ISLAMABAD : The Islamabad Chamber of Commerce and Industry has shown greatconcerns over the constant rise in foreign debt which has increased by morethan 41 percent during the last four years and called upon the governmentto focus on generating indigenous resources to reduce heavy reliance onforeign debt as the increasing foreign debt would further hike the cost ofdebt servicing and constrain the economic growth of the country.
Sheikh Amir Waheed, President, Islamabad Chamber of Commerce and Industrysaid that foreign debt of Pakistan was around $ 60.9 billion in 2013, whichhas gone up to $ 85 billion by September 2017 showing an increase of over41% during the last four years. He said the constant rise in foreign debtwas the major cause of poverty and under-development in the country asPakistan was spending about 65 percent of its revenue on debt servicing.
He said after debt repayment, the country was left with very insufficientfinancial resources to spend on defense, health, education, development andprivate sector credit.
He said the further accumulation in foreign debt would weaken economicfuture of Pakistan as rising debt would consume major portion of futurebudgets leaving meagre resources for economic development of the country.
He said Pakistan’s foreign debt was just around $3 billion by December1971, but it was unfortunate that over the last 46 years, foreign debt hasregistered a phenomenal increase of over 2700 percent. It clearly showedthat our successive governments have contributed to make Pakistan one ofthe highly indebted countries as the economic growth of the country nevermatched with consistent rise in foreign debt. He said it was the need ofthe hour that Pakistani authorities should reorient economic policies andfocus on indigenous resources for the development of the country.
Muhammad Naveed, Senior Vice President and Nisar Mirza, Vice PresidentIslamabad Chamber of Commerce and Industry said that if the trend ofrelying on foreign debt to run the affairs of the country was not curbed,the Pakistan would have to obtain more loans even for debt repayment. Theystressed that the government should take urgent measures to generateindigenous resources and arrest the unhealthy trend of rising foreign debtas it has multiple negative effects on the economy.
They said the continuous rise foreign debt would squeeze funds for privatesector credit, affect industrial and investment activities, increasepoverty and unemployment and impede economic development of the country.They urged that government should focus on creating enabling environmentfor better growth of business & investment activities and facilitatepromotion of exports so that country could generate more indigenousresources and get rid of heavy foreign borrowing.
Orignally published by NNI