Pakistan's Case For Debt Relief

Zahid Malik, Editor-in-Chief of The Pakistan Observer, the most jingoistic of Pakistan's English-language dailies, admits that Pakistan, which possesses both a world-class army and nuclear weapons, is an economic basket case. He wants Pakistan to ask the world community, after taking into consideration the devastating floods ravaging the country, to "write-off" $53 billion in foreign debt. Mr. Malik didn't use the word "forgive" because that would mean Pakistan is begging the world community, which, according to Mr. Malik, they are clearly not.

It is a very interesting article that highlights both Pakistan's image problem and the writer's delusions. Before we go on, it's good to note, however. that Mr. Malik does makes a good case for debt relief:

Now that it is recognized internationally and by the UN that losses from the unprecedented floods were more than the 2004 tsunami, 2005 Pak earthquake and the 2010 Haiti earthquake, therefore, I think Pakistan needs much more than just assistance for relief and rehabilitation. The losses to infrastructure alone are so high that Pakistan would not be able to recoup in the next five years. Almost the entire Kharif crop of the country has either been washed away or adversely affected by the floods translating into losses worth trillions of rupees to the farmers and the national economy

No one can argue with this line of reasoning, but the question is: is anyone listening?

If we look to the response of international community received so far, though we do not want to make any comparison, it is like peanuts to the assistance given to Haiti. We have been pledged just over $ 815 million as against $ 5.3 billion aid to Haiti. The international community went in a big way for Haiti because two former American Presidents Clinton and Bush pursued the case of relief and reconstruction of the tiny Island State.

Interesting comparison. Haiti is one of the poorest countries on this planet; so wretchedly poor, in fact, that it possesses little or anything of value except people, and most of them live in abject poverty. Pakistan, on the other hand, is no Haiti. It is rich in natural resources, fertile agricultural land, and has an industrial base. Pakistan is definitely richer than Haiti. For example, Pakistan spends like a drunken sailor to buy weapons for its military. Currently it is shopping for a contract to buy radar systems for its new JF-17 fighter aircraft, a deal estimated over $1 billion. In fact, defense spending is the second biggest line item of Pakistan's annual budget, behind debt servicing. This from a country that not only has nuclear weapons, but affirmed the right to use them (against India, who else?) as a first-strike weapon.

Mr. Malik thinks that not only should the world community write off Pakistan's foreign debt, but compensate it for being on the front line in the "global war on terror":

Therefore, what I am talking about is building a case quantifying the facts by the experts and with input from the Provincial Governments and endorsed by the DNA of WB and ADB about the huge flood losses. Aid for the flood damages should also be accompanied by a demand of $ 60 billion which according to my assessment Pakistan suffered in the war on terror and the resulting losses of human lives, infrastructure and so many other expenses. In fact Pakistan has been suffering continuously since 1979 when we joined the civilised world to oust the Soviet Union from Afghanistan.

Mr. Malik does not say how he arrived at the princely sum of $60 billion, but given how much money the United States has given Pakistan since 1979, and will give in the future, it sounds like something an extortionist or a blackmailer would demand. Let's, for the sake of argument, we forgive Pakistan's foreign debt and "compensate" it to the tune of $60 billion, what guarantee do we have Pakistan will spend the money on human development and rebuilding its infrastructure? How much of it will be squandered, stolen, or handed over to the military to maintain an army it doesn't need?

Because ven in the best of times, Pakistan was a beggar country. Almost every Pakistani leader begs China, Saudi Arabia and the United States for money on a regular basis. Yet it has the temerity to demand equal treatment, like a partner or friend-- an equal. What do you call a "friend" who keeps borrowing money from you and never pays you back even though he can? A moocher. A freeloader. Haiti, at least, admits its poor, but Pakistan is poor but doesn't want to admit it.

Will the world community forgive Pakistan's foreign debt? I don't think so. Pakistan just cannot be trusted: specifically, its leadership cannot be trusted. At best, the debt will be restructured in some fashion so Pakistan can use the savings for flood relief. The world community would be more amenable, in my opinion, if Pakistan agreed to certain conditions, but Mr. Malik makes it clear that Pakistan's sovereignty is not negotiable.

Pity. Hope Mr. Malik realizes 'beggars cannot be choosers'.