This refers to the news report ‘Pak foreign debt jacks up to $113 bn: SBP’ (Oct 20). Pakistan does not have a well-thought-out debt management strategy. At present, more loans are being obtained to bridge the budget gap and to pay off other financial obligations. It is a flawed approach as dollars must not be borrowed for consumption purposes as these do not build up repayment capability.
The relevant finance authorities should focus on increasing exports for reducing the trade gap and balancing external account. There is also little willingness to compress the import bill by restricting the import of non-essential items. The irresponsible handling of foreign exchange resources is increasing the country’s foreign debt.
Huma Arif
Karachi