About the IMF

The International Monetary Fund (IMF) is an organization of 189 countries, working to foster
global monetary cooperation, secure financial stability, facilitate international trade, promote
high employment and sustainable economic growth, and reduce poverty around the world.

Created in 1945, the IMF is governed by and accountable to the 189 countries that make up its
near-global membership.

https://www.imf.org/external/about.htm

Pakistan, the IMF and a New Loan

A recent loan package of $5.3 billion to Pakistan by the IMF will enable transitory relief to
Pakistans new government and its limping economy. But Pakistans long-term economic
solutions cannot be solved by frequent loans from international organizations and foreign aid
from friendly nations such as the United States, Saudi Arabia and China. Economic principles are
no different whether it involves a national or personal economic situation and securing loans and
foreign aid is not a permanent solution in either situation. Of course, loans and foreign aid, in
particular, are valuable tools to fix short term pecuniary predicaments, provided the money is
managed correctly, but sustainable economic growth is the only answer to avert future financial
tribulation and that should be the priority of Pakistans new government.

Pakistans chronic dependency on foreign aid and international organizations like the IMF and
the World Bank is well documented. The United States has been providing foreign aid to
Pakistan since the early 1950s and the IMF and various Pakistani governments have worked out
and then abandoned a number of financial arrangements in the last 30 years. There is absolutely
nothing wrong in seeking IMF assistance and accepting foreign aid from friendly countries in
order to strengthen a nations economy and relax short-term fiscal vexation. There are several
examples confirming that a number of countries took advantage of IMF assistance to revitalize
their economy and managed to attain robust economic growth.

India is the prime example of successfully managing an IMF loan which helped to improve
economic growth for many years. In the 1990s, the IMF and the World Bank provided financial
assistance to Pakistan and recommended a number of economic reforms to stabilize Pakistans
economy and draw foreign direct investment, but Pakistan failed to achieve these intended goals.

Positive results could have been achieved by properly managing and investing foreign aid to
improve infrastructure, agricultural production, education and the healthcare system.

Obviously, investments in these sectors create thousands of new jobs and low unemployment is
proven to stimulate any economy regardless of the size and situation of a country. More people at
work means higher consumer spending, increased demand in goods and services and improved
tax revenue, in all different forms, for the government. Successive Pakistani governments were
unable to dedicate the full amount of foreign aid and loans to these programs because of
widespread corruption.

As usual, all monetary support, especially any IMF loans, come with a bundle of carefully
crafted terms and conditions, termed loan conditionality, designed to achieve projected
objectives and liberalization, privatizations, and the creation of a business friendly environment,
to encourage foreign direct investments. These are some of the IMFs basic and standard
conditions for loans to most developing countries. Despite following IMF recommendations,
Pakistan failed to attract foreign direct investment which is necessary to keep the economy
growing once the programs intended to improve employment begin to produce some economic
improvements. Political instability is the prime reason for Pakistans failure to draw foreign
direct investment. Safety and security as well as human assets were other concerns that held back
multinational corporations from investing in Pakistan.

Implementing public welfare programs and attracting foreign direct investment seems like an
easy task, but it requires proper planning, excellent governance and a stable political system to
successfully execute these programs. After all these years and billions of dollars of financial
help, Pakistan is still struggling with high unemployment, poverty, poor education and a
healthcare system. The leading reason for Pakistans inability to realize economic progress are
the decades of weak and corrupt governments in Islamabad who have failed to manage and
invest foreign aid and address issues concerning the safety and security of its citizens, let alone
the safety and security of foreign citizens.

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A government in constant need of money is always at risk of being manipulated by powerful
groups within the country for their own benefits and by the international community for their
geopolitical strategies. To achieve economic growth and financial independence, Pakistan needs
a corruption free democratic government which is strong enough to stop violence, provide safety
and security to everyone and disciplines the terrible twins of Pakistan, its military and ISI, who
are mostly responsible for creating disturbance within the country, in the neighborhood and
around the world.

