Re: Musharraf's resume
Some great achievements of present government in economical front (debt): We should remember that all loans need to get serviced and carry interest. Many people are not talking about these amounts.
In 1999 Pakistan Foreign debt was around $38 billions and Pakistan was paying around $4 billions as interest on that loan (not capital but just interest).
[At the time of Zia’s death, foreign debt was around $14 billion with interest of around $1 billion dollar a year].
Actually, it was at times during NS period (1998) external debt was around $50 billions, but government of NS froze Foreign exchange account and in process turned around 10 to 12 billion dollar debts into Rupee debts (at the rate of Rs 46, when in open market dollar was over Rs 54).
Apart of dollar debts, in 1999 Pakistan had local debts of around Rs 1700 billion and was paying over 250 billion rupees interest on that debt (just interest … like payment on defence saving certificates, Khas depost certificates, Mahana amdani certificates and so on, where interest was around 18 to 19 percent a year)
[At the time of Zia’s death, local debt was around Rs 300 billion rupees, and interest on those debt was around 40 to 45 billion rupees a year]
Thus during last 8 years Musharraf government paid around 32 billion dollars as interest on pre-1999 debts plus around 2000 billion rupees interest on local pre-1999 debts.
Today Pakistan foreign debt is around 40 billion dollars, and that means, government paid around net 30 billion dollars on pre-1999 foreign debts in last 8 years. It is because if government had paid nothing than 38 (capital) plus 32 (Interest), means Pakistan total debt related to pre-1999 would have been 70 billion dollars today, but it is around 40 billion dollars.
Similarly, today Pakistan local debt is around 2300 billion rupees, and that means, government paid around net 1400 billion rupees pre-1999 local debts in last 8 years. It is because if government had paid nothing than 1700 (Capital) plus 2000 (interest) means Pakistan total debt related to pre-1999 would have been 3700 billion rupees, but today it is around 2300 billion rupees.
Actually, as interest are compunded, and thus if one takes compound interest than pre-1999 debt today would have been:
$ 38 billion (capital) + $50 billion (interest) = $87 billion dollars debt (pre-1999 debt increasing at the rate of around 11 percent interest a year).
Plus Rs 1700 billion (capital) + Rs 3500 rupee (interest) = Rs 5200 billion debt (pre-1999 debt increasing at the rate of around 15 percent interest a year)
Apart of this debt repayment, government replaced old debts with low interest new debts, means that instead of costing 4 billion dollars interest per year on pre-1999 debts, today Pakistan on around 40 billion dollars cost around 2 billion dollars interest per year.
Similarly, by reducing rupee interest rates on Pakistan saving accounts and instead of borrowing from public at high saving interest rate, government borrowing from banks at market interest rate, government has reduced over 250 billion rupees interest per year on pre 1999 debt of 1700 billion rupees to less than 150 billion rupee interest per year on present 2300 billion rupees debt.
Apart of above achievement, present government managed to accumulate around 16.5 billion dollars in reserves and increased federal tax collection from 308 billion rupees in 1999 (that was increasing at pathetic pre-1999 … 2 to 3 percent a year) to around 1000 billion rupees today (that is increasing at healthy rate of around 15 to 20 percent a year, and increased throughout last 8 years at healthy average rate of around 15 percent a year).
Plus government increased external trade from less than 18 billion dollars a year in 1999, to more than 45 billion dollars today. ………
One may ask how this could happen. The reason is that, these happened because of reduction in corruption. In past also Pakistanis use to send many billions of dollars as remittances but corrupts of Pakistan use to buy those dollars and use to send that abroad, thus depriving Pakistan of those dollars that Pakistan collects today, and there was huge corruption in tax collections that Pakistan managed to reduce today, plus misuse of funds was normal in past that has got reduced.