Loans, GDP, Health v. Defence spending: talking points
Pakistan’s economy is trapped in a boom and bust cycle with no growth spurt lasting more than 5 years. Low exports fail to generate forex reserves needed to sustain high growth, fueled by imports and local consumption. The worse came in 2020 after GDP slipped into negative territory for the first time since 1952.
Pakistan’s mountain of debt: High expenses (repayment of previous loans and security costs) and low revenue (tax evasion and losses of government-owned companies) leave Pakistan with no money to spend on its people. Deficits are plugged through more borrowing.
Defence spending v. Health
Faced with a health emergency, the Government of Pakistan has to revisit its policy. In the last decade, Pakistan’s spending on defence was higher than the world’s average. But spending on health was a distant south of the international average.