Till October 1958, Pakistan was debt-free. As a nation, we lived within our means. There was simplicity and austerity. Today, the republic is mired in debt. Only the external component is around $140 billion. The entire federal budget is consumed by debt servicing and defence expenditure. There is no money left to run the gluttonous, non-performing state apparatus. Under the NFC (National Finance Commission) award, a major portion of tax money is transferred to the provinces. Even the IMF (International Monetary Fund), the lender of choice, has started imposing conditionalities before releasing funds. Loan, yes; leaving alone, no — it is indeed getting serious now.
Recently, I read the line: “Give me loan and leave me alone,” which caught my attention. This is the story of the Islamic Republic of Pakistan (IRP), where borrowed money has been squandered without a trace, as if there were no payback requirement. Easy money is the easiest trap to subjugation known to mankind for centuries. Once the debt burden becomes unpayable, debtor nations, organisations, and people invariably drown, never to stand on their own feet again. The crippling effect is incurable.
Perhaps IRP is the only country in the world where individual debt has become the nation’s burden. Those who borrow do not pay back. Loan write-offs are common, along with defaults. Then there are kickback projects built on borrowed money with no framework for repayment. The IMF has recently observed that there is no check on government spending. There is no parliamentary oversight or debate; only procurement rules are defined, while need assessment and loan retirement are not considered. The government of Muhammad Khan Junejo imposed a 1000 cc restriction on all official transport. It was a major move that rationalised government spending. For a debtor nation, it made good sense. Then we started assembly of Japanese automobiles with a clear roadmap for deletion or local manufacturing, but unfortunately, even after four decades, the programme has failed to deliver. The import bill runs into millions and needs to be drastically cut down. Driving luxury automobiles on borrowed money is indeed shameful.
When it comes to finances, the golden rule is that money must be earned before it is spent. The Shylocks of our time have devised all kinds of traps to throw cash at gullible people. While still a student in Arizona, I received a letter from a local bank. In those days, banks could only operate within state boundaries to limit financial control, but later this restriction was removed. I was offered a credit line of $5,000; there were loose cheques that could be cashed. It was a very upbeat communication which read: “Congratulations, very soon you will be graduating. In your career, you have the potential to earn $5 million. Why wait? Fulfil your dreams now.” Those who accepted this offer spent the rest of their lives in an uncorrectable debt trap. In 1958, it was the Field Marshal who led the nation into this quagmire under the banner of fast-track development, which in fact proved to be an entrapment.
Debt is a major fault line for the republic that needs to be corrected. The choice is between moratorium and default, or a combination of both, but business as usual cannot continue. There should be a parliamentary committee for debt control. All future borrowing should be stopped in the next budget starting July 1, 2026. A five-year suspension of interest payments should be negotiated with lenders. The balance of payments has to be achieved. The import and export bills have to be lumped together and tracked. There has to be a massive cut in state expenses.
Those who signed on the dotted lines, and continue to do so, cannot be left alone. Every borrowed rupee since 1985 should be accounted for. Written-off amounts should also be documented and made public. This game of hide and seek must come to an end. The term used is ‘Lutto Tay Phutto’. There is a famous Punjabi saying: ‘Those who devour carrots cannot escape pain in the stomach.’ Waistlines cannot be hidden; only a small glance is enough to notice them. Let the search begin — what are we waiting for? IRP is no longer financially viable. The debt bulge is ready to explode. This ostrich approach has to end. In Urdu, the bird/beast is called ‘Shutter Murgha’. While it is classified as poultry, it is cooked as beef. It is a flightless bird which cannot hide because of its size; as such, it is easy prey that can be hunted like cattle. Iqbal gave the concept of ‘Shaheen’, the self-reliant bird that flies high. Debt has affected our flight; the perpetrators cannot be left alone any longer.