The people of Pakistan are hoping that newly elected Prime Minister Nawaz Sharif will be able
to install an effective and credible government that will reduce violence and corruption, manage
loans and foreign aid better than its predecessors and begin a new era of political and financial
stability in Pakistan in order to confront the forces who want to see a weak government in
Islamabad.
IMF loan for Pakistan repeats history of
failed bailouts

Jubilee Debt Campaign

4 July 2013

The International Monetary Fund has agreed in principle to lend $5.3 billion to Pakistan
over three years.

The money will be used simply to make debt payments, primarily to the IMF itself. The loans are
due to be ratified by the IMFs Board in September, if Pakistan implements IMF economic
conditions in the meantime. The exact economic conditions which will be expected of Pakistan
have not been released.

This year the Pakistan government is expected to spend $5.6 billion on foreign debt payments,
rising to $6.2 billion next year. This is over 20 per cent of government revenue.

Tim Jones, Policy Officer at Jubilee Debt Campaign, said:

The IMF has been lending to Pakistan for thirty of the last forty years. A new loan will just
repeat the failed cycle of bailouts and austerity. We believe that much of Pakistans debt is
odious, having been run-up by various military regimes. Rather than an IMF loan, Pakistan
needs a freeze on debt payments, and a public audit to find out how legitimate the debt is, and to
learn lessons to prevent debts increasing again.

In May 2013, Jubilee Debt Campaign and Islamic Relief published a report[2] on the history of
Pakistans debt crisis. The report called for:
A public audit into the debt
A moratorium on debt payments, and ultimately cancellation of unjust and unsustainable
debts
Lenders such as the IMF to stop demanding regressive tax reforms, and assist Pakistan in
collecting tax owed by the wealthy
An end to military action which is killing thousands of people, increasing extremism, and
costing the Pakistani people billions of dollars
The Pakistan government to be allowed to regulate foreign investment, to prevent
unsustainable debts being created

For more information contact Tim Jones on +44 20 7324 4722 or +44 7817 628196

https://jubileedebt.org.uk/press-release/imf-loan-for-pakistan-repeats-history-of-failed-bailouts

The Express Tribune > Pakistan

IMF approves $497m loan for Pakistan after
bailout review
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IMF approves $497m loan for Pakistan after

bailout review
By Reuters
Published: February 4, 2016
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PHOTO: REUTERS
ISLAMABAD: The International Monetary Fund said on Thursday it had agreed to release a
$497 million tranche for Pakistan after the latest review of a bailout package awarded in 2013,
though the disbursement still requires IMF board approval.

Once the latest disbursement is made the IMF will still have to release $1.1 billion of the total
$6.7 billion loan agreed three years ago.

IMF agrees to delay PIA sell-off for six months

After constructive discussions, the mission and the Pakistani authorities have reached stafflevel
agreement on the completion of the tenth review under the EFF (Extended Fund Facility)
arrangement, the IMF said in a statement.

Pakistan shelves plan to privatise power firms, angering IMF: sources

Pakistan has shelved plans to privatise its power supply companies and will miss deadlines to
sell other loss-making state firms, reneging on promises Islamabad had made to the IMF in
return for a $6.7 billion bailout three years ago.

Two government officials with direct knowledge of the situation said International Monetary
Fund officials meeting with Pakistani officials in Dubai this week were angered by the
backtracking, but they expected the IMF would still release the remaining $1.6 billion to be
disbursed.

The IMF was due to announce its decision on the next tranche, expected to be $500 million, at a
news conference later on Thursday in Dubai.

Pakistan to get another $502m IMF loan

For all the IMFs frustration over the privatisation delays, the government has pushed ahead on
other reforms, the Pakistani officials said, though there is another unspoken reason why
Islamabad can expect the money to keep coming with little more than a reprimand.

Western allies, and neighbours Afghanistan and India, fear an economic meltdown would create
a witches brew in the nuclear-armed Muslim nation of 190 million, mostly poor people, whose
fragile democracy is under internal attack from militants.

Still, economists said a rebuke would send a negative signal to international financial markets
about Prime Minister Nawaz Sharifs government.

