Pakistan’s economy has been paralysed by an unpayable and largely unjust debt burden that is preventing the country from reaching its poverty goals and hindering development, says a report presented by Islamic Relief during a national conference last week.

Islamic Relief has been campaigning for action on the country’s foreign debt burden since it published its ‘Unlocking the Chains of Debt’ report with the Jubilee Debt Campaign in 2013. The campaign highlights that Pakistan’s foreign debt burden has reached up to US $65 billion. It warns that annual repayments are set to increase dramatically to US $6 billion a year – more than three times what Pakistan currently spends on health and education combined.

Panellists called for responsible borrowing and lending.

Panellists called for responsible borrowing and lending.

The campaign criticises the International Monitory Fund (IMF) and international financial institutions for the crippling conditions attached to its loans, and calls for repayments to be frozen while the legitimacy of all debts is investigated. ‘Unlocking the Chains of Debt’ was presented at the Islamabad conference on Pakistan’s national debt, which took place on 16 September.

“The people of Pakistan have suffered from a crippling national debt for 40 years,” said Islamic Relief Pakistan outgoing Country Director Ateeq Rehman, addressing members of parliament, diplomats, civil society representatives, academia and the media.

“This debt has done little for the majority of Pakistan’s people. It has increased inequality and deepened impoverishment. Today, more than 90 million people live below the poverty line, and each Pakistani now owes 101,338 Rs (nearly GB £626) of public debt.”

Debt is suffocating public spending and hitting poor families the hardest

Abdul Khaliq, focal person for CADTM-Pakistan and Executive Director Institute for Social and Economic Justice, highlighted the impact of the debt on people’s lives and the extreme economic policies pursued in the name of paying unjust debt. Pakistan should not mortgage its future by being forced to borrow for the repayment of old loans, he maintained.

Dr Hany El-Banna presents the position paper to Ramesh Kumar, Member of the National Assembly and Advisor to the Prime Minister.

Dr Hany El-Banna presents the position paper to Ramesh Kumar, Member of the National Assembly and Advisor to the Prime Minister.

“Pakistan needs to become more serious about the issue, and get its own house in order,” added Adnan Cheema, incoming Country Director of Islamic Relief Pakistan. “The first step towards making Pakistan debt-free is to raise awareness and generate a massive debate. Islamic Relief Pakistan and its partners are geared-up to engage with decision makers.”

A host of panelists including chief executives, university professors and the previous Secretary of Finance called for responsible borrowing and lending – and backed the campaign’s demand for an independent debt audit commission.

“I really appreciate the Islamic Relief campaign,” said Mr. Ramesh Kumar, Member of the National Assembly and Advisor to the Prime Minister, who welcomed the Islamic Relief position paper presented by founding member Dr Hany El-Banna. “I will table a resolution in the National Assembly to establish a debt audit commission.”

‘Unlocking the Chains of Debt’ calls on the IMF and other foreign lenders, as well as the government of Pakistan, to protect and improve the lives of millions of poor people.