DESPITE repeated claims by the successive governments about better management of the growing debt burden, the situation is deteriorating with the passage of time and there seems to be no light at the end of the dark tunnel.
This is evident from the latest official data, which reveals the country obtained foreign loans worth over $13 billion during the first seven months of the current financial year, a dramatic increase of 70% over the same period last year.
Foreign loans are not bad if contracted for projects and programmes aimed at giving an impetus to economic activities, resolving fundamental and chronic problems of the country and improving the lot of the people.
However, in this case, 82% of the new gross foreign loans were taken to bridge the budget deficit and artificially sustain the foreign exchange reserves at current levels.
It clearly meant that this record loan burden has not helped improve the pay back capability of the country and is just an additional burden on the state. This raises questions as to how the future governments would pay back these loans when they mature.
It is quite obvious that the future governments will have to obtain more loans to pay back the old loans and the vicious cycle will continue for the foreseeable future. It is also because of the country’s vulnerability that now most of the bilateral and multilateral donors are providing loans with strict and humiliating conditions as we pay interest on loans that cannot be utilized and are just parked in the central bank.
This state of affairs should serve as an eye-opener for our planners and decision-makers because we inflicted heavy losses on ourselves by giving cold-shouldered response to the generous offers by China to provide loans for projects and programmes that generate economic and employment opportunities and increase the pay-back capacity of the country.
It is also time that the Government and the Opposition should sit-together to find a satisfactory solution to the problem of growing debt burden, which is becoming untenable.