Foreign debt is an outstanding loan that one country owes to another country or institutions, foreign debt also includes due payments to international organisations such as IMF, World Bank. In the month of October 2016 Pakistan’s foreign debt has reached an all time high approximately US $73b as foreign direct investment stays at a dangerously low mark. IMF estimates that if Pakistan continues to acquire external loans at this pace, the loan is likely to swell to US $90b by 2020, which is terribly dangerous figure in the economic history of any country. To reduce the foreign debt, Pakistan needs structural changes in its economy. The reliance on external financing has rusted away the country’s economic potential. To minimise the dependence on the external hand, it needs to set its economy on the stable basis for growth, getting off the roller coaster, reducing the imports and balance of payments and diversifying resources for the export promotion. Hence, the structural changes in economy will make it stable and reduce the possibility of foreign debt. We always talk about Political terrorism, religious terrorism, social terrorism but never talk about Economic terrorism which absolutely destroys the whole nation and debt is also the form of economic terrorism as John Adam said “There are two ways to conquer and enslave a nation one is by the sword and the other is by debt”.