Debt Repayment and External Borrowing In Pakistan

 


In 2024, Pakistan faces significant challenges with debt repayment and external borrowing. With rising external debt obligations, the country struggles to meet payments, leading to increased reliance on international loans. Currency devaluation, high interest rates, and dwindling foreign reserves exacerbate the situation, putting immense pressure on the economy.

Relying on external borrowing hinders Pakistan's economic growth, trapping the country in a cycle of debt. To break free, bold steps are needed. Instead of accumulating more loans, Pakistan should encourage wealthy families to contribute, fostering national unity and self-reliance to pay off external debt and rebuild the economy.

  • Debt repayment and external borrowing create a negative impact on the lives of people in Pakistan. Rising debt obligations strain government resources, leading to cuts in public spending on essential services like healthcare, education, and infrastructure. This deepens poverty, increases unemployment, and drives inflation, worsening living conditions for the population.
  • Debt repayment and external borrowing negatively impact Pakistan’s education and job sectors. With limited government funds due to rising debt, education budgets shrink, leading to fewer resources, lower quality, and reduced access to schools. Job creation also suffers as economic growth slows, increasing unemployment and limiting career opportunities for youth.
  • Debt repayment and external borrowing severely impact Pakistan’s healthcare sector. Limited government funds due to rising debt reduce healthcare investments, leading to inadequate facilities, staff shortages, and lack of essential medicines. This compromises the quality of care, increases disease burdens, and worsens health outcomes, especially for vulnerable populations.
  • Debt repayment and external borrowing create a negative environment for new industries and investors in Pakistan. High debt levels cause economic instability, discouraging investment and increasing the cost of doing business. Government resources for infrastructure and industrial development shrink, hindering growth in industrial areas and reducing confidence among potential investors.
  •  In the end of this note good policymakers are essential for a nation's growth and well-being. Those focused on public welfare, rather than personal gain, create lasting solutions for societal challenges. When individuals invest money to secure cabinet seats, their decisions often prioritize self-interest over the country's progress, leading to ineffective governance and hindered development.