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| Pakistan on verge of financial collapse:experts | | | Despite massive military and non-military aid Islamabad has been receiving from the United States during the last about five years the provincial and the Federal Governments in Pakistan are on the verge of financial collapse.This information has ben given by Pakistan Finance Minister,Hafeez Sheikh,while talking to a group of select experts and politicians.Sheikh sounded so pessimistic about the financial strength of Pakistan that he stated that a situation was fast emerging when the establishment in Islamabad and in the provincial capitals may not have the money to pay the salaries to their employees.Reports indicate that Islamabad and the provincial Governments had placed all the eggs in the American basket.The US Government has continued to oblige Islamabad by funding it with millions of dollars and Pakistan Government has had to bank on the US aid for building various thermal and hydel power project.The country is already faced with acute shortage of
electricity with the result its industrial growh and improvment in the sectors of agriculture and horticulture have been quite slow thereby further affecting the financial health of Pakistan.What seems to have compounded the problem is the way Islmabad and the provincial Governments have been spending double than what their revenues are.Interestingly,on one side the rate of expenditure on even nonproductive activities has been going up and on the other there has been no increase in the revenue.Both the establishment in Islamabad and in other provinces have refused to resort to severe austerity measures.And without trying to realise the ultimate unhealthy impact of heavy borrowings from the banks and other financial institutions Islamabad and the provincial Governments continue to bank on heavy bank borrowings.Experts have cautioned even these bank to stop allowing overdraft to the federal and the provincial Governments because the rate of borrowing of
money from these banks would leave these financial institutions cashless.Another thing that has complicated the financial strength of Pakistan is the way the public sector undertakings have been digging big hole in the annual budgets,whether at the federal or the provincial level.The Government,according to official reports,has to provide financial assistance to the tune of Rs.250 billion per year.And again the principal actors and managers in these public sector enterprises have not shown any urgency in observing austerity measures because they have never felt the pinch when the financial support has never been suspended,not to talk of stoppage.The tragedy with these public setor enterprises is that the managers have never come under pressure from the Government for either observing austerity measures or for bringing these units out of red.This could have been done by initiating measures which could ensure improved production of finished goods.It
has not happened and like in Jammu and Kashmir these public sector enterprises have become nothing but a safe place for unemployed youths.Whether required or not a large number of Pakistani youths,educatd,skilled and unskilled,have found jobs in these units,which otherwise are sick.The result is heavy drain on the public exchequer.Since the establishment in Islamabad and in the provinces are not mentally and physically tuned to improve the financial health of Pakistan by way of improving revenues on one hand and ensuring decrease in the expenditure time is not far away when the US Government will carve out bigger bases in Pakistan. In fact Islamabad may have to play the second fiddle to Washington in order to ensure bigger monetary aid that could prevent Pakistan from facing total financial collapse.
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