We are protecting our land, air and sea borders for which we have been spending billions of Rupees. We have to spend huge funds on the imposed war on terror, but we have been consistently ignoring our economic borders since 1951.
Pakistan was born in 1947 as the largest Muslim country that came into being with unprecedented sacrifices of the people from all walks of life. The Pakistanis were happy to have their homeland where they would have the freedom to work and have prosperity as they got rid of Hindu domination and English colonial rule. The displaced people having lost their dear ones had only one satisfaction, which was the feeling of having their own beloved country and sole identity as Pakistani.
The father of the nation started to lead, and he was determined to make the nation as a strong leading nation. During the struggle, his health could not allow him to complete his mission. The murder of PM Liaquat Ali Khan brought a further set back to the country, and the state started facing both administrative and political issues.
We want to compete in the world economic race as the country had all the major ingredients necessary to become a developed nation; it has a geo-strategic location, vast deposits of natural resources and a large population in the working age. There are countries that got independence after us and had much lesser resources than us, yet they are now a part of world’s major economies. Israel, South Korea, Malaysia, China, Japan, UAE, Russia, Singapore, Hong Kong and India are countries in roughly the same region as Pakistan. All of these countries came into being around the same time as Pakistan. All of these countries have a higher GDP (Gross Domestic Product) than that of Pakistan, 283.7 billion USD, and all of them are ranked higher in the Human Development Index (HDI) as well. A glance at the GDP of the nations mentioned above will make the comparison more nuanced. Israel’s GDP is 318.7 Billion USD. China has a GDP of 11.2 trillion USD. GDP of South Korea is 1.411 trillion USD. Malaysia’s GDP is 296.4 USD. Japan’s latest calculations in this regard are 4.939 trillion USD. UAE has a decent GDP of 348.7 billion USD.
The comparison shows that their progress as compared to ours is much higher and speedy. The main reason for us to keep losing the growth as compared to other countries seems to be the balance of repayments of foreign aid. Pakistan is to repay the $6.5b debt over next 15 months, as the chain of taking loans started in 1952 and never stopped since then.
What happened to us right after independence? What were those factors, which kept on deteriorating our national economic growth status and our economy? Let us take few factors, which affected us adversely including the incompetency of Governments and their finical teams coupled with many other crises that led to our failure since independence.
Firstly, right after independence our neighbour India never left a single chance of striking us on every front. India gave a blow to our sovereignty by supporting Mukti Bahni with funds and its forces, leading to the tragedy of East Pakistan. Moreover, factors like the illiteracy rate, growing unemployment, energy crisis, inflation, and terrorism have been acting as major hurdles to our economic progress. The lack of proper strategizing of our actions according to the need of the time and looked towards the international donors rather than dependence on domestic resources. We have been continuously ignoring our agriculture sector, mineral rich regions, and water resources.
Strategically, President Ayub played in hand of CIA by handing over Badhaber airbase to Americans against Russian which was the first mistake on the part of our Government. Landing in the laps of the USA against Russia was the beginning of our economic and political control by CIA as its operators through their agents crippled our independent decision making.
The American ensured that our key quotients like grains/ petroleum products and Indian animosity were played to increase the American dependence and increase in defence import yet the USA did not come to help when Pakistan was under attack in 1971 resulting in the creation of Bangladesh.
Mr. Zulfiqar Ali Bhutto came into power at a time when the East wing of Pakistan had fallen to become Bangladesh, and the whole nation was in the demoralised mode. He got engaged to stabilise Pakistan. The worsening of the economy, however, continued and even the successive governments did not plan anything about repayments of our debts and imported Finance ministers could not give the Nation debt retiring plan due to poor foreign and financial policies. Instead, every finance minister of every successive government felt pride in getting further loans from the IMF and world bank, and it was tragic that even the finance teams floated bonds and FRBC backed by the Foreign loans. The same practice is continuing till today.
I, having served five years as a cabinet minister and as a Senator had always been hearing, both in the cabinet meetings as well as in the Upper House, the finance teams boasting of securing loans but never talked about having an efficient debt retirement plan. I am on record asking the government as to why there is no retirement plan? I remember a conference in Serena Islamabad on Pak Economy on the support of friends of Pakistan where I raised the point to help Pakistan by retiring our debts as this war on terror has adversely affected us. One of the senior members opposed my demand saying that: “here we are building the grounds for more loans and you are inflicting it with debt retiring programme”.
