Pakistan will struggle to break out of a cycle of ongoing debt repayments without reform, former Prime Minister Imran Khan told a foreign publication in an interview. Khan told the publication that the government needed to break out of borrowing cycles that have held back developing economies. He, however, ruled out a default if his party returned to power, saying it would prioritise domestic reforms over seeking debt relief. “Whatever we do, when we look ahead, the debt is growing, our economy is slowly shrinking. From my party’s point of view, we’ve started thinking that we’re stuck,” the report quoted him as saying. He said “Pakistan will struggle to break out of a cycle of debilitating debt repayments without reform,” as the country’s opposition leader and former prime minister warns the debt burden on low- and middle-income economies is becoming unmanageable. Khan, whose Pakistan Tehreek-e-Insaf (PTI) party is favoured to win national elections this year, said that “from my party’s point of view, we’ve started thinking that we’re stuck.” Khan said the government needed to break out of borrowing cycles that have held back developing economies but ruled out a default if his party returned to power, saying it would prioritise domestic reforms over seeking debt relief. “Is the answer getting more loans, or is the answer to restructure the way we run the country?” he said.
“We have to conduct surgery in Pakistan in the way we run our government.” Khan said his team was developing a strategy if he returned to power in Pakistan to juggle loan repayments and domestic spending. “We’re sitting with our economists [on] how to come up with a plan with which we can sit with the IMF and give them a viable way of being able to pay our debts,” Khan said. “But at the same time, our economy should not be choked so that our ability to pay debt goes down.” “It’s not just Pakistan,” Khan said. “Once you start borrowing in dollars and you have to service your debt in dollars, if your dollar income doesn’t improve or increase, how are you going to then pay your debts? “Unless we increase our dollar earnings to exports, I don’t see how we would be able to service any debts in Pakistan, whether it’s Chinese or Paris Club or commercial debts.”
