One can notice a shift in the national debate on how to manage rising unsustainable foreign debt as more analysts call for restricting foreign loans for “projects with high development impact’ and directing investment in areas of ‘comparative advantage’. This is necessary to build on the macroeconomic stability achieved thus far.

A former senior International Monetary Fund (IMF) Pakistani official says “The approach of accepting whatever comes in, on whatever terms, must end. Multilateral concessional financing should support demand-driven projects with high development impact.”

Ideally, countries should concentrate on sectors in which they possess a clear comparative advantage and import goods produced more efficiently elsewhere, says Ehsan Malik, former CEO of the Pakistan Business Council.

For Pakistan, he adds, comparative advantage is most apparent in sectors that effectively utilise its land, water and human resources, such as in value-added agriculture, mineral development, tourism and in globally demanded services like information technology (IT), medical tourism and professional services.

Between 2000 and 2022, Pakistan received about $50bn in official development assistance, but still ranks near the bottom of global human, social and economic indicators

Foreign assistance inflows to Pakistan almost doubled to $1.37 billion in the first two months of current fiscal year when compared to $714m last year, showing an increase of 93 per cent.

Inflows in August alone amounted to $680m, almost 152pc higher than last year’s $270m........

© Dawn Business