ic economic policies.7) The external debt of around US$ 34 billion is more than 50 per cent of GDP, and four times the annual foreign exchange earnings. Pakistan can neither repay nor service this debt. So far I has only postponed the inevitable, default by piling up further debts at abominably high rates.8) Pakistan’s exports compromise 0.2 per cent of world exports and diversification from a single crop economy has remained an elusive dream. Therefore to hope for exports to be the driving force of economic recovery, as the government is doing, would require an astronomical rise in exports, and the price of cotton. In other words it is impossible. 9) The country’s ability to export is also affected by sluggish world trade, which coupled with an over valued currency, is rendering Pakistan’s exports uncompetitive. With the rise in the price of oil, the gap between import bills and export receipts is widening.10) Until now this gap has been met with remittances and short-term borrowing. But due to a decline in remittances for a number of reasons and Pakistan’s declining credit, this is no longer an option. It therefore seems that it is impossible to maintain the present levels of growth rates and imports as well as meet debt servicing.11) Public sector industries are also deeply in the red due to over-manning, corruption, and the protection given to large defaulters of utilities. The combined debts of just WAPDA and KESC, (which deal with electricity and gas respectively,) are Rs 91 billion while the loans of 18 public sector enterprises is close to Rs 250 billion.12) The government is offering 15 to 18 per cent interest rates on its saving schemes which is far to high for it to be able to generate high enough returns to service the debt and still have enough left over to finance developmental activities.13) Most of Pakistan’s industry faces the issue of negative or nominal growth, while value-added industry ...
