Let them eat debt.

MUHaMMaD MoHaD ZULFIQar Last Thursday, the UAE decided to roll-over an existing $2 billion and pledged an additional $1 billion loan to Pakistan. Similarly, the Saudi Fund for Development is considering bumping its deposits in our central bank to $5 billion and injecting investments of up to $10 billion. These developments come in the wake of the PM, and the Army Chief, touring several friendly nations; ostensibly, to garner money for cash-strapped Pakistan.But, none of this is new; every five years or so, a new government is sworn in, it proclaims economic woes, blames it on its predecessors and looks to the world for loans and economic aid.

Increasingly, it has morphed into a cyclical affair. But, what does our debt look like, exactly? Our debt repayments are astronomical, to say the least. In total, we owe roughly $100 billion to the world; we have to pay the bulk of this, almost $90 billion, in the next four fiscal years. Ominously, the State Bank's foreign reserves have plummeted to a nine-year low of about $4.3 billion; this is a cause for serious concern.Sadly, over the years, we have done very little to fix our economic maladies.

It reminds one of Einstein's Parable of Insanity: we do the same thing over and over and yet expect different results. Most reforms have been cursory at best, but window-dressing cannot solve our problem; we need a serious overhaul of our economic attitudes. So, the burning question is: how do we alleviate our economic miseries. Fundamentally, our problem arises out of an economic misalignment: every year Pakistan runs into twin deficits - a current account deficit and a fiscal deficit; in order to resolve our economic complications, we need to divert our attentions to balancing these deficits.

The first, our current account deficit, is rooted in our spending attitudes: we consume more from the world in imports than we produce and export to it. So, if we spend more dollars than we make we run into a deficit which we need to finance some way or the other. Over the years, we have turned to the IMF and other foreign lenders. This is where we run into an awry cycle: when we subscribe to these loans we pledge to return them at a mark-up; to cover these additional costs we need to make more dollars.

However, we are still running more current account deficits; so, we end up borrowing from other lenders to pay back our previous lenders, and to finance our neverending current account deficits. According to the...