The Economic Treason With Pakistan..!

Wake up Pakistan : Jaag Pakistan Jaag

Latest update about the ever worsening economic foundations of Pakistan from a news item titled “Rs4 trillion bonds may deal a blow to economy” published by the daily “Dawn” dated April 12, 2015 quoted as below:

Quote.”The high-yielding long-term Pakistan Investment Bonds (PIBs) could deal a blow to the economy as volume of bonds crossed Rs4 trillion on March 31, the State Bank reported on Friday.

As over-dependence on PIBs hurts, and borrowings piles up domestic debt, it cripples the banking system, compromising its capacity to serve as an important institution for development of economy.

The banks’ rising profits are the direct outcome of government’s debt servicing. Another report of State Bank said the government had to pay Rs746bn as debt servicing during July-Jan FY15.

The amount can easily cross Rs1.2tr in the remaining five months, a huge burden on economy struggling to contain its fiscal imbalances.” Unquote.

(Kindly peruse below an OLD but still very relevant article on the economic downslide of Pakistan, where now we are forced to take fresh loans, to repay the old loans, which in economic terms is NOT virtual, but REAL bankruptcy).

This has reference to the news item of 01 December 2012, by Mehtab Haider titled “Total debt scales Rs.14.5 trillion mark” published by the daily “The News” link :- http://www.thenews.com.pk/Todays-News-3-145837-Total-debt-scales-Rs145-trillion-mark

The gist of the above reveals the extremely precarious economic situation of Pakistan, as below.

1. Pakistan’s public debt and liabilities crossed Rs.13.5 trillion by end-September 2012, as per SBP data released on 30 November, 2012. However, a closer look reading of the data showed that the size of total debt is Rs.14.5 trillion.

2. According to SBP data total debt and liabilities at end of September 2012, touched $66.24 billion.

3. BY THE END OF JUNE 2012, PAKISTAN’S DEBT-TO-GDP RATIO STOOD AT 61.5%.

4. According to the former economic adviser Dr. Ashfaque Hassan Khan. “Even now, interest repayments are consuming 56 percent of the FBR’s revenue. And these unsustainable levels of public debt will be a burden on future generations who will service this debt through exorbitant taxation.”

5. Analysts say that irresponsible fiscal management, sharp depreciation of the Rupee (from Rs.60 to a dollar to Rs.97 to a dollar – in the last four years) and low economic growth, have caused the surge in public debt.

In view of the foregoing, it is clearly evident that we have reached a stage, where even alarm bells ringing time has passed. The economy of Pakistan is not sinking, it has already sunk. Imports are more than the double of the exports. Foreign exchange reserves are fast depleting.

However, what is very alarming and strange that the entire government and the parliament is silent over the issue, as if, they are in collusion with each other, on (God forbid) this virtual economic demise of the country. Otherwise, at least a single person from the entire parliament would have raised his voice, over violation of the binding on the government, for not exceeding the debt-to-GDP ratio over 60%. (Please refer para 3 above).

We should remember that USSR was not dis-membered due to the violation or collapse of its geographical boundaries. Rather, it was the collapse of its economy, which destroyed a superpower overnight. The USSR broke down without firing of a single bullet, just due to its economic melt down. If, even at this later stage, patriotic Pakistanis won’t raise their voice over this virtual economic collapse of the country, then be ready, history will never forgive us, for our collective Harakiri. No amount of military or nuclear power, can save a nation from its demise, due to the economic collapse. Yes, collective will power of its people, can save a nation from any crisis, but that too if the people are are not too late, as time and tide waits for none.

Although, Pakistan is in a perpetual state of war, for more than a decade yet, the government never acted in a manner, that would reflect even slight realisation on its part, to make its expenses in a more prudent manner. No economy measures imposed to either reduce the size of the bloated cabinet, stop payments of foreign exchange to top government functionaries who are entitled for such perks, or even restrict purchase of new cars etc. This is extreme callousness with the nation. On the other side, high and mighty are enjoying benefits which even a rich country like Switzerland, can not afford to its VIP’s, for example allowing instalment payment of power bills of their factories, over a period of 2000 YEARS. The Pakistani VIP class is enjoying such facilities and benefits which even the Queen of England would envy.

Now business as usual can not be continued.

The economic treason with the state of Pakistan, by all the concerned, looks like a fit case for the patriotic people in the government, opposition (in and out of parliament) and the entire civil society, to demand the immediate formation of a very lean national government, which should impose an economic emergency and also take necessary action on the question that “why all the concerned remained silent when the debt-to-GDP ratio exceeded 60%, that too, five months back on 30 June, 2012.” Don’t forget when the same problem was faced by the US government, even the salaries were not paid, till such time, President Barack Obama, got approval from the law makers, for enhancing the expenditures limit.

It will not be out of place to end this note with quote of the Midwestern tycoon Warren Buffett, who once gave an easy solution to America ’s debt problem on CNBC:
“I could end the deficit in five minutes. You just pass a law that says that anytime there is a deficit of more than three percent of GDP all sitting members of congress are ineligible for reelection. “

Tags: My Views