Pakistan is one of the unfortunate countries in the world whose people buy the most expensive food, clothes and medicines while in return they are not given any benefits from the government. Due to the increase in government expenses and incentives the masses also pay the debt taken through buying expensive electricity gas and fuel.
Besides there is no such thing of daily life on that citizen do not pay sales tax. In electricity bills general sales tax, Neelum Jhelum surcharge and new taxes are collected from every citizen. Despite this, when the FBR officials open their mouths or the so-called economists speaks they have only one point that Pakistanis do not pay taxes.
In fact ordinary Pakistanis do pay taxes but they are also forcibly charged more unwanted taxes. Recently the former governor of State Bank of Pakistan, Dr. Murtaza Syed has said that Pakistan is trapped in one of the deadliest debt traps in the world.
He shed light on the current debt situation of Pakistan. A much more sensible approach was called for to
Re-profile the debt of the current burden of past debts is forcing us to default on our growth and weather needs. The Pakistani government is paying more debt than any other country in the world and will continue to do so for many years to come. Because of this punitive and unrealistic taxes are required to pay off old debts in addition there are no real resources left for investment in Pakistan.
This is why Dr. Murtaza Syed warned that as in Kenya recently it has been seen, that debt is putting Pakistan on a dangerous path of social discontent. Referring to the data of United Nations Trade and Development Debt Dashboard, Dr. Murtaza Syed said that at 6 percent, the government of Pakistan is the developing world pays more interest as a share of the economy than any other country in the world. With 65 percent interest, Pakistan’s government has the second-highest government revenue ratio in the world after Sri Lanka pays interest. As a result of this heavy interest rate burden the government has no resources left for social expenditure.
This is scary because social spending is critical to improving the capabilities of our population and increasing the quality of jobs exports and foreign investment in the economy spends three times as much, the second-worst ratio in the developing world after Sri Lanka.
Similarly the government spends almost six times more on interest than on health, a ratio only worse in Yemen, Angola and Egypt. Clearly interest payments on loans are increasing public spending on education and health in Pakistan. Thus the situation is already worst compared to the rest of the world. In the end the government pays twice as much on interest as on investment which is important for development. This is a ratio that is worse only in Angola and Lebanon. Pakistan currently invests only 14 percent of GDP, which is less than half the rate generally considered necessary for sustainable development.
According to the economist, debt burden is not only a pattern of current high interest rates in Pakistan and globally. According to all the above figures Pakistan’s interest bill has been the highest in the world for the last four years even when interest rates were very low.
So this problem reflects Pakistan’s heavy debt burden and not high interest rates. Even if Pakistan’s income miraculously rises to 2 percent of GDP in the next few years, interest will eat up about 55 percent of the government’s revenue.
Readers know that the words of economists are very complicated but if even a common man is entrusted with the responsibility of getting the country out of debt, the first thing he will do is to cut the expenses and privileges of all government officials. After that he will stop using free gas and electricity then reduce unnecessary expenses. But here the stream is flowing backwards and the government has increased its expenses, in such a situation the state of affairs seems to be getting worse. Therefore until the government reduces its luxury, we cannot have any hope from rulers.
