AOA
can anybody tell me( with source) the total external debt of our country?
and why do we take debt?
and how can we get rid of this debt menace?
can u quote example of any other country that is in the same debt situation as we are?

@Ayesha Ali

Total External Debts and Liabilities = 46.3 Billion US Dollars (in 2008), In 2009 it is projected to be around 50 Billion US Dollars. (Pakistan Economic Survey 2008-09).

Govt take debt because country has less savings. To fill that savings gap, resources are needed, which we take from internal sources i.e. from our own people and also from foreigners. Besides savings gap, other reason is that we export less goods and import more, thus we have gap in our international trade. To fill that gap we also need resources and those resources comes in shape of borrowing from foreigners. This is why we take loans.

How we can get out of this debt. There may be thousand ways to do that, but in my personal opinion it can be much easy as well as much difficult. We need only "Good Governance". Allah ne Pakistan ko boht potential diya hay.

In more technical words this can be accomplished if we:

1. Decrease the non productive expenditure.
2. Explore and utilize our resources by "OURSELF".(Word OURSELF is much much important).
3. Increase the productive capacity of our human resources by spending more on education and health.
4. Consistency in economic and political policies.
5. Better Law and Order situation.
6. Increase in our exports.
7. Increase in FDI (It is also promoted as a solution in traditional economics, however I dont like it).

List can go on ........

Yes there are countries that are/were in much worse situation than ours. Classical example includes countries from Latin America (Mexico, Argentina, Paraguay ...) that have gone through worst debt crisis during 1980's and 90's. Thanks to PetroDollars and North American Bankers, they were put in the worst crisis. But however they came out of it with the aid of IMF and WorldBank, although still debt problem is hovering over there.

Regards

ECONOMIC INDICATORS

Annual 2008/09
Foreign Debt $50.1bn
Per Cap Income $1046
GDP Growth 2.0%
Average CPI 20.77%

Monthly December
Trade Balance $-1.33 bln
Exports $1.58 bln
Imports $2.91 bln

Weekly January 18, 2010
Reserves $15.203 bln



(Source: Business Recorder => www.brecorder.com )

America is the biggest debtor of the world.
Tell you one more thing there are different financial institutions which lend money for different purposes.
For example in case of dwindling foreign reserves and exachange rate stabilization, IMF lends money. WHile if country want to invest in health and education,ports construction,and green technology etc world bank and Asian development banks are there.
But in many cases friendly countries also give loans on the soft terms.

These loans adversly affect the economy of a country because (in case of poor countries like pakistan) one third of total revenue generated goes to debt servicing.

__________________
Whatever mind can conceive,it can achieve - W.Clement Stone