The Islamabad Chamber of Commerce and Industry has shown great concerns over the constant rise in foreign debt which has increased by more than 41 percent during the last four years and called upon the government to focus on generating indigenous resources to reduce heavy reliance on foreign debt as the increasing foreign debt would further hike the cost of debt servicing and constrain the economic growth of the country.
Sheikh Amir Waheed, President, Islamabad Chamber of Commerce and Industry said that foreign debt of Pakistan was around $ 60.9 billion in 2013, which has gone up to $ 85 billion by September 2017 showing an increase of over 41% during the last four years. He said the constant rise in foreign debt was the major cause of poverty and under-development in the country as Pakistan was spending about 65 percent of its revenue on debt servicing.
He said after debt repayment, the country was left with very insufficient financial resources to spend on defense, health, education, development and private sector credit.
He said the further accumulation in foreign debt would weaken economic future of Pakistan as rising debt would consume major portion of future budgets leaving meagre resources for economic development of the country.
He said Pakistan's foreign debt was just around $3 billion by December 1971, but it was unfortunate that over the last 46 years, foreign debt has registered a phenomenal increase of over 2700 percent. It clearly showed that our successive governments have contributed to make Pakistan one of the highly indebted countries as the economic growth of the country never matched with consistent rise in foreign debt. He said it was the need of the hour that Pakistani authorities should reorient economic policies and focus on indigenous resources for the development of the country.
Muhammad Naveed, Senior Vice President and Nisar Mirza, Vice President Islamabad Chamber of Commerce and Industry said that if the trend of relying 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. They stressed that the government should take urgent measures to generate indigenous resources and arrest the unhealthy trend of rising foreign debt as it has multiple negative effects on the economy.
They said the continuous rise foreign debt would squeeze funds for private sector credit, affect industrial and investment activities, increase poverty and unemployment and impede economic development of the country. They urged that government should focus on creating enabling environment for better growth of business & investment activities and facilitate promotion of exports so that country could generate more indigenous resources and get rid of heavy foreign borrowing.