Since the establishment of Pakistan, the Government of Pakistan (GoP) has borrowed, which began with the first request for financial assistance from the United States. Since then, we have never looked back and amassed billions of dollars in loans and debts. Currently, we have reached the stage where, even to pay the interest on accumulated loans and debts, we must seek more loans. Thus, the GoP and its people are now caught in a vicious trap, and ordinary people sense that a fate similar to that of Sri Lanka awaits us.
In contrast, the Pakistani elite borrowed from the Pakistani government without any sense of guilt or remorse. An ordinary citizen, when applying for a personal home loan, must sign a bundle of papers, provide guarantors and guarantees, which are forfeited if a few installments are missed. And, we’ve rarely heard if ordinary citizens have their home loans canceled or written off.
However, the elite borrowed billions of rupees, with minimal collateral and guarantees. And many of these loans have a history of abuse, with no one held accountable or punished. At other times, these loans have been canceled politically, using discretionary powers, such as political bribes. So the irony is that while the GoP is borrowing from other countries and international lending institutions at high interest and compromising state sovereignty, the instigators of our system have gobbled up those loans – intended for the welfare of the general public, for their own avarice and greed.
Additionally, new and innovative ways have been devised to steal from the GoP and its people. And to add insult to injury, legal cover and protection has been provided for these major scandals. A glaring example is IPPs, which have sovereign guarantees. Among the terms of the contract with the GoP, the government will pay these IPPs whether or not they use their generation capacity, and the payment will be in dollars, putting constant pressure on our foreign exchange reserves, which we are continually trying to buttress. through loans from international institutions and friends. In addition, IPPs have been installed beyond the national transmission capacity; and to make these IPPs work, you need oil that has to be imported, which increases our import bill and puts a strain on foreign exchange reserves.
Thus, the GoP and its ordinary citizens have been exploited with impunity and no one has ever been held accountable for it. Currently, the government is increasing utility charges to pay IPPs their pound of flesh; and instead of removing inefficiencies from its institutions, it levies more taxes to cover the inefficiencies that fuel inflationary pressure, making the lives of ordinary citizens miserable. Instead, the government should look for ways to increase the tax base and provide investment opportunities for the working class on their personal savings. Additionally, he could go for the “bold move” of recovering canceled and canceled loans and renegotiating forex-based contracts with IPPs. Finally, the people of Pakistan should seek to end the discretionary powers of rulers and political representatives – a carryover from colonial times, which was used to pamper the lackeys of the Raj, and is now being abused to bestow favors for gain and personal goals.
The author is a freelance columnist.