It was embarrassing and brutal, a senior Pakistani official present at the meeting in Dubai, told
Reuters, describing the IMFs response when mission head Harald Finger was told that the
government had decided not to sell nine power distribution companies because of fear of labour
unrest.
It was nothing less than a dressing down. If the IMF still doesnt penalise us, then all I can say
is, Were very lucky,' the official said.

The other source, a senior finance ministry official who was also in Dubai, confirmed the
account.

IMF board clears $6.2b loan tranche

The finance ministry did not respond to calls seeking comment. A spokesperson for the IMF said
the Fund would not comment during a mission review.

The IMF loan had helped Pakistan stave off a default in 2013, when dwindling foreign exchange
reserves covered less than six weeks of imports. Pakistans reserves have since swelled to $20.5
billion in January from $11 billion in mid-2013.

Union unrest

The privatisation of 68 state-owned companies, which include loss-making enterprises like

Pakistan International Airlines and Pakistan Steel Mills, is a crucial part of the IMF deal and was
meant to bring the countrys finances back on track.

Such enterprises drain about $5 billion every year from state coffers, around an eighth of the
governments fiscal revenues last year of around four trillion rupees.

What needs to be done for PIA to take off again

The government has made some progress, including raising more than $1 billion by selling its
entire stake in Habib Bank Ltd, but has struggled to find buyers for most of the companies and
faced stiff opposition from labour unions.

Protesters clashed with security officials on Tuesday over plans to privatise the national airline,
leaving two people dead. Most PIA flights were grounded on Wednesday.

Both Pakistani officials said the IMF had made clear its frustration with the delays to
privatisation drive.

The IMF is asking the obvious question: Why didnt you start negotiations [with unions]
earlier? Why wasnt this handled better at the political level?' the senior government official
said.

The Pakistani officials told the IMF that taking on the power companies 400,000 unionised
employees was fraught with risk, and that instead the government would bring in independent
boards of directors to improve management.

Govt bans union activity to prevent PIA strike

Pakistan has already missed last years deadlines to solicit buyer interest in PIA, and the officials
said the government has now informed the IMF it would miss the June 2016 deadline to
conclude the sale of 26 percent shares of the airline.

Pakistan will also miss its deadline to sell Pakistan Steel Mills by March this year, the officials
said.

Pakistani governments problems dealing with the IMF could nudge them toward other avenues
for help, like long-time ally China, which plans to invest $46 billion in a China-Pakistan
Economic Corridor (CPEC), and is also leading the new Asian Infrastructure Investment Bank.

https://tribune.com.pk/story/1040145/pakistan-shelves-plan-to-privatise-power-firms-
angering-imf-sources/

IMF fresh loan to Pakistan- a recipe to ruin

inShare1

(By Abdul Khaliq)

Pakistans public debt has grown over the last six years at a pace never witnessed in the
countrys history. Public debt has grown at an average rate of 21.5 percent per annum from
2008 to 2013 against an average rate of 6.6 percent per annum during 2000-07.

Thus current foreign debt stands at $63 billion in June 2013. The domestic debt is even higher;
more than about $75 billion. On the other hand average annual debt servicing is about $6
billionover 20% of export revenues, and more than half what Pakistan currently spends on
health and education combined. Two Ds (Debt and Defense) consume almost 90% of Pakistan
resources, leaving peanuts for social sector.

The successive governments over the last 60 years accumulated Rs.6040 billion public debts
while the previous PPP regime alone added Rs.8215 in just five years. Put differently, every child
born in 2007-08 carried a debt burden of Rs.36606. A child born in 2012-13 carried a debt of
Rs.77896 an increase of 112 percent in just five years.
Within the public debt, it is domestic debt that has grown at a pace (23.4 percent per annum)
faster than external debt, which stood at $46.2 billion in end June-2008 and rose to $66.4 billion
by end-June 2011. However, it declined to $60 billion in end-June 2013. This decline in external
debt owes to the suspension of the IMF program in May 2010.

Meantime, Pakistan continued to service its external debt obligations out of its foreign exchange
reserves. It appears that the suspension of the IMF program was a blessing in disguise as it
prevented Pakistan from further accumulating external debt to the extent of approximately $10
billion by now.

