Nawaz government is constantly taking new loans and stealing from people`s pockets through imposing heavy taxes and billing in order to repay the IFIs and creditors.
`The government must stop blind borrowing, generate revenue through progressive taxation and set up debt audit commission to dig out illegitimate debts.
Director ISEJ and Focal person CADTM-Pakistan, Abdul Khaliq, said Pakistan needs a financial system, which allows its people to hold their governments and IFIs accountable for their policies and actions. The people of Pakistan are less and less ready to bear the injustice at the hands of governments and lenders.
Poor people are being forced to contribute to pay back the loans, never spent on the masses` welfare.
He said Pakistan was ruled, most of the time, by the IFIs-backed military dictators who directly governed the country for 32 years (during its 67-years life).
These dictators not only undermined the democratic institutions in the country but also incurred heavy debt to Pakistan, with almost 80pc owed to IFIs, including the IMF, the World Bank and the Asian Development Bank.
The intermittent democratic stints and political leadership of Pakistan did not make any meaningful effort to get out of the clutches of the international financial institutions, pushing Pakistan gradually in vicious debt spiral. Rather rulers misused loans and misappropriated money was siphoned of f.
`There is need to set up debt audit commission to dig out illegitimate loans and corruption. It would give the government and public opinion the necessary evidence and arguments to cancel/repudiate the part of the debt that has been found to be illegitimate. But it is not sufficient in order to get Pakistan out of the crisis. It has to be complemented with significant measures to generate revenue; like progressive taxation to tax the rich, he said.
Dr. Qais Aslam said poor taxation system was at he heart of economic woes of Pakistan. The country had the lowest tax-to-GDP ratio in the world and a taxation system that was characterized as unjust and discriminatory.
`With 0.9pc of the people of Pakistan paying taxes, it comes as little surprise that it is unable to generate enough revenue to end debt dependency and break the shackles of the IMF and creditors, he said.
He regretted not a single offender had been prosecuted for tax evasion in 25 years, which showed the government apathy towards issue of tax avoidance and evasion.
Bushra Khaliq, executive director of the Women in Struggle for Empowerment (WISE), said a significant part of the public debt in Pakistan was illegitimate since it had resulted from deliberate policies by governments that had decided to systematically favor the moneyed classes to the detriment of other marginalized sections of society.