The Special Committee on Foreign and Domestic Loans was informed that the country was under a burden of Rs5.02 trillion foreign loans while domestic loans amounted to a huge figure of Rs7.6 trillion.
Member of the Committee Ahsan Iqbal, MNA, PML-N said that in 2008 total debt of the country was Rs5.5 trillion and now it has swelled to more than Rs12 trillion.
“This is a matter of grave concern, as this shows too much borrowing by the government without any proper mechanism and it is not fair with the future of country and the nation – it was Rs2 trillion in 1999,” he added.
“Country is relying heavily on loans from the multilateral donors like the Asian Development Bank (ADB) and these donors already having sovereign guarantees, are getting more in the shape of repayments with high interest rates than the amount they provide as loans,” said Iqbal.
Chairperson of the committee, Shehnaz Wazir Ali asked the officials of Economic Affairs Division for details of loans obtained by various governments since 1985.
The committee was informed that at average each government had taken $2.5 billion foreign loans annually, while it had been between $2.6 billion and $2.7 billion in the early 2000s but since 2008 the average foreign loan obtained by the government has been $3.5 billion.
While out of total foreign loans amounting to $59.24, the country had $46.46 billion as outstanding.
Till Junejo regime from 1985-88, the total foreign assistance received by the country was $6.37bn including $4.6bn as loans and grants of $1.7bn.
During the 1988-90, in Benazir Bhutto’s regime, $4 billion as foreign loans and $1.11 billion as grants were received by the country.
From 1990-93 during the first regime of Nawaz government, a total of $ 7.5 billion as foreign assistance including $6.1 billion as loans and $1.4 billion as grants was received.
From 1993-96, during the 2nd regime of Benazir Bhutto a total of $8.1 billion foreign assistance including $7.3 billion as loans and $ 804 million as grants was received.
The committee was told that in Musharraf regime from 1999-2008, $17.9 billion as loans and $5.06 billion as grants were received by the country while the current government has received the total foreign assistance of $14 billion including $11.6 billion as loans and $2.3bn as grants.
The committee also discussed the ever increasing domestic loans that have reached to Rs7.6 trillion.
“This is because of massive government borrowings from the State Bank and the private banks,” said Abdul Rashid Godil, MNA, MQM, adding, “Due to this policy the banks are not interested to lend to the private sector.”
He informed the committee that one banker told him that the government was the largest borrower, with safe and guaranteed payback, “So why would anybody bother to find a private client.”
Meanwhile, Hamid Yar Hiraj, said that there are reasons for government borrowings, adding “We need to determine the fault and the way forward.”