In a rare and candid admission, Pakistan Prime Minister Shehbaz Sharif Friday said the country had been forced to “bow its head” and make compromises at the “cost of self-respect” while seeking foreign loans from “friendly countries” during its recent economic crisis.
Addressing a ceremony held in honour of leading businessmen and exporters in Islamabad, Sharif recalled the period when Pakistan was staring at bankruptcy and was widely described as being on the brink of technical default.
“When we assumed office, the economic situation was extremely fragile, and the common man faced severe hardships,” news agency PTI quoted Shari as saying.
IMF programme helped stabilise economy
The prime minister referred to his meeting with the Managing Director of the International Monetary Fund in Paris in 2023, after which the IMF approved an economic programme that helped stabilise Pakistan’s economy.
Sharif said Pakistan received full support from friendly countries during the difficult phase and that, along 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.
Reflecting on the experience, Sharif said approaching other nations for financial help carried a heavy cost.
“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,” he said, adding that loans also create obligations that must 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.
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Pakistan remains heavily dependent on financial assistance from countries such as China, Saudi Arabia, the UAE and Qatar to manage its foreign exchange reserves and mounting debt. These nations, along with the IMF, regularly extend loans and rollovers to the cash-strapped country.
During the event, the prime minister announced a series of relief measures for industry, including a reduction of PKR 4.04 per unit in electricity tariffs. He also said wheeling charges would be brought down to PKR 9 to boost exports and support the business community.
Sharif further announced that the government was cutting the export refinance scheme rate from 7.5 per cent to 4.5 per cent, a move aimed at providing immediate relief to businesses and accelerating export-led growth.
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