PAKISTAN has been burdened by debt since the era of President Ayub Khan and it remains debt-ridden to this day. At that time, the average debt per Pakistani was 60 rupees; today, each citizen carries a staggering debt of 302,000 rupees. The current IMF loan program amounts to 7 billion rupees with an interest rate of approximately 5%, while loans from Chinese banks and other financial institutions carry higher interest rates of 7% to 8%. By the end of 2024, the per capita debt burden is projected to grow by 15% annually. The combination of high interest payments and a declining exchange rate has significantly increased the national debt, which has risen from 62.9 trillion rupees to 72.3 trillion rupees. This trend reflects the government’s growing reliance on borrowing. Currently, the total volume of foreign debt has exceeded 130 billion dollars.
To escape the clutches of debt, an increase in exports, tax collection and remittances is essential. However, despite tremendous efforts, the government does not seem on track to meet the established export targets. Similarly, it has been unable to achieve the tax collection target set for the first six months of the current fiscal year. The IMF had set a tax revenue target of 6,009 billion rupees for this period, while the Federal Board of Revenue (FBR) could only manage to collect 5,623 billion rupees.
In addition to these factors harming the national economy, terrorism has caused a loss of 150 billion dollars to the economy over the past 20 years. Considering past experiences, current economic conditions and future prospects, it seems highly unlikely that Pakistan will be able to repay this debt. According to the Federal Ministry of Economic Affairs, the Pakistan People’s Party government was the leading government in borrowing from the IMF, having taken out loans exceeding 7.7259 billion dollars. The Pakistan Muslim League (N) government ranks second, having borrowed a total of 6.48 billion dollars from the IMF. The PTI government stands third, having received a 6 billion dollar loan from the IMF in approximately three and a quarter years. During Pervez Musharraf’s nine-year tenure, Pakistan’s debt increased by approximately 3.2 trillion rupees. At that time, Pakistan had already borrowed from the IMF, the World Bank, the Asian Development Bank and several external commercial banks. However, there is no clear policy regarding how this debt will be repaid.
The bitter truth is that these borrowing rulers have returned to their homes after their terms in office, but the people of Pakistan have been repaying these debts for years. Due to these debts, the situation of the public has deteriorated to the extent that nearly 40% of the country’s population is forced to live below the poverty line, about 80% of people do not have access to clean drinking water, around 2.5 crore children are out of school and 44% of children are not growing according to their age due to inadequate nutrition. Although the current rulers seem to claim that they will pay off these debts, the reality is that they are taking on new loans instead of paying the old ones. During 2024, the volume of Pakistan’s domestic debt alone has exceeded 72 trillion rupees. Foreign loans are the price of our freedom, economy and future.
The United States has control over all our economic and financial policies through the IMF and other international institutions. When Pakistan first took a loan from the IMF in 1958, one dollar was worth three rupees. After the 1965 Indo-Pak war, when foreign aid to the country was halted, the dollar rose to seven rupees, but even then, Pakistan’s financial situation was better and loans could be repaid. In almost 67 years, Pakistan has taken loans from the IMF 23 times. This heavy reliance on the IMF has allowed it to dominate all our economic and financial policies. This pattern has continued repeatedly. As soon as we receive an IMF tranche, the harsh conditions imposed by this international monetary institution tighten the noose around the public. In the light of current circumstances, Pakistan stands at a crossroads with two distinct paths ahead. The first is to surrender to the IMF and the United States—a choice that will neither alleviate our economic troubles nor cancel our debts. Instead, it will compromise our beliefs, ideology and freedom. The alternative is to defer debt repayments until economic stability is achieved, channelling all efforts toward recovery.
This requires a clear economic direction and a coherent policy—something our past failures have sorely lacked. The IMF and World Bank, through their influence, have imposed policies that trap us in cycles of debt, widening inequality and exacerbating poverty, with no accountability for where the 23 loans have gone. Without a genuine accountability process, our economic challenges persist, while those responsible evade scrutiny.
The claim that defaulting would isolate us is misleading. Pakistan can sustain exports by fostering trade with China, Afghanistan, Iran and other Islamic nations, forming a new trade bloc. Bartering oil for food exports like rice and wheat could reduce import costs and address our largest expenditures. Meanwhile, declarations of economic stability ring hollow when unemployment and despair drive people to desperation. To secure sovereignty and survival, Pakistan must reject the debt trap and rally its resilient people for true economic revival, preserving freedom and dignity. There is no middle ground.
—The writer is Chairman, Tehrik Jawanan Pakistan.
