‘We beg for loans’: Pakistan PM’s blunt confession

Islamabad: Seeking foreign loan had forced Pakistan to “bow” its head and make compromises at the “cost of self-respect”, Prime Minister Shehbaz Sharif has said in a candid admission about the humiliation involved in approaching “friendly countries” for financial aid.

Addressing a ceremony held in honour of the country’s eminent businessmen and exporters here Friday, Sharif recalled the difficult period when Pakistan faced fears of bankruptcy and was described by some as being on the verge of technical default.

“When we assumed office, the economic situation was extremely fragile, and the common man faced severe hardships,” he said.

The prime minister referred to his meeting with the Managing Director of the International Monetary Fund (IMF) in Paris in 2023, after which the global lender approved an economic programme that helped stabilise the country’s economy.

Sharif said friendly countries had fully supported Pakistan during difficult times and that, together with the Chief of Army Staff and Chief of Defence Forces, Field Marshal Asim Munir, he had met leaders of several countries to seek loans worth billions of dollars.

However, he said, “How should I tell the way we requested friendly countries for loans? The friendly countries didn’t disappoint us. But the one who goes to seek a loan, his head is bowed down.”

The prime minister said loans also create obligations that have to be fulfilled.

“When you go seeking loans, you have to pay the price at the cost of your self-respect. You have to compromise… Sometimes, undue demand may come up, and you have to implement it even when there is no reason to fulfil it,” he said.

Pakistan heavily relies on financial aid from several countries, including China, Saudi Arabia, the UAE, and Qatar, to manage its foreign exchange reserves and debt. These nations, along with the IMF, provide regular loans and rollovers to the cash-strapped nation.

During the event, the prime minister rolled out relief measures for industries, including a reduction of PKR 4.04 per unit in electricity tariffs, and said the wheeling charges would be brought down to PKR 9 to boost exports and support the business community.

He further said the government was reducing the export refinance scheme rate from 7.5 per cent to 4.5 per cent to provide immediate relief to businesses and accelerate export-led growth.