Foreign Debt, Barrier to Development: press conference

Special Correspondent, London
(Tuesday, 05 November, 2013)

It is essential for progress and prosperity of the country that Pakistan must get rid of all loans which it has borrowed from IMF and other similar agencies. A large chunk of Pakistan’s resources is consumed for paying the debts. New loans are borrowed on harsher conditions to pay off the previous debts. This may lead to further deterioration of economic condition. These views were expressed by the office bearers of Islamic Relief and Jubilee Debt Campaign in a press conference at the Islamic Relief office on Friday.

The representatives expressed deep concerns about the economic crisis which the South Asian country is facing and stressed the need to pay off the debts.

Country Director for Islamic Relief in Pakistan Dr. Fayaz Ahmad said that the democratic governments couldn’t focus on the real problems of the country due to the pressure of the foreign loans. The borrowing is affecting the poverty-stricken masses of the country by adding to the prices of daily use commodities. This has badly hit the purchasing power of the common man.

He said, “More than 50 million people in Pakistan live below the poverty line. Efforts to tackle poverty and meet the millennium development goals are in tatters as the economy struggles to deal with the coasts of devastating seasonal floods, the ‘war on terror’ and the huge burden of foreign debt. The legitimacy of the debt needs to be challenged if widespread economic turmoil and instability are to be avoided.”

Abdul Khaliq of CADTM Pakistan criticized the conditions of the IMF loans to Pakistan and demanded that that payment of all type of installment to pay loans should stop until the legal status of these loans is established.

He said that in 2006 the foreign debt on Pakistan was worth $58 billion whereas now the country will have to pay $6 billion annually to creditors which are 20% of the country export revenue. Asserting that the common man had to bear the cost which the loan had incurred, he said “In simple words a single installment will be more than the Health and education budget of the nation.”

 He further added that the status of these loans is controversial as most of these loans were borrowed by the army dictators and were spent on the defense related projects. He said that there is need for reforms in the taxation system of the government.

Tim Jones, Senior Policy & Campaign Officer of Jubilee Debt Campaign said, “the majority of debts that Pakistan supposedly owes to the world have done nothing to help the majority of the country‘s people except funding useless and damaging irrigation projects, to propping up dictators and using natural disasters to push more loans on the country.”

Pakistan has had enough of this kind of help from western institutions like the IMF, which has increased the burden of debts whereas the credit originally borrowed was employed for damaging and undemocratic policies. He said that it is high time that Pakistan start mobilizing its own resources to build a more equal, balanced and stable country.


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