ISLAMABAD - The Islamabad Chamber of Commerce and Industry (ICCI) has expressed great concerns over the rising external debt and liabilities of the country that have soared to a record level of $91.8 billion by the end of March 2018 as per SBP’s latest report. External debt and liabilities of the country have shown an increase of over 50 percent during the last four years and nine months. The ICCI has called upon the government to take urgent measures to reduce the country’s dependence on rising foreign debt as it would create more problems for the economy.

Sheikh Amir Waheed, president of Islamabad Chamber of Commerce and Industry, said that the previous government had resorted to heavy borrowing to meet the current expenditures and run the affairs of the country. It was expected that the current government would curb this unhealthy trend by devising a new strategy. However, starting from July 2013, with every passing year, the quantum of external debt kept growing due to the government’s inability to implement policies that could have ensured sufficient non-debt creating inflows like FDI and exports promotion. He said due to the imprudent policies, the external debt has gone up from $60.9 billion in 2013 to $91.8 billion showing an increase of over 50 percent.

He said the current government has acquired a whopping $30.9 billion in external loans during its tenure, which was taking its toll on the national exchequer due to the mounting debt servicing cost. He cautioned that if this trend was not curbed immediately, the external debt would soon touch $100 billion that would create grave challenges for the economy. He stressed that government should reset its priorities and take urgent measures to reduce the country’s reliance on heavy foreign borrowing as rising debt servicing obligations would put great strain on the foreign exchange reserves and affect the pace of economic growth of the country.

Muhammad Naveed Malik, ICCI senior vice president, and Nisar Mirza, vice president, emphasised that the government should focus on promoting business activities and exports in addition to broadening the tax base. These measures would enhance indigenous resources of the country and reduce its dependence on foreign borrowing. He said for this purpose, government should address all key issues exporters on priority basis and help private sector in identifying new markets for exports that would help in improving forex reserves and enable the country to get rid of external debt and liabilities.