The PML-N government completed its tenure on the 31st May 2018. The State Bank of Pakistan, the countries Central Bank confirmed the countries external debt and liabilities (EDL) reached $91.7 billion. This means it is just a matter of time before the debt will reach $100b -the IMF has forecasted this to be by June 2019 [1]. This is an increase of over 50% or nearly $31 billion in four years under the PML-N government.
With an annual budget of only $47 billion, the Pakistan government has regularly sent the begging bowl around the world to keep its economy afloat. Even before the 25th July elections $8.5 billion in repayment is due.
Irrespective of who forms the next government it will inherit this precarious debt situation and will have to come up with a viable solution. Successive Pakistani governments have surrendered the nation’s sovereignty to Western economic institutions which are bankrupt of any real policies that would rid Pakistan of such servitude.
Here we present a handful of policies that would raise revenue, address foreign debt commitments and potentially end foreign dependency.
1. Thar Coal
The Thar Coalfield in Sindh is the world’s largest coal field. It is one of the world’s largest lignite deposits discovered, spread over more than 9,000 sq. km it comprises an estimated 750 trillion cubic feet (TCF) of coal. Successive Pakistani governments have never undertaken a full assessment of the field, neither have they any plans to mine the coal. The export of Thar Coal would generate revenues of over $1 trillion. Converted into oil Thar coal would generate over 650 billion barrels of crude oil, at a market price of $80 per barrel that would generate $5.2 trillion.
2. Reqo Diq Mine
Reko Diq is a small town in Chagai district, Balochistan. It possesses the world’s fifth largest reserves of copper and over 20 million ounces of untapped gold reserves. Pakistan’s gold reserves alone would bring in revenues of $25b (at current price of $1279 $/oz).
3. Offshore Energy
In its assessment report, the US Agency for International Development (USAID) estimated that Pakistan had massive deposits of 10,159 TCF of shale gas and 2.3 trillion barrels of shale oil. In its study, the USAID collected data from 1,611 wells, used 70% of data to prepare the study and sent samples to New Tech Laboratory in Houston for assessment. If these offshore deposits are developed they would bring in trillions to the nation.
4. Salt
The Khewra Salt Mines are among world’s oldest and biggest salt mines. Salt has been mined at Khewra since 320 BC in an underground area of about 42 sq miles. The Khewra salt mine has an estimated total of 220 million tonnes of rock salt deposits. At current market rates, this would bring in revenues of $13.2b. The Pakistan government still uses outdated methods to mine the salt, due to this it has a very low annual production rate of 325,000 tons salt per annum.
5. Agriculture
Pakistan has no shortage of fertile land. Pakistan’ largest food crop is wheat. Pakistan produces over 21 million metric tonnes of wheat, more than all of Africa (20 million) and nearly as much as all of Latin America (24 million tonnes). Pakistan is the 12th largest agricultural producer in the world with an agrarian output of $32b annually. Pakistan is already the largest producer of many household kitchen items. The Middle East, a-stone-throw-away from south Pakistan, is a huge potential market for Pakistani agriculture as the region is largely desert terrain.
7. War Cost
Fighting America’s war on terror has cost Pakistan dearly through the interruption to trade, instability and the channelling of vital funds away from health, education and key sectors to fund the war effort. Pakistan suffered huge losses, amounting to $67.93b, since 2001 [2]. This is money that could have easily been used for the benefit of the nation.
8. Arms Sales
The JF-17 is a fourth generation fighter jet, designed and developed jointly by China’s Chengdu Aircraft Industry Corporation (CAC) and Pakistan’s Pakistan Aeronautical Complex (PAC). The project costs were shared equally by China and Pakistan. The fighter jet is now being produced in Pakistan and block 2 is now coming off the production line which has more capabilities than the original. All Pakistan needs to do is develop an export list. At $30 million per unit the sale of 150 jets would net Pakistan over $2.5b.
Pakistan has ample resources to repay its debts many times over. Pakistan from some perspectives is in a better position demographically and from the perspective of mineral wealth on the eve of development compared to nations such as Germany and Japan who lacked the population and energy resources, but still overcame such challenges. What Pakistan needs is not more of the same failed policies of running to the IMF and the US but a new leadership which puts the interests of the Ummah first rather than America.
References
[1] https://tribune.com.pk/story/1661195/2-imf-report-pakistans-external-debt-climb-103b-june-2019/
[2] https://www.dawn.com/news/637894
