‘You can have pound of flesh but cannot draw blood’. These are the lines from the 16th century play ‘Merchant of Venice’ written by William Shakespeare. He covered the topic of debt five centuries age. As Antonio the merchant missed the deadline to pay back the loan, Shylock the Jew insisted on pound of flesh even though he was able and willing to retire the debt by that time. The judge ruled against Shylock on the basis that he desired to spill Christian blood. His wealth was confiscated. Half of it came to Antonio while the other half went to the national exchequer. Antonio being a true gentleman and honest trader returned his portion to his tormentor.

Most of the debt driven economies of the 20th century never made it. The ‘Shylocks’ got them. People’s Republic of China (PRC) started in 1949, two years after we won our freedom. The Chinese did not borrow; they learnt to live within their means. Today they have one of the largest surpluses in the world with record investments in human and infrastructure development. While there are more billionaires in Beijing than in New York yet the state has record revenues which are re-invested for common good.

In Pakistan till 1958 the focus remained on common good. Like China we too were debt free. The first usurper brought Muhammad Shoaib from the World Bank as his finance minister. He gathered the other ‘Sharks’ of Pakistani origin. Suddenly from living within means we started to go beyond. Debt was distributed as dole as it was considered free money never to be paid back.

My father’s uncle (Khalu) Dr. Anwar Iqbal Qureshi who was perhaps the senior most economist of his times retired from IMF to be appointed Economic Adviser to the Government of Pakistan. The usurper interviewed individuals before appointing them. I remember Dr. Qureshi came to Lahore from Karachi on way to Rawalpindi, Islamabad was not ready by then. He stayed with us. There was an after dinner discussion in which he highlighted the salient features of debt driven economy for fast track development.

Coming from a family of honest entrepreneurs my father pointed out the perils of debt as it clashed with the family principles of interest based finances. With debt came patronage, kickbacks, protection, monopolies and permits for the favoured few. My father held his ground of merit based debt free gradual growth instead of fast track loan driven development.

With easy money came corruption. Greed took over, instead of basic industrialization like steel making and fertilizer complexes focus shifted to luxury items. A few families were able to monopolise the nation’s financial resources. State Bank looked the other way when Saigols, Habibs and Adamjees could collect public money through scheduled banks and insurance companies and invest in their own ventures.

Finally the bubble burst. The dictator had to resign in March 1969. In the crisis that followed Quaid’s Pakistan was dismembered. Bangladesh emerged on the world map. They decided on a new economic order. Professor Muhammad Younas came up with the concept of micro financing for the less privileged segments of the society. In the western wing the socialist government of Zulfiqar Ali Bhutto (ZAB) established the Board of Industrial Management (BIM) under which basic industries were established. Pakistan Steel Mills, National Fertilizer Company, Heavy Industries Taxila, Pakistan Aeronautical Complex Kamra and Revamping of Pakistan Atomic Energy Commission took place. The borrowing was drastically cut down during this period (1971-1977). During the Zia dark ages as dollars poured in for dirty jobs debt remained within control. In the last ten years (2008 to 2018) the floodgates of debt were opened to drown the nation. What Ayub Khan had started in 1958, both Nawaz Sharif and Zardari maximized it. From around $34 billion in 2008 the external debt now has crossed $90 billion. Without a major change of direction, the economy cannot be put back on track.

Spoiled by easy money our expenses have become unmanageable. After debt servicing and security nothing is left for other areas. With collapsed institutions revenue generation is an uphill task. Kaptaan has a clear vision of debt free Pakistan as it was till 1958. The ‘Shylocks’ want their pound of flesh. Shedding of Christian blood saved Antonio but who will save us?

In the recent past several countries have been able to come out of the debt trap. Soviet Union era debt of $22 billion has been paid off by Russia after seeking a moratorium. Argentina followed a similar course. Iran neutralized its $20 billion debt through strict austerity measures and its oil enhanced revenues.

Forensic audit of debt has to be carried out. Kickback driven projects like the Orange Train in Lahore have to be revisited. Subsidies have to be withdrawn together with perks. Under an Economic Emergency austerity has to be introduced across the board. The energy sector is in a big mess. Both exports and revenue has to be increased manifold. Retirement of debt should start right away from this IMF programme. Great hopes are pinned on Shabbar Zaidi to transform the non-performing FBR into a vibrant entity. Both Dr. Hafeez Sheikh and Dr. Reza Baqir are international financial gurus, the nation expects them to take us out of the debt trap laid by the likes of ‘Shoaibs’ of Ayub era.

Since 1958 a lot of water has flown under the bridge. The after dinner discussion on our dining table in the sixties is still fresh in my mind. My father’s arguments for a debt free economy stands vindicated while the IMF driven doctrine of his uncle has trapped us. Short term measures cannot provide long term relief. The proposal of Sarmaya Pakistan Company is sound as it will protect the nation’s investments. The Defence Production Establishment has great potential which must be exploited for technology based development and exports. The approach of stripping public sector assets for lowering their resale value has been disastrous. After sixty years of economic mismanagement and detours, Pakistan yet has the potential to emerge as an Asian Tiger. My father the Tehrik-e-Pakistan Gold Medallist, honest businessman and resilient entrepreneur had a lot of hopes in the new land when he crossed the Wagah border at the age of 27 leaving behind flourishing watch and hosiery business. He summed up his struggle with the following words, “ I could have amassed a lot of wealth together with a few factories had I played by their rules. Instead I followed my own principles of honesty, integrity and interest free financing. At the end of my journey I have no regrets; all my five children are well established in life. I pray for the growth and stability of the motherland for which we struggled with our sweat and blood. Pakistan should build strong defences against external and internal threats”. Now that security threats have been overcome, the focus has to shift on economic emancipation which calls for re-engineering of our economy.