Within the domestic debt, the composition of debt has witnessed considerable changes in the last
five years. Medium-to-long term debt has been converted into short-term debt with serious
consequences for governments debt management. Today, over 55 percent of domestic debt
(Rs.5.2 trillion) is of short maturity, which must be rolled over at least once a year. Even more
worrisome is the fact that the bulk of short-term debt is shifted to the shortest end of the maturity
(three and six months).

In nutshell the debt situation is worse when we look at the figures of Pakistans foreign debt,
which is galloping with horrific speed and has almost touched the new heights. There seems no
way out for the successive governments to get rid of this vicious circle but to persistently borrow
more loans to meet their previous debt obligations.

Evolution of bourgeoning debt

According to period-wise figures released by the Economic Affairs Division (EAD) and the
Ministry of Finance at last year briefing to Special Committee on Debt, in the last 28 years
Pakistan economy relies on reckless borrowing, which could not solve the economic problems of
the country.

During the period from 1985 to 2012, a total amount of $72.261 billion loans and grants were
received by Pakistan, including $59.240 billion as loan and $13.020 billion as grants. However,
after repayment of total outstanding amount of foreign loans as of July 31, 2012, it now stands at
$46.4 billion while total amount of grants received so far by the country are at $13 billion.

During Gen Zia regime from 1985-88, the total foreign assistance received by the country was
$6.37 billion including $4.6 billion as loans and grants of $1.7 billion. During the 1988-90, in
Benazir Bhuttos first regime, $4 billion as foreign loans and $1.11 billion as grants were
received by the country.

From 1990-93 during the first regime of Nawaz Sharif government, a total of $7.5 billion as
foreign assistance including $6.1 billion as loans and $1.4 billion as grants were received. From
1993-96, during the second tenure of Benazir Bhutto a total of $8.1 billion foreign assistance
including $7.3 billion as loans and $804 million as grants were received.

In Pervez Musharrafs regime from 1999-2008, a total of $23 billion loans and grants were
received by the country that included $17.9 billion as loans and $5.06 billion as grants while in
2008-2013 the previous PPP government received the total foreign assistance of $14 billion,
including $11.6 billion as loans and $2.3 billion as grants.

Pakistan obedient to IFIs

Pakistan is perhaps among the best clients of international creditors. It never disappointed its
creditors, did not stop its debt servicing even during worst human crisis in 2005, when about
89000 of its people killed and millions rendered homeless by devastating earthquake. Again in
2010 super floods about 20 million people were severely hit, deprived of basic amenities, shelter
less and foodless, but Pakistan, like a good customer, continued debt servicing on its foreign
debts and did not seek any debt relief.

This does not mean that the country is very much financially strong or capable enough to combat
natural disasters and at the same time never falters in performing its debt obligations. In fact the
successive governments/regimes instead of taking care of its people have been continuously and
shamelessly shifting the debt burden, under the dictations of IFIs, on the working classes of
Pakistan.

Recently in September 2013, IMF agreed to a fresh 3-year bailout package for Pakistan under
Extended Fund Facility. Strict conditions are attached to this deal. This agreement hides more
than it reveals, from whatever has so far been divulged, it is clear that Pakistan would have to
implement tough fiscal measures such as imposition of more taxes, withdrawal of tax
exemptions, increase in power and tax tariffs, elimination of power tariff subsidies and
privatization of public sector enterprises.

The IMF strings reflect that already terror and poverty-stricken people of Pakistan would have to
brace themselves for greater hardship in the coming years. In a situation where more and more
population is fast plunging into poverty particularly when food security is already alarming as 80
out of 131 districts of the Pakistan or about 48.6 percent of population does not have access to
sufficient food.

Reckless borrowing from banks

Since the latest IMF program required the government to build $4 billion of additional reserves
during the current fiscal year, it is in a desperate mood to buy foreign exchange from right and
left to build the reserves. Under IMF dictation in September 2013, the govt. reached an
agreement with a consortium of seven domestic and international banks to borrow $625 million
to boost foreign exchange reserves and stop continuous bashing of the Pak rupee.

