Public Debt

Public Debt – in simple words total of Domestic and External/Foreign debt. Almost every country in the world borrows money [Domestically & External] regardless of whether the country is rich or not.

Is borrowing wrong?

There’s nothing necessarily wrong with borrowing as long as it is to be use for development purposes and one is able to pay the money back on-time as agreed.

Taking loan is like; using future money now. For example, you buy plot/house/machinery now on loan, it may take you 5-10 years to repay the loan amount. But what after 5-10 years? In future rate you paid very less compared to new rate/growth/market-value. You went through some difficult times but it saved you a-lot of money & you reaped the financial benefits.

Debts, which are used for development purposes [rails/roads/health/education/ energy & security] which increases the productivity of economy, increases revenue, raises socio-economic status & increases GDP is a good debt. It’s all about using it wisely.

Many of us have the misconception that only poor countries borrow money and considers borrowing countries as failed states. Let’s have a look at countries and their share in total debt.

debt percentage.png

US, Japan, China, Germany, Italy, France, UK, Canada, Brazil & India alone shares 80.2% of the total world debt.  Do we consider these countries as economically failed states? In comparison to other countries of the world Pakistan’s share is only 0.5% of the total world debt.

I’m confused that either people really don’t know the facts or they simply misquote/spread misinformation just because they oppose that government. Let’s have a look at where we were, where we are today, which government did what & who’s to be blamed.

public debt pkr  final

An increase of 16906 Billion Pakistani Rupee since 1971, share of governments:

1971 – 1977: Z A Bhutto, PKR 30 bln. To PKR 97 bln.

1977 – 1988: Zia ul Haq, PKR 97 bln. To PKR 523 bln.

1988 – 1990: Benazir Bhutto, PKR 523 bln. To PKR 711 bln.

1990 – 1993: Nawaz Sharif, PKR 711 bln. To PKR 1135 bln.

1993 – 1996: Benazir Bhutto, PKR 1135 bln. To PKR 1995 bln.

1997 – 1999: Nawaz Sharif, PKR 1995 bln. To PKR 2946 bln.

1999 – 2008: Musharraf, PKR 2946 bln. To PKR 6126 bln.

2008 – 2013: Asif A Zardari, PKR 6126 bln. To PKR 14293 bln.

2013 – 2015: Nawaz Sharif, PKR 14293 bln. To PKR 16936 bln.

share of tenures since 1971

Pakistan is IMF’s member since July, 1950 and Pakistan started borrowing from IMF in General Ayub Khan’s regime so it’s not Asif A. Zardari or Nawaz Sharif who pushed Pakistan into this [as many of you call it] “Trap”.

The myth “Musharraf reduced Pakistan’s debt” must die, instead of debt forgiveness/relief against assisting US in war on terror [read: attacking Afghanistan]. Musharraf rescheduled the loan repayment to 15 years so that the future governments pay the due amount & a sharp increase in Public debt was seen in his regime [shown above].

Debt in Pakistan is rescheduled many times since early 70’s, it provides temporary relief to country to revive its economy but a burden for future governments if the necessary steps [revival of economy] aren’t taken, but; instead of reviving the economy funds were used for subsidies for political mileage.

debt rescheduling

***KNOW THE FACTS, MAKE A FAIR JUDGMENT***

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15 thoughts on “Public Debt

  1. So are you trying to say that the loan has never been paid even if the governments have a lifetime chance (by unjustly increasing oil prices in Pakistan – becoming a burden on an ordinary man’s life in the country) of paying the loan as well as the interest associated with the loan?

    I ask this because you haven’t mentioned anywhere in this blog post that much loans have been paid.

    Liked by 1 person

    • Thank you for reading the blogpost, i would suggest to kindly re-read it. how are you linking oil-prices “which you so love to call unjustified, actually is very just” with this post?
      this post was in response to “current government has pushed this country into debt trap…” the post only gives an opinion about debt, is it wrong?, who’s borrowing & how much?, which government did what & how did we reach here. that was the sole purpose of this post. kindly explain the link between this post and petrol prices or repayment.

      thank you

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      • There is a private post on facebook where your comments regarding tax and unjust oil prices are in-directly presented by a woman. Going into those details however doesn’t matter right now.

        So taking your words from this reply, you really believe that The government of Pakistan are not being a burden on an ordinary man’s pocket? The current Petrol price in Pakistan is supposed to be around Rs. 50.94/- but the government is charging 40% tax from petrol sales, becoming an extra Rs. 20/- burden on an ordinary man’s pocket when instead they should be devising a plan to increase the tax net and not become a burden on an ordinary man. This is called over taxing the general population.

        How can you (or even the government for that matter) justify the burden on an ordinary man’s pocket and not devise (or even suggest for that matter) a plan to increase the tax net? Does this sound reasonable? An ordinary man living in Pakistan will surely say that the government needs to implement better taxation policies than being burden on them.

        Furthermore, you still haven’t answered my question. How much debt has actually been paid? Do you have stats? Please do share if you do.

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      • I’m not aware of what facebook post you’re referring to anyways, it would’ve been easy for me to reply briefly if you could’ve explained “petrol price in Pakistan is supposed to be PKR 50.94” if I’m not wrong you referring to how much one liter cost to the government? if so, then yes you’re right one liter of petrol is costing government PKR 51.94.
        i believe you’re aware about the fuel charges, taxes, excise duties & VAT around the world?
        do you want me to compare petrol/diesel prices in Pakistan with other countries in terms of tax/duty/excise or selling price?

        I won’t get into tax-net and all as you too know it won’t happen overnight we should be realistic.

        I’ve the stats for IMF payments, we’re paying them timely. please tell me you’re not adding the figures of each year.

        Liked by 1 person

      • Comparing and justifying over taxation with other countries is not the correct answer since it looks like a race where we have to win. I am talking about fixing certain issues with our governments like over taxation of any kind where the government becomes a burden on the public. The only way over taxation can be justified is that the government uses that tax money to pay the debt but as we are all aware the government uses that money as well to run its luxurious expenses which should not be the case.

        Anyways, I asked for the stats because I don’t have then if you have those stats I would be very grateful for you to share them.

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      • governments be it N league, PPP, PTI or xyz I would support this until i as a citizen is getting relief unlike other countries (the countries which are more economically stable than us) anyone who knows what our fiscal deficit is would support & understand that why govt. is charging PKR 15-20/ltr.
        when it comes to other things we compare it to other countries when it comes to charging we don’t.
        tell me which year data (from-to) do you need will forward.

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      • Even tough this post is your opinion about debt… Please note that you are still favouring a select few parties and not blaming every government for the current debt situation……………. Which is exactly why your post looks biased for a few parties. Every government is responsible for the current debt situation of our beloved country.

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      • this post is only my opinion based on facts & figures & isn’t favoring any political party but simply showing where we were, where are we today. how is this biased? pointing which govt. increased the public debt how much? that’s biased? any tom-dick-harry can tell it was Musharraf’s era pointing that out is biased?

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      • If I requote your exact statement:

        Pakistan is IMF’s member since July, 1950 and Pakistan started borrowing from IMF in General Ayub Khan’s regime so it’s not Asif A. Zardari or Nawaz Sharif who pushed Pakistan into this [as many of you call it] “Trap”.

        No matter if its a General’s regime or a democratic president/prime minister, everyone is responsible as they all have taken loans from the IMF in their time of rule on heavy interests. All are equally responsible.

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      • exactly my point, now re-read that very line again in context to the TV programs & Social-media campaigns against N-league & PPP you’d know why i wrote that 🙂
        just mentioning facts, I’m not biased just realistic.

        Like

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