Say ‘No’ to foreign loans!

  • From: "Muslim-News" <editor_@xxxxxxxxxxxxxxx>
  • To: <submit@xxxxxxxxxxxxxxx>
  • Date: Tue, 11 Jun 2002 16:49:43 +0100

During the next few months Pakistan would add US$2 billion to its
foreign debt including a US $109 million tranche from the International
Monetary Fund (IMF) by the end of June 2002 and a US$ 500 million loan
from the World Bank which may be released some time later this year. If
we take into account all the loans in the pipelines, and of course some
repayments, Pakistan’s total foreign debts would stand at Rs. 2533
billion or US $ 42.21 billion by the end of fiscal year 2003-2004
(Source: Table 13 of ‘A Debt Burden Reduction and Management Strategy’,
the Ministry of Finance, Government of Pakistan, dated April 13, 2002). 

The financial wizards of the military government are adding these
exorbitant foreign loans to the massive burden of domestic and
international financial liabilities that the present government and its
predecessors have accumulated over the years compromising not only
Pakistan’s financial independence, but also the honour and dignity of
the nation. 

Unfortunately this time the people who are adding this enormous
financial burden to an already overburdened nation are not politicians
who are described as thieves by the official media and those who direct
it. These are the people who came to rescue the nation about three years
ago and then devastated the people by snatching their bread and butter
to fulfill their personal ambitions and to perpetuate their rule. They
took more foreign loans than the preceding political governments. 

Don’t they know that Pakistan cannot afford to take so many loans? Yes
they do know it, but the other day a writer very aptly described their
dilemma, they are the people with double personalities, they play double
games, they have double standards, they are in fact double agents. They
decided to go for more loans despite their own findings that: 

“Pakistan faces grave debt problems that threaten the economic future of
the country.These debt problems have been in the making for decades. The
country is saddled with a large external debt and huge external service
payments, which cannot be met without exceptional assistance from the
IMF, World Bank and ADB and debt rescheduling from the Paris Club. It
also has an enormous public debt burden (including the public portion of
external debt and foreign exchange obligations), debt service payments
for which pre-empt 60 percent of government revenues. By any reasonable
measure of debt burden, (be it stock ratios - such as ratio of debt
stock to GDP, exports, government revenues - or flow ratios - such as
ratio of public debt service payments to government revenues or ratio of
external debt payments to foreign exchange earnings), Pakistan’s twin
debt burdens are well beyond ustainable limits.” 

(Source: Introduction to ‘A Debt Burden Reduction and Management
Strategy’ issued by the Ministry of Finance, Government of Pakistan on
April 13, 2002) 

The same document further says: 

“There is little doubt that Pakistan is in the firm grip of a debt trap.
The country is caught in the vicious circle of high debt payments
leading to stagnation in investment and growth, with low growth, in
turn, limiting the capacity to service debt and reduce debt burden.” 

But why they need so much money? There is no National Assembly, there
are no Provincial Assemblies and there is no Senate whose members could
blackmail the government for development funds or for expensive
gratitude. Pakistan has not seen any major project like a new steel
mill, an inch of a new railway line, any new airport or even an airport
terminal, any new motorway over the years. So where all our revenues are
ending up and where these billions of dollars of foreign loans are being
spent? 

If we probe a little bit deeper we can easily find that though there
were no politicians in the government, the country’s scarce financial
resources were still being used for political ends. The recent most
unfortunate event that deprived the national exchequer by Rs. 6.3
billion according to ARD’s whitepaper and Rs. 5 billion according to
PPP’s whitepaper was the referendum. The rallies arranged for a military
dictator to herald his political career on public expense were the
unique example of the misuse rather abuse of the public money by a
government. That gentleman who used this public money for his personal
benefits still claims that he is innocent! If he is innocent then
innocence may have acquired different meanings in Webster’s dictionary. 

Had we access to the petro-dollars, we could have overlooked this
extravaganza of the military rulers. Since each and every rupee in the
national exchequer comes from the hard-earned money of the people of
Pakistan, we should not ignore this big fraud. Now it is the obligation
of our leaders to collect and document all the details of this massive
abuse of our finances so that the people responsible for this could be
brought to justice when it is possible. Issuance of the whitepapers are
not enough, they would have to take some legal steps to punish the
plunderers of the national treasury. 

It was not all. Soon after the referendum, the military government
increased the prices of gasoline. In a short span of time of four weeks,
the oil prices were increased twice. The price increase was made at a
time when the prices in the international oil markets were going down
and thus there was no justification to add insult to the wounds of the
people in Pakistan. But, the financial managers of the military
government are not concerned with the people. They need big figures to
show their performance and arrange the finances for those who really
matter in our setup. 

Another example of the use of public finances for political reasons came
last week when the federal government suddenly stopped the payment of
Rs. 1.20 billion to the city government of Karachi, the largest
cosmopolitan city of the country. No reason given, no justification
offered, but a hint was dropped to Nazim Karachi Naimatullah Khan that
it was the result of his non-cooperation to the self-appointed President
in his referendum. 

This blow forced the city government to stop removal of garbage in many
towns and thus those who are ultimately suffering this politically
motivated abuse of authority by some of the reckless people in the
federal capital are the common citizens whose tax money provides the
means to have armies of guards and luxuries in the palaces in the
capital. 

Pakistan has failed in achieving the targets of revenue despite the fact
that these targets were revised at least four times during the current
fiscal year because of the setbacks to the national economy after
military government’s “U” turn on Afghanistan and then the war mongering
form across our eastern borders. It is a fact that the financial
performance of the military government was as bad as its foreign policy
or the approach of “having no policy.” World Bank President James D.
Wolfenson during a visit to Pakistan stressed that Pakistan should set 5
percent growth rate target to dent poverty and create more jobs while
the current growth rate is less than 3 percent. 

Gone is the era when the foreign loans could help build the economy of a
nation. Now the foreign loans are merely a mean to control the poor
countries. World Bank and IMF is facing wrath of the people all over the
world because of their policies that widened the gulf between rich and
poor states in the world by making poor nations even poorer and rich
nations richer. 

Our recent history shows that the foreign loans were never used for the
industrial or economic growth. These loans were mostly misappropriated
by the engineers, bureaucrats, politicians, generals and our financial
managers. What the nation got was the liability to pay back these loans.
One gets offended when some policy maker or commentator heavily
influenced by the theory of “white man’s burden” conveys us that
Pakistanis would have starved to death had the US, World Bank or IMF not
given them loans or aid. Perhaps they forget that these loans are given
to keep their favourites in the power in Pakistan and the common people
do not get any benefit from these millions rather billions of dollars. 

Since the foreign loans offer lucrative kickbacks to the officials, the
bureaucracy would never say “no” to any loan offer irrespective of the
harsh conditions and rate of interest. The only exception was the
Honourable Chief Justice of Lahore High Court Mr. Justice Falak Sher
who, a couple of months ago refused a loan of US$ 0.5 million from Asian
Development Bank for judicial reforms in Punjab. When he was asked by
the Ministry of Finance to accept the loan as they got it after putting
in lot of efforts, he refused flatly saying that he did not want to add
any more burden of foreign loans to the nation. 

His example shows us the path that we should take to get rid of the
foreign loans. Let’s join together and campaign for “No more foreign
loans!” 

Source:  Balochistan Post
 

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