The banks which agreed to provide foreign exchange include; Bank of Tokyo, Al-falah Bank
Limited, Credit Suisse, Standard Chartered Bank, National Bank of Pakistan, United Bank
Limited and Allied Bank Limited. The highest contribution of $150 million will come from Bank
of Tokyo. More than half of the country`s liquid reserves of over $10.3 billion are currently held
by the commercial banks. This deal would accumulate government debt while the banks would
keep enjoying.
The prevailing economic scenario suggests that debt burden will be going further up as Pakistan
is also seeking financing from other sources: $1.5 billion from the World Bank, $1.6 billion from
the Asian Development Bank, and $2.4 billion from other countries.

IMF and Pakistan

IMF has been the most persistent lender to Pakistan and is regularly providing bailout
loans to Pakistan. For 29 of the past 40 years Pakistan has received loans from the IMF, which
amounts to one of the most sustained periods of international lending to any country. Over the
period the IMF\\\\\\\s loans have made Pakistan a more unequal country.

In September 2013 The International Monetary Fund (IMF) approved latest bailout loan of
$6.64billion under Extended Fund Facility. In exchange, it demanded such strict austerity
measures that are bound to devastate the living conditions of workers and the poor.

The cash-strapped newly installed Pakistan Muslim League (PML) government has no option but
obey and implement all the IMFs demands. A total of $3 billion has to be repaid during the
current financial year, including to the IMF. Pakistans dollar reserves stood at $6
billiononly enough for Pakistan to pay for six weeks of imports. The strict conditions attached
to the three-year EFF program include:

Budget cuts to lower the fiscal deficit from 8.8 percent of gross domestic product (GDP) to 6.3
percent.

Subsidies cuts. One immediate target of subsidy cuts is electricity. The government agreed to a
30 percent increase in electricity prices for domestic users. Gas prices are also being
rationalized, with a new levy.

Currency depreciation. The Pak Rupee will be devalued an average of 110 rupees to the US
dollar. On account of which the volume of foreign debt has increased in one go.

Privatization: Speeding the restructuring and privatization of state-run enterprises. The

government will select 30 public firms for privatization, beyond the 35 that have already been
chosen. About 1.2 million jobs are expected to cut down as result of privatization plan.

Increase in taxes. The IMF has also demanded a significant increase in tax revenues from current
levels of 9.7 percent of GDP to 15 percent by 2018. In July 2013, sales tax on imported and
domestic second-hand clothes, largely consumed by the poor, was more than doubled from 2% to
5%. In the same government budget, income tax on asset management firms was cut by 10%, a
gradual reduction in the corporate tax rate was announced.

The under-taxation of the wealthy elite, including politically powerful rural landlords, is
something that IMF conditions have not addressed. The country collects less in taxes as a
percentage of its economy than almost any other country of its size. While Pakistan has failed to
meet many of the lenders\\\\\\\ demands to increase its overall tax revenue, the government
managed to find a way to push through sales tax with focus of indirect taxation.
Fresh spree of privatization

On the dictations of the IMF, the new Sharif government has directed the Privatization
Commission to immediately start the process for sale of 31 public sector entities (PSEs). The
companies cleared for divestment include the Oil and Gas Development Company Limited,
Pakistan Petroleum Limited, Mari Gas, Pak Arab Refinery, Pakistan State Oil, Sui Southern Gas
Company Limited, Sui Northern Gas Pipelines Limited, Pakistan International Airlines, PIA-
Roosevelt Hotel, New York, Pakistan Railways, Gujranwala Electric Power Company, Lahore
Electric Supply Company, Islamabad Electric Supply Company, Faisalabad Electric Supply
Company, Northern Electric Generation Company, Pakistan Steel Mills, National Power
Construction Company and Pakistan National Shipping Corporation.

The financial sector entities selected for sale in the first phase include National Bank of Pakistan,
First Women Bank, Small and Medium Enterprises Bank, National Investment Trust Limited,
National Insurance Company Limited, Pakistan Reinsurance Company Limited, State Life
Insurance Corporation and House Building Finance Corporation. The Civil Aviation Authority,
Karachi Port Trust, Port Qasim Authority and National Highway Authority are also on the list.

