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Tuesday, July 16, 2024

Pakistan drowning in floods and debt – Dr. Farid A. Malik

The two calamities that threaten the very survival of the nation have to be dealt with urgently otherwise both will remain unresolved and turn into an unbearable burden, writes Dr. Farid A. Malik in an interesting piece.

The Islamic Republic of Pakistan (IRP) is on the brink. Antonio Guterres the United Nations Secretary-General has highlighted the dual threat of raging waters and spiraling debt. With the world’s largest number of glaciers in the Himalayas, the republic is ill-prepared to handle the fast melt due to global warming. Currently, almost one-third of the country is inundated with a massive influx of flood-affected victims and damage to the infrastructure.

Next year the country has to pay back around 22 billion dollars to international lenders. The trade deficit continues to grow. Decades of mismanagement, corruption, and incompetence compounded with environmental calamity have finally caught up. The Prime Minister (PM) with his large entourage of courtiers after participating in the last rites of their Queen in London attended the 77th session of the United Nations General Assembly in NewYork. It is a journey from Imperialism to Capitalism, I am sure they all came home enlightened with fresh ideas to handle both the floods and the menace of debt.

I am reminded of the popular Urdu verse; ‘Doob raha hun/Dooba tu nahin hun’ (I am drowning, not yet drowned). The flood waters are now receding, leaving the devastation behind, and the onlookers are back to their old ways. The PM presented his case to the United Nations. He asked the right questions and sought help while lodging in expensive hotels and enjoying the official protocol. The world listened and wants to help but is not sure how to proceed as it has been a bottomless pit where billions have already been squandered by the powerful and the elite. The combined load of floods and debt is unsustainable.

Read more: Flood Devastation Across Pakistan

The President of France proposed a ‘Donors Conference’ which was a good idea but at the end of the day, the relief will have to be delivered for which effective mechanisms do not exist. Perhaps ‘Debt Write off’ seem to be a better option. The loan payments can then be used for rehabilitation. Instead of borrowing, the focus will shift to self-reliance with control of expenses. The expense side has been ignored for a long time. There has been no balancing act between income and expenditure. The books have to be balanced. Pumping in more easy money is not the right approach which should be avoided to keep the ‘sharks’ away.

Controlling financial appetites

Over the years the ‘Marketing’ efforts have been there while ‘Delivery’ has been missing. The China-Pakistan Economic Corridor (CPEC) project was marketed as a game changer for the republic. China desired land access to the warm waters of the deep sea port of Gawadar for which the republic decided to borrow money to build the required infrastructure for which the interest payments started with a rate higher than the traditional lenders in the West.

This insatiable appetite for cheap loans has to be controlled. At the end of the day borrowed money has to be returned with interest. The two calamities, (Floods and Debt) that threaten the very survival of the nation have to be treated in tandem otherwise both will remain unresolved and turn into an unbearable burden.

In the land of the pure, most projects in the last thirty have been launched on the basis of kickbacks. Starting with the Independent Power Producers (IPP) all the way up to CPEC, it is a mind-boggling trail of compromises with total disregard for long-term national interests.

The rulers have not missed any opportunity to increase personal wealth causing a huge burden for the people to support. Today the republic produces unaffordable power and imports Liquified Natural Gas (LNG) at an unbearable cost. The Orange Line Train of Lahore cannot even pay its electricity bills, let alone interest payments.

With the availability of 175 billion tons of local coal, most plants are using imported fuel. The previous government started to build dams and use local coal which should continue together with the production of Synthetic Natural Gas (SNG) from the Thar deposit. The energy security of the country stands seriously compromised which has to be checked.

Read more: Port Qasim coal-fired power station proposed using RMB

The only way forward

Pakistan needs an effective water management plan to maximize the potential of this important natural resource. Reservoirs and dams have to be built together with harvesting to raise the depleting groundwater table.

There has to be a moratorium on all future borrowing once the current debt burden is written off. The party for the few, funded through borrowed money must come to an end to provide relief to the many. Pakistan and its 220 million people have been used as collateral to get hold of inexpensive money that is now unpayable. Lessons must have been learned from the devastating earthquake of 2005 and the ravishing floods of 2010 but unfortunately, no preventive measures were implemented. In AJK (Azad Jammu and Kashmir) the Turkish donors finally decided to implement their projects themselves instead of donating funds for this purpose.

Like water, the debt has also been mismanaged and squandered. While the leaks have to be plugged to protect national wealth, at the same time the water has to be saved to put it to better use to meet the scarcities when they come. As a nation, we cannot continue to rely on the life support systems of the West and our neighbor in the North. It is time to live and learn to breathe on our own before there is an internal collapse of our own mechanisms.

Read more:

In the words of my old man, “One must learn to live within means.” He had an interesting observation that in the land of the pure everyone is on the lookout for additional cash as budget restrictions are always defied. While time is defined and cannot be stored or stopped, money is a man-made entity that must be handled carefully and with clean hands, to be used frugally, and not wasted as has been the case in the land of the pure. Dirty hands have to be cut to save the nation from both floods and debt. A write-off is the only way forward.

The writer is the Ex-Chairman of the Pakistan Science Foundation. He can be reached at fmaliks@hotmail.com.The views expressed in the article are the author’s own and do not reflect the editorial policy of Global Village Space.