Pakistan’s Prime Minister, Imran Khan, is in deep trouble as the public finances of Pakistan go haywire due to rise in debt. As per a report by Pakistani English Daily Dawn, the federal government of Pakistan is ready to mortgage Fatima Jinnah Park (popularly known as F-9 park) in Islamabad to secure a loan of 500 billion Pakistani rupees.
The meeting between the Prime Minister’s House and a committee room of the Cabinet Division on “Issuance of Domestic and International Ijara Sukuk Against Unencumbered Land of F-9 Park, Islamabad” is set to be held soon.
The move met with heavy criticism from the opposition parties and the Mayor of Islamabad has also opposed the move. But, the Pakistani government has very little options in order to secure loans. The public finances of the Imran Khan government are so troubled that no national or international agency would provide a loan without a physically available collateral.
In the past, many Arab countries including Saudi Arabia and the UAE have regularly provided loans to Pakistan whenever they needed, but due to Imran Khan’s growing proximities with the already bankrupt Turkey, the Arabic countries have refused to help it.
Imran Khan unnecessarily got caught in the fight between the Arab world and Turkey and endorsed an alternative Islamic alliance between Malaysia, Turkey, and Pakistan. However, with the change in regime in Malaysia, the Southeast Asian country dumped Imran Khan. However, Turkey, although in support of Pakistan, does not have money to help the Imran Khan government. So, going against the Arab world is costing heavily to the Imran Khan government.
Moreover, in the last few years, India has built a very good rapport with the Arab world and given the fact India is one of the biggest importers of oil from Arabic countries, they could not irk India by supporting Pakistan. Otherwise, India has a lot of options to explore for oil imports in the oil surplus world.
The other country which could have helped Pakistan is China. But, Chinese, being shrewd businessmen that they are, are not ready to finance Pakistan due to delays in China Pakistan Economic Corridor (CPEC). In the last few years CPEC projects have faced enormous problems in Balochistan and Gilgit Baltistan region, and to some extent in Punjab, too.
China has stopped funding for the CPEC project because Baloch freedom fighters and other non-state actors are in no mood to relent and see their resources get exploited by the Chinese. The non-state actors are so strong in Pakistan that the government of Imran Khan is not able to fast-track CPEC and the Chinese government has put a hold on financing.
The foreign debt, domestic debt, inflation, debt to GDP ratio- all have ballooned in the last two and a half years since Khan assumed power and GDP growth has slumped. The tax collections have fallen to all-time low and the Pakistani government does not have the capacity to repay its existing debt, and therefore no national or international organization is ready to give loans without a physical mortgage like the parks and land.