The government has also made a commitment with the IMF to announce a strategy for the sale of
30 firms as a benchmark for disbursement of second tranche of the IMF loan. Under the
commitment, the government is to announce privatization plans for remainder of total 65 entities
by the end of 2013.

People feel the pinch

The overall impact of these IFIs-dictated moves proving harsh blow to the living and social
conditions of workers and the poor. Foreign loans have weakened the economy, eroded the
currency, decreased the buying power of the masses, and have promoted the interests of the elite.

Pakistan is currently unlikely to meet many of the millennium development goals, including on
hunger, education, gender equality, child and maternal mortality and access to basic sanitation.
High debt payments, and cuts in government spending, make it more difficult for the state to
provide decent quality public services such as healthcare and education.

The careful analysis shows fresh IMF program designed to extract as much as possible from
working people, to pay for the crisis of big business and international finance capital. The IMF
intervention in Pakistan looks similar to its program for Greecewhich has deepened the
recession in that country, reducing working peoples conditions to miserable levels,
increasing unemployment, imposing deep wage cuts, and wiping out social programs.

Inflation is going to rise due to continuing devaluation of the local currency, and subsidy cuts
and taxes will increase the cost of living unbearably, under conditions where the masses are
already living in dire poverty. 49.4 percent of Pakistanis live in poverty while 25% live below
poverty line of $1 per day.
This ever-increasing debt burden has worst implications on the lives of these poverty-stricken
people. Since Pakistan has to repay its debts at any cost, it is unable to resolve its pressing
problems; like energy crisis. The power crisis has worsened to the extent that government has no
option but to close down its educational institutes and universities. The Quaid-e-Azam
University was shut down is one such example, which was shut down on account of electricity
load shedding in summer of 2012.

So much so that operation theaters in rural areas hospitals have to suspend their work due to lack
of power. Labor is being laid off due to closure of industrial units on account of load shedding,
causing unemployment. The textile sector of Faisalabad is devastated by chronic power crisis,
rendering thousands of workers out of work. The energy crisis is directly linked to water crisis,
as number of working class area has to face severe water scarcity along with energy crisis.

Under IMF pressure the increase in indirect taxation on daily use items has further made the life
of those millions particularly 46% population living below poverty line, miserable. Increase in
VAT in current budget 2013-14 has made people to pay the price by compromising on the
education and health of their children. Many poor families have no choice but to withdraw
children from schools, particularly girls. These children are sliding down to the child labor
market.

The state of public health is even worst. Due to poor health facilities in government hospitals
people have to buy these facilities in private sector. So expensive are the private hospitals that
poor people prefer self-medication or consult the local quacks, risking their health. The
government who does not fail to pay any of the IMF installments has shamelessly witnessed 157
of its children died due to measles outbreak in Punjab till June 2013. Earlier this year, more than
460 children died from measles in Sindh. The lives of about 200 people were claimed by Dengue
last year in Punjab province alone. One of the major reasons for this epidemic is the lack of
vaccination coverage in different parts of the country.

Joblessness coupled with price hike has left little option for many poor families but to commit
suicide. According newspaper reports the Govt. had to ban rat-killer pills as many people,
particularly household women used these pills as easy and cheap way to end their life due to
poverty. Some years back jumping from tower liberty (Minar-e-Pakistan) in Lahore became
favorite place of suicide committers. Taking it as sheer embarrassment, Government had to stop
the electric lift service of the Minar to check this suicidal trend. The new trend in suicide is really
heart rending as in many cases entire family along with kids commit suicide. The predominant
reason in majority of such cases is poverty.

Debt and disasters

To compound its problems, Pakistan has been deluged by a series of catastrophes, including 2005
devastating Kashmir earthquake, 2007 cyclone and the 2010 super floods that displaced some 20
million people, destroyed infrastructure and continues to ruin lives today. But through all these
disasters, Pakistan could not get debt relief and kept debt servicing on. The record shows that
response of the IFIs and donor countries during the above mentioned disasters in Pakistan has
been disappointment, particularly in the context of comparison with other countries in
humanitarian crisis.

