Former US President Donald Trump has taken a new and important step related to global peace. In this initiative it is proposed to create an international forum named “Board of Peace”. Top leaders of about 60 countries have been invited to participate in it. Its main objective is to restore peace in the war-ravaged Gaza area and take forward the process of reconstruction. Both India and Pakistan have been included in this proposed board. According to the plan, countries that provide financial assistance of $1 billion for this initiative will be given permanent membership. In this context, let us look at the countries from which Pakistan has borrowed the most, and which country has the highest outstanding debt.
Pakistan trapped in debt trap
Pakistan is now known as a country that is heavily dependent on foreign debt to meet its needs. Pakistan’s foreign debt has almost doubled in the last 12 years. While Pakistan’s external debt was approximately $66.4 billion in 2011, it increased to $124.6 billion by 2023. This figure in Indian currency is more than ₹ 103 lakh crore.
How much loan did Pakistan take from IMF?
International Monetary Fund (IMF) has emerged as the most important source of support for Pakistan. In 2023, the IMF gave a $7 billion bailout package to Pakistan. This was followed by an additional $1.3 billion in March 2024 to combat climate change and strengthen the economy.
Role of Asian Development Bank
Asian Development Bank (ADB) is also a big bank giving loans to Pakistan. By December 2024, ADB has promised to provide a total of $43.4 billion in loans, grants and technical assistance to Pakistan. Currently, ADB’s portfolio includes 53 loans and three grants to Pakistan, totaling $9.13 billion. This also includes a $320 million loan for the development of rural roads in Khyber Pakhtunkhwa.
Big loan from World Bank
The World Bank has also signed a big financial agreement with Pakistan. In January 2024, the World Bank agreed to a $20 billion loan for climate change, private sector development, and other projects. In total, the World Bank has pledged approximately $49.6 billion in funding for 365 projects in Pakistan.
Who has the most debt?
According to statistics, about 30.1 percent of Pakistan’s total external debt is owed to multilateral organizations like the World Bank and Islamic Development Bank. Loans taken from IMF are about 5.7 percent of the total debt. Additionally, about 19 per cent of the loan is taken from bilateral agreements with countries like China, Saudi Arabia and Japan.
China becomes the largest lending country
China leads the list of bilateral loan givers. China alone accounts for about 57.9 percent of Pakistan’s bilateral debt. According to reports, Pakistan owes China approximately ₹12.27 lakh crore. This is being considered a part of China’s debt trap policy, in which it influences the decisions of countries with weak economies by giving them huge loans. Pakistan’s debt is expected to increase further under China’s Belt and Road Initiative.
Saudi Arabia and other countries
Saudi Arabia, which was once considered close to Pakistan, now seems to be distancing itself from investment. In terms of giving loans, Japan is at first place, followed by China at second place and Saudi Arabia at third place. Japan has given a loan of about ₹3.48 lakh crore to Pakistan, while the loan to Saudi Arabia is about ₹1.49 lakh crore. France, Germany and the United States have also given large amounts of money as loans to Pakistan.
