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Pakistan will struggle to break out of a cycle of ongoing debt repayments without reform, former prime minister Imran Khan told the Financial Times in an interview.

He told the publication that the government needed to break out of borrowing cycles that have held back developing economies.

Fiscal Monitor: IMF projects fall in govt gross debt to 73.6pc of GDP

He, however, ruled out a default if his party returned to power, saying it would prioritise domestic reforms over seeking debt relief.

We have to conduct surgery in Pakistan in the way we run our government: Former PM Imran Khan

“Is the answer getting more loans, or is the answer to restructure the way we run the country?” he was quoted as saying by FT. “We have to conduct surgery in Pakistan in the way we run our government.

“Whatever we do, when we look ahead, the debt is growing, our economy is slowly shrinking. From my party’s point of view, we’ve started thinking that we’re stuck,” he stated.

According to the former PM, his team is developing a strategy to turn the country around if he returned to power. The strategy will focus on loan repayments and domestic spending.

“We’re sitting with our economists and discussing how to come up with a plan with which we can sit with the IMF and give them a viable way of being able to pay our debts,” Khan said.

“But at the same time, our economy should not be choked so that our ability to pay debt goes down.”

Pakistan among record number of developing countries facing a debt crisis

Campaign group Debt Justice warned this week that poor countries were facing their highest bills for debt servicing in 25 years. Pakistan’s scheduled repayments on foreign public debts are equivalent to 47% of government revenues in 2023, the group said.

“It’s not just Pakistan,” Khan said. “Once you start borrowing in dollars and you have to service your debt in dollars, if your dollar income doesn’t improve or increase, how are you going to then pay your debts?”

He held the view that Pakistan needed to increase its dollar earnings through exports else there was no way to service any debts.

Pakistan has been in a grip of one of the worst economic crises in history and for the past one year, there have been persistent rumours that the country is nearing the brink of default.

With foreign reserves at record low levels, the country has imposed import restrictions that are having adverse impact on the economy.

Even if Khan returns to power, economic experts doubt he will have the political strength to overhaul Pakistan’s flagging economy.

“We have an economic structure which is globally uncompetitive,” said Abid Hasan, a former World Bank economist. “Some of it will have to be dismantled . . . You will require huge consensus. The PTI alone will not be able to do it.”

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Kashif ALI Apr 13, 2023 01:04pm
This is one of the basic issue that every sane, educated, rational and responsibly Pakistani professional knows for decades but always desisted from taking the right bold step for the good of the country. This is what is the real crime committed against Pakistan. Quite unfortunately, during his regime, no finance minister survived the challenging task of financial fiscal management. Asad Umer is the glaring example of an abject and dismal failure of corporate executive that should be a business study for management scientists.
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Haris Apr 13, 2023 01:34pm
The problem with immi-followers that they will find all negative because they were tought to think like this if its not pro-imran or including imran. thats the biggest problem we are facing in our genration. This person has made Pakistan hell by keep destablizing it only for his own interest he dont even think about his stupid followers who died in blind love for him. Till that menace will not be nipped Pakistan cant be out from this situation.
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Pakistani1 Apr 13, 2023 01:54pm
IK government contributed significantly in increasing the debt of Pakistan by implementing inconsistent and ill thought out policies during his tenure.
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Junaid Memon Apr 13, 2023 02:12pm
the simple solution is nationalize everything, that is best option for poor population precious life saving
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Mian M N Shite Apr 13, 2023 02:42pm
IK has a magic wand. One wave of it will erase all debt and then rivers of milk and honey will start flowing and schools will not need modern education. Everybody will be happy in his riasat. HAhahaha.
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Muhammad Iftikhar Apr 13, 2023 05:00pm
The worst ongoing economic crisis is due to import-led growth of previous year in which CAD was around $17bn. Imran led govt were doing tax collection by increasing imports. After America's withdrawl from AFG in Aug 2021, our economic problems significantly worsened because $ dried up and no one is helping us. Imran govt also halts CPEC projects due to which Motorway is still pending. According to CPEC Vision till now SEZs should start exporting goods, china should start using Gwadar seaport for its imports and revenue should be generated through all economic activity. But due to Khan worst period for economy, we have not completed our Motorways and Power generation and Transmission projects due to which neither we increase exports nor we collect revenue from CPEC economic activity.
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Muhammad Iftikhar Apr 13, 2023 05:01pm
The worst ongoing economic crisis is due to import-led growth of previous year in which CAD was around $17bn. Imran led govt were doing tax collection by increasing imports. After America's withdrawl from AFG in Aug 2021, our economic problems significantly worsened because $ dried up and no one is helping us. Imran govt also halts CPEC projects due to which Motorway is still pending. According to CPEC Vision till now SEZs should start exporting goods, china should start using Gwadar seaport for its imports and revenue should be generated through all economic activity. But due to Khan worst period for economy, we have not completed our Motorways and Power generation and Transmission projects due to which neither we increase exports nor we collect revenue from CPEC economic activity.
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Hilarious Apr 13, 2023 05:24pm
@Haris, when was the country stable? In 5 years our currency has devalued some 143% since 1992 that figure becomes roughly 1038%, everyone’s had their chance, everyone has only doubled the debt. Like Einstein said, “stupidity is doing the same thing again and again and expecting different results” and that’s what they all try to do. The government is bad, the people unfortunately are worse, sure you’ll die for the motherland, but when it comes to paying taxes, they’d rather kill themselves, a truly non sensical approach.
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Hilarious Apr 13, 2023 05:26pm
@Junaid Memon, please give just 1 example of where nationalization did good for the people over a period of 5 to 10 years. Nationalization will be great for even more corruption though.
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Ash Chak Apr 13, 2023 10:35pm
@Junaid Memon, The exact opposite is true. The government needs to divest itself from all loss making white elephants like the PIA and PSM. They have no business running businesses.
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Haq Apr 13, 2023 11:38pm
It's The End of borrowed colonial Western system... Pakistan was created to become true Islamic Welfare State, based upon the principles of equality & accountability. Unfortunately we failed completely. Witnessing the collapse of almost all spectrum, we have an opportunity to correct it, seek guidance from Quran & Hadit, The ultimate guide for Muslims & will be questioned about our deeds / efforts on the Day of Judgement....
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Humayun Apr 14, 2023 02:26am
@Haris, It is hilarious that you can even turn this into immi-followers and immi-haters. Just like typical patwari you have no argument against what he said or what is arguments were, the only argument you have is that he made Pakistan hell for the patwaris.
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Humayun Apr 14, 2023 02:30am
@Muhammad Iftikhar, What is the proof of what you are saying. During Imran's era it was not only the imports that were increasing but also the exports. It was the PML (N) era where imports were increasing despite low oil prices and there was no increase in exports. Exports jumped almost 33% in his era which were stagnant since 2008 or were actually decreasing, the way they are decreasing since last year. In addition to that he brought in new Sectors in the export pool like IT. Also the work on SEZs started in Imran's era, it is since last year that everything is stuck just like every other sector of our country.
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Humayun Apr 14, 2023 02:33am
@Junaid Memon, We are still paying the price of nationalization done in the 70s with hundreds of billions being dumped into State owned entities and still we are not able to solve circular debt issues. Please point out one example of the entities that had been nationalized and they are making profit or are competitive.
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Farzana bbi Apr 14, 2023 05:43am
Esas program se Koch hi nhi mlla
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Ch Ahmad Bilal Aug 28, 2023 12:17pm
simple solution is nationalize everything, that is best option for poor population precious life saving
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