Let optimism and grit prevail

Pakistan’s external economy is plagued primarily with two structural problems. First, a high level of public external debt and second, overreliance on further external borrowings that not only increase the external debt stocks but also push the future cost of debt servicing. All other issues are ramifications of these two conundrums. Our fragile and malleable democracy makes it too difficult for politicians to take the nation on board and find sustainable solutions to these problems of the external economy. A focus on short-term solutions prevail, and the government of the day, with varying levels of support from the military establishment, try to fix the balance of payments problems, often with the help of the International Monetary Fund (IMF) and friendly countries. The role of the IMF has always remained a subject of intense debate revolving around the desirability for and efficacy of its prescriptions for the ailing economy. According to the State Bank of Pakistan, our public external debt and total external debt stood at $99.7 billion and $131.6bn, respectively, at the end of December last year.