Monstrous Debt

Pakistan's chief problem is a monstrous debt. Without monetary resources with which to fight the numerous problems of the nation, Pakistan remains overpopulated and poor.

Sources of debt Large military spending Long, costly war with India


Trade imbalance Imports exceed exports

Power/Fossil fuel issues

Debt controls budget Loans total 25% of revenues

Loan repayments equal 50% of expenditures

Social, economic, and educational programs lose


The debt accrued by Pakistan has come from several sources. Primarily this debt has accumulated due to the continuing conflict with India over the Kashmir region. Kashmir is a predominantly Muslim state within India. As such, the possession of this region has been a source of contention between mostly Hindu India and mostly Muslim Pakistan. This border conflict has been raging on and off for the last half of the twentieth century. Due to these hostilities, the Pakistani government spends roughly one fifth of its budget on its military, further limiting potential spending on social improvements and programs.

Another factor in the large debt, is Pakistan's dependence on foreign oil and other imported fossil fuels. As a nation, Pakistan uses 350,000 barrels of oil per day. Of this, 293,000 barrels per day are imported. Also, 1.1 million short tons of coal are imported each year. The combination of these two alone make up a huge part of the over one billion dollar trade deficit. These resources are used primarily for the generation of power.

Due to all of these sources of debt, half of government expenditures are dedicated to fulfilling debt repayment obligations. In order to finance these payments, additional grants and loans are required each year totaling approximately 25% of revenues. This prevents Pakistan from devoting significant resources to economic development and/or social improvements.