The Ministry of Economic Affairs has informed Parliament that over the past five years, from July 2018 to June 2023, the state has acquired external loans of $57.27 billion. These figures don’t yet include any IMF loans. Currently, Pakistan is making annual payments of approximately $25 billion on these loans, most of which is interest repayment.
It should be noted that Pakistan has already received a three-year $6 billion loan and a $3 billion emergency loan from the IMF in the past five years, and is currently awaiting a new three-year $7 billion loan programme. The conditions include new heavy indirect taxes, cuts in social spending, increases in electricity, water, and gas rates, and anti-public measures like large-scale downsizing and privatisation.
The increase in indirect taxes is making everything more expensive, from medicines to basic life necessities. All these loans are being used to pay interest on old loans, cover deficits, and fund the ruling class’s luxuries. Additionally, all national assets are being sold, and millions of government jobs are being eliminated under the pretext of downsizing.
The total internal and external debt has exceeded 75% of the $347.17 billion GDP economy, and Pakistan’s foreign currency reserves are just over $9 billion. These foreign currency reserve figures are also misleading because most of it is temporary aid from various imperialist countries, meant only to keep the account open as this money cannot be used.
Pakistan has taken IMF loans 23 times in its history, meaning it has gone bankrupt 23 times. In the past two years, the country has repeatedly reached the brink of bankruptcy, but each time, aid from somewhere has saved this beggar from starvation.
Currently, the entire federal budget is spent on domestic and foreign debt servicing, defence expenditures, and other state expenses (government, civil bureaucracy, and judiciary), leaving nothing for the public. The horrific injustice is that more loans are being taken to cover budget deficits and pay old loans, placing a continuous burden of economic destruction on the working people, youth, and future generations. Several facts are absolutely clear;
Firstly, the country’s debt has reached a point where escaping the whirlpool of loan acquisition and payments on capitalistic foundations is impossible.
Secondly, Pakistan has become indebted to global powers like America and China, regional imperialist powers like Arab countries, and international financial institutions – essentially becoming a looted kite in the hands of various imperialist powers.
Thirdly, the Pakistani ruling class and state have reached such a level of corruption, incompetence, impotence, and decline that no policy other than ‘earn and run’ is possible.
Besides Pakistan, working people and youth worldwide face similar conditions. Ruling classes worldwide declared class war long ago, placing the entire burden of the capitalist system’s crisis on working people. Popular movements against this are rising worldwide.
In Pakistan too, the working class is preparing for a major battle because survival is impossible without it. In the near future, we will see nationwide movements and strikes by workers and youth that will eventually challenge the current system of exploitation.
