flood increased helplessness
In Pakistan, which is recovering from the hit of the Covid-19 pandemic, the severe floods not only submerged the land but also its shabby economy. According to a new study conducted by the Asian Development Bank Institute, the country’s debt has become a perpetual debt. Pakistan is saddled with a debt trap that is affecting its import-based economy and will have far-reaching economic and social consequences. Pakistan’s external debt and liability is about US$130 billion, which is 95.39 percent of the gross domestic product (GDP).
have to return 80 billion dollars
Pakistan, facing financial crisis, has to return about $ 22 billion in the next 12 months and a total of $ 80 billion in three and a half years, while its foreign exchange reserves are only $ 3.2 billion and its economic growth rate is only two percent. At present, Pakistan is using almost half of its central budget to repay the loan. Although the Government of Pakistan has made various efforts to reduce the debt burden, it is not enough in the background of skyrocketing inflation. Pakistan’s massive debt burden is the result of harmful policies and pressure on economic imbalances, etc.
there should be no delay in measures
To deal with this, Pakistan has been increasing its dependence on various economic cooperation and loans, including 22 programs of the International Monetary Fund. Successive governments that have held power in the country have failed to make any structural reforms to get Pakistan out of the debt trap. Short term measures can only avoid the current situation, while Pakistan is in dire need of long term structural reform measures. If the country is willing to protect itself from future defaults, it must end the special privileges before it is too late.