India, like a typical neighbor, is always peeking into Pakistan for any news to twist and spread. The Indian media has always been more focused on what’s going on in Pakistan rather than focusing on its own mess. Lobbying and flaring up their headlines with news against Pakistan is India’s most favorite thing to do. Only recently Indian media made another attempt trying to school Pakistan regarding it’s debts and loans.
Recently, Indian media broadcasted headlines claiming “Pakistan doesn’t have money to run the country” and we are in fits.
Looks like India loves to throw stones at Pakistan forgetting how badly they hit back. Dear Indian media let us help you widen your horizon of knowledge.
- Pakistan doesn’t entirely depend on loans in running the country ever since reforms were made in our taxation system. The accountability standards have improved to the extent that it leaves no influential or common man unaccounted.
- Tourism industry has boomed despite Covid and travel restrictions. The northern areas of Pakistan have been a sight for national and international tourists due to the tremendous developments made by the government. The beautiful road network has made traveling immensely safe and easy while making huge contributions to the GDP.Skardu airport has also been made international which is has made international tourism more convenient. This has increased a large portion of our GDP.
- Industrial and agriculture sectors have always been large contributors to the GDP and now state-owned enterprises have also joined the list which have been making significant profits.
- IMF is not our only source of ‘money.’ Saudi Arabia will be providing $4.2bn to Pakistan which will be used to serve multiple purposes.
Now that we have facts, let’s talk numbers:
- A better way to measure the level of debt is through the Debt-to-GDP ratio instead of looking at the absolute values of debt. In this light, it is important to highlight that Pakistan has witnessed one of the smallest increases in its Debt-to-GDP ratio during the pandemic. The global Debt-to-GDP ratio increased by 13 percentage points, whereas, Pakistan’s Debt-to-GDP ratio witnessed a minimal increase of 1.7 percentage points in 2019-20. Pakistan’s Debt-to-GDP ratio in fact reduced by 4 percentage points indicating a lower debt burden at the end of June 2021 as compared with the last fiscal year.
- Pakistan’s total debt to GDP has decreased to 83.50% of GDP on 30th June 2021 from 87.6% on 30th June 2020. Both domestic and external debts have depicted a downward trend from last year.
- While India’s economy was on the verge of a breakdown, the impact of economic slowdown due to the Covid-19 pandemic mainly resulted in higher than estimated primary deficits for which Rs 3.5 trillion (23 percent of the increase) were borrowed from IMF for the financing of the primary deficit. Pakistan was able to easily recover and counter future variants of coronavirus as well whilst the economic and social losses incurred for India were to the extent that they are still struggling to recover and future variants of the virus will only further deteriorate their condition.
To conclude, the increase in debt during the last three years occurred mainly due to implementing difficult and unavoidable policy choices.
India right now:
Before pointing fingers, India definitely needs to do some introspection and realize we always surprise them when we retaliate.
— Mudassar Ahmed Ilyas (@595Mudassar) August 24, 2019