Sinking Deeper

On top of the agenda of our electronic and print media and the daily TV talk shows these days, are the talks with the Taliban and the fallout if they fail.
The talks have overshadowed operation clean-up, the drone attacks and the random killings. Even the warnings of the financial pundits, of the threat of an economic meltdown, have taken a back burner.
According to Huzaima Bukhari and Dr Ikramul Haq, Pakistan is already up to its neck in debts and is sinking deeper with each passing day. The situation, if not remedied on a war footing, will eventually lead the country to an economic collapse.
During the last three months, the debt burden has soared by Rs 980 billion - an unprecedented increase, pushing the total domestic debt up to Rs 15 trillion. This does not include borrowing from IMF to avert a serious balance of payment crisis.
The present government was very critical of the PPP, for increasing the debt burden by 100% in five years, when the PPP government was borrowing on an average of Rs 3-4 billion a day, but now he is resorting to Rs 9-10 billion a day. PML-N’s own track record during the last three months is worse - adding a debt of Rs 11 billion a day. This monstrous debt burden is going to further enhance allocation for debt servicing in the next budget.
On 30th June 2013, the federal government's total domestic debt was Rs 14 trillion which today stands at Rs 15 trillion. Increase of one trillion in three months is terrifying.
Our leaders are playing the fiddle, arguing on trivial matters, protecting our sovereignty, etc., wasting time and energy, while Pakistan sinks under the burden of debt.
Nobody in the National Assembly or Senate is worried about the erosion of our resources, consumed largely by debt servicing and discuss, how to come out of 'debt prison' which is the main cause of our economic woes.
The data released by SBP for the first quarter of the current fiscal year reveals that domestic debt increased from Rs 9.52 trillion to Rs 10.16 trillion in just three months, showing an increase of Rs 635 billion or 6.7%, while the domestic short-term debt increased by Rs 611 billion or 11.7%.
The short-term debt, that was Rs 5.2 trillion in June 2013 increased to Rs 5.8 trillion. The biggest jump came in the market treasury bills after the commercial banks refused to reschedule their loans.
Seven percent devaluation of local currency against the US dollar resulted in a massive jump in the long-term foreign debt. By end June the US dollar Rs 99.20 and was unofficially devalued by Rs 6.90 to Rs 106.1 a dollar by the end September 2013.
Even entering into a tough deal with IMF has not helped Pakistan to convince other international lenders to be 'generous'. The World Bank delayed sanction of one billion dollars, making it conditional with energy and taxation reforms.
The government had hoped to receive these funds immediately to improve the fast dwindling foreign currency reserves that plunged to $4.299 billion, insufficient to meet even one month's import bill. The massive dip in foreign currency reserves, despite IMF's payout, has left Pakistan and the IMF bewildering!
At the time of signing the IMF 6.7 billion programme, Pakistan expected to receive additional $6 to $8 billion from the donors over a period of three years. These institutions, after the termination of IMF programme in 2010, stopped lending to Pakistan.
The only way to come out of this mess is to accelerate growth, is to generate employment, enhance tax revenues, and stop financing luxuries of elites and losses of public sector enterprises (PSEs). But the present government, like PPP-coalition government is not serious about it.
The way the government is behaving, our foreign debt would reach US $75 billion in 2015 and domestic debt would be Rs 20 trillion. Unless tax revenues are increased, Pakistan can never come out of the 'debt prison'.
All the governments - civil or military alike - have failed to end debt enslavement by failing to raise revenues. After admitting widespread tax non-compliance, no action was taken against any official of FBR.
There is also no will to eliminate wasteful spending on monstrous government machinery and inefficient PSEs. The policies of appeasement towards tax evaders, money launderers and plunderers of national wealth, have pushed the country towards disaster.
When foreign lenders see the lifestyle of our ruling elite, they immediately show indignation and it is hard to believe for them that the rulers of a nation surviving on borrowed funds and on the brink of bankruptcy are capable of displaying such lavishness.
The real cause of our increasing debt burden is outlandish living of the elites off taxpayers' money. Look at residences of judges, generals and high-ranking civil officials with army of servants and fleet of cars.
Wasteful spending by the State and unwillingness to tax the rich is playing havoc with the economy and is widening the gulf between the rich and the poor. With every passing day more people are being pushed below the poverty line, while our rulers unashamedly waste billions on their luxurious comforts, fleet of cars and personal security.
The present crisis testifies to the failure of power-hungry, money-greedy politicians and incompetent, inefficient and corrupt bureaucrats, while reluctance to collect taxes from the rich and mighty, is worsening the miseries of the poor.
There should be a complete change in the style of governance, with the President, Governors, Prime Minister, Chief Ministers, ministers, parliamentarians, and high-ranking government officials should be given 'consolidated pay', which should be taxed, just like the income of an ordinary citizen. And their palatial residences should be converted to universities or income generating assets.
Returning to real time, the trial of Dodger Musharraf seems to be entering its last episode and the Saga, which was supposed to come to end on the 7th, has once again been put off till 18th February.
Will the ending of this soap opera be as disappointing as the high profile trials of the past and end with a whimper, instead of a bang?
This will depend on the final judgment of the three Hon Judges of the Special Court and their ability to enforce the Rule of Law, irrespective of the consequences. 
n The writer can be reached at trust@helplinetrust.org

ePaper - Nawaiwaqt