For instance within 10 days of the Kashmir Earthquake in 2005, which left up to 3.5m people
homeless, the donors provided Pakistan $247million ($45m pledges). This amounted to $70 per
person. On the other hand within 10 days of the Haiti Earthquake in Jan 2010, some $742 million
were provided and $920 million pledged to assist 1.5 million people. This amounts to $495 per
person.

Similarly, within 10 days of Cyclone Nargis striking Myanmar in 2008, affecting 2.4 million
people, an amount of $110 million was provided ($109m pledged). This amounts to $46 per
person. On the other hand after 2010 Pakistan floods, when 20 million people were affected, less
than $45 million were provided ($91m pledged), which amounted to $3.20 per person.

In their response to the 2010 UN flood appeal for Pakistan different countries, clubs and
organizations pledged aid for relief, recovery and rehabilitation of flood-hit Pakistan. Only 56%
of the total pledged amount was materialized. If we look at the table below, it gives clear
impression that flood aid pledged by rich countries was just peanuts in comparison to loans they
have been offering Pakistan.

The natural disasters in the last one decade have coincided with Pakistans prolonged
commitment to the US-led so-called \\\\\\\war on terror\\\\\\\, which has cost the country about
$80 billion financial loss besides killing and displacement of thousands of people.

Deterring debt domination

Though Pakistani peoples struggle against debt domination and IFIs economic terror has not
been successful to the desired level but such resistance has been there to register itself. For
instance after 2010 devastating floods a number of civil society organizations led by CADTM-
Pakistan pressurized the government of Pakistan to seek debt relief instead of loans from donor
community. Under Pakistan Debt Cancellation Campaign (PDCC) we held a number of anti-debt
rallies, demos and conferences to push forward the question of debt justice. Thousands of people
were mobilized around the issue, as a result of which the Senate (upper House of Parliament)
passed resolution to seek debt relief.

Pakistani civil society is of the view that under the prevailing conditions, instead of further
borrowing, Pakistan must be able to check corruption, tax the rich, cut military budget and
mobilize all available resources toward relief for the poor through introduction of social
protection systems. Instead of sending billions in debt service out of the country, Pakistan should
be able to divert those resources to end energy crisis and creating jobs to the poor on urgent
basis. The first and foremost thing in such circumstances is the fulfillments of all fundamental
human needs of the populations.

Debt Audit Need of the hour

In a country where about 50 million people live below the poverty line and 35 million are
undernourished, the debt jacket is tantamount to economic torture. The debt on which these
unjust loans were based keeps this strategic nation exactly where world leaders want it in
absolute dependency. But there is an alternative. There is a growing movement in Pakistan for
suspension of debt payments, a full audit, and repudiation of debts regarded as illegitimate.

As a result of reckless borrowing, Pakistans governments have little need to be accountable

to their people; this lending insulates governments and makes them dependent on foreign
governments and international institutions like the IMF.

An audit of the public debt of Pakistan is need of the hour and prerequisite to economic justice. It
doesnt just mean debt cancellation. It means the people should decide which debts were
legitimate, and which debts should be cancelled, as a first step towards a more accountable
society.

Were not simply calling for debt cancellation for Pakistan, but a debt audit, which helps put
Pakistans people in charge of their economy. We believe this would be a first step to a more
equal, accountable and sovereign society

We dont pretend that a debt audit and debt cancellation will solve all of Pakistan\\\\\\\s
problems. We think it can begin to institute an economy run for and by Pakistan\\\\\\\s people
but it\\\\\\\s not enough on its own.

A debt audit would turn things around, and forces accountability of the government to the
people. A debt audit necessitates bringing Pakistan\\\\\\\s people into the picture, increasing an
understanding of how debt was run up and giving them the opportunity to decide what to do
about it. We\\\\\\\re not simply talking about repudiation, but a democratic process of
separating \\\\\\\elite, regime debts\\\\\\\ from democratic debts.