By Ismat Sabir
President Asif Ali Zardari said that the key to Pakistan’s economic development is trade not aid. However, the president terms the assistance not as aid but as payment for damages that the country has suffered due to its role in fighting the war on terror. It was also renamed by President Obama’s administration as ‘Overseas Contingency Operation’.
It has been proved that aid alone has not been able to cure sick economies of the developing countries and they are under the aid trap, which is steadily increasing day by day. Their dependence on foreign assistance to meet the budget deficit is rising, which is one of the aid conditionality and also forces them to hire foreign experts; and at the same time aid also accounts for a major expenditure item in the budget as the allocations for interest payments and principal as and when it becomes due. Pakistan pays under the head of debt and debt servicing, inclusive of domestic debt, to about 30 percent of the budget expenditure. Read More »Pakistan sinking in debt