I was never happy with this growing load of loans, which were contributing towards rising inflation, budget deficits, debt servicing and balance of repayments and directly affecting our economy and sufferings of an ordinary man are increasing. This uncertain economic situation is not a happy sign for local growth and foreign investment to our country. The Nation has full right to ask the finance team of the government to explain the debt retirement plan if any?
Moreover, both private and public sector banks were looted by the businessmen as well as by the businessmen turned politicians adding to the miseries of the nations. Loans secured from these banks worth billions of rupees were either not repaid or got written off.
We stand today far behind other developing nation due to our poor short-term fiscal policy, loan based budgets, small tax base, fudged figures based on five years plans, the balance of repayment issue, political instability and bad governance with uncontrolled corruption in public and private sectors. The successive governments have always preferred to give development funds to their MNAs and MPAs to solidify their vote bank. They would prefer to invest in those projects which could fetch them instant publicity with prominent pictures on the front page and TV advertisements during prime time but never thought to first get rid of our debt by diverting such funds to the national debt retirement program.
We cannot join the international race of prosperity unless we sort out our ground issues and I feel that our nation can still recover from this unfortunate situation and catch the missing bus of prosperity if we take the following steps:
• Divert at least 50 percent development funds for next ten years to debt retiring plan.
• A complete ban on development funds to the MNA and MPAs.
• No further loans from IMF and World Bank and other donors come what may.
• Create a “Pak Property Overseas Bank” for overseas Pakistani only to participate in the National Debt Retiring Plan. The government should invest $ 3billion in this bank and sell the 49 percent shares in dollars to the overseas Pakistanis.
• 75 percent directors of the board should be from overseas Pakistanis, and the other 25 percent should be from Government/ private sector, and it should be under Parliament oversight to give confidence to the overseas Pakistanis.
• The said bank should create a consortium of Chinese and Turkish banks, and this consortium should take over half of the Debts on mutually agreed terms with Pakistan.
• Overseas Pakistanis must be given attractive incentives in investments/interest based income/property development in Public-Private Partnership through this bank. This will generate billions of dollars, which will go towards the retirement of national debts.
• The government should also announce its debt retirement plan integrating the above proposals.
• Every province should contribute at least five properties to be sold to overseas Pakistani and amount should be deposited towards debt retirement.
• Parliament should formulate a strategy for National debt regiment programme and set time to get rid of the loans following the Turkish Model. A bill should be presented in the house for legislation under the name of “National Debt Retirement Act”, containing law with a time limit and backing of constitutional provisions to retire the national debt and to require all the stakeholders to participate in the process of retiring foreign debts. The participation should be based on the principle of shared equity. The Act must also contain provisions to ensure the protection of the investments of overseas Pakistanis.
We need to fight for our Economic borders as strong economy can only defend our geographical boundaries by the provision of modern technology as the future is of the advanced technology and there will be hardly any room for conventional wars. Hence we need to make our economic indicators stronger to make our nation stronger and invincible, and it is possible only if we generate strong economic efforts through the right fiscal policies with the help of capable economists to drive the nation out of the crisis. The government, in fact, needs to look into its fiscal policy and bring incentive-based policies to attract the overseas investments by its own sons of the soil abroad for this bank.
We have already lost 70 years, and we are still unable to build a prosperous and uncorrupt Pakistan for our present and future generations. We now at least must take practical steps to set the right economic and planning courses and give something to our new generation instead of providing the atmosphere of disappointment. Let us work collectively for their prosperity instead of hollow slogans for our vote bank. We have already missed the bus of prosperity. Pakistan needs to wake up and choose a right path to make itself stand tall among developing nations.
Let us all rise above politics and help our country Pakistan which needs our collective efforts to bring it back to the trail of prosperity and arise as a proud nation. Let us shed our dead weights and get rid of the economic shackles of international financial institutions. We have to get rid of loan-based developments, and even our CPEC project is also based on long-term loan, which one day has to be retired. Our foreign reserves are depleting, and if we keep on taking loans any further, our future generations will find themselves under heavy debt and they will have to suffer for no fault of theirs.
There is going to be no divine help as we are the only one to rise ourselves and get rid of this alarming national economic issue. I have jotted down my humble vision and proposals to overcome to stop the eruption of this economic volcano.
I will propose an Act under the name of “National Foreign Debt Retiring Plan” and will make it public for people’s input before tabling in the House.
The writer is a PPP Senator, former Interior Minister of Pakistan, and Chairman of think tank “Global Eye” and Senate Body on Interior and Narcotics.