Pakistan Prime Minister Shehbaz Sharif has expressed disappointment over his country’s dependence on foreign loans, saying seeking financial aid hurts national self-esteem and is a cause of embarrassment for officials including army chief Asim Munir.
Addressing Pakistan’s leading exporters and business leaders at an event in Islamabad, Sharif stressed the debt burden on Pakistan’s dignity, and pointed to the need for alternative economic strategies.
According to local broadcaster Altv, Pakistan Prime Minister Shehbaz Sharif said, “When Field Marshal Asim Munir and I go around the world begging for money, we feel ashamed. Taking a loan is a huge burden on our self-esteem. Our heads bow in shame. Whatever work they want us to do, we are not able to say ‘no’ to many of them.”
Sharif’s admission of “begging” for a loan highlights the country’s economic difficulties and its dependence on international aid. This comes at a time when Pakistan is seeking support and loan repayment from the International Monetary Fund.
He also praised “all-weather friend” China as well as Saudi Arabia, the UAE and Qatar, who have supported Islamabad in both good and bad times, regardless of circumstances.
Pakistan’s economic lifelines are largely dependent on China, Saudi Arabia, the UAE and Qatar, which provide vital financial support to stabilize foreign exchange reserves and prevent a balance of payments crisis.
China has stepped forward billions of dollars in safe deposits to help Pakistan meet debt obligations, with an estimated $4 billion for 2024-25. The China-Pakistan Economic Corridor (CPEC) is an important framework, with over $60 billion invested in energy and infrastructure.
Saudi Arabia increased deposits with the State Bank of Pakistan by $3 billion in December 2024 and provided an oil payment facility of about $1.2 billion in 2025. Riyadh has pledged to make significant investments in mining, agriculture and IT, with potential plans ranging from $5 to $25 billion.
The UAE extended the term of a $2 billion line of credit to early 2025 and committed to invest billions of dollars in Pakistan’s energy, port operations and waste water treatment sectors, with a target of $10-25 billion.
Qatar has signed a protocol to realize $3 billion of investments focusing on aviation, agriculture and hospitality, and is a major energy supplier, particularly for LNG.
These countries are important for Pakistan’s economic stability, as investment and aid flow through frameworks such as the China-Pakistan Economic Corridor (CPEC) and the Special Investment Facility Council (SIFC).
Sharif also expressed concern over rising poverty and unemployment and regretted the lack of growth in research and development and innovation.
Pakistan is facing a severe socio-economic crisis, with poverty rates estimated to reach 45% of the population, further exacerbated by inflation and floods. The unemployment rate has reached approximately 7.1%, with over eight million citizens unemployed, while exports are still largely dependent on textiles and other goods.
According to recent estimates, about 45% of Pakistan’s population lives below the poverty line, up from 21.9% in 2018. Extreme poverty is set to increase from 4.9% to 16.5% by 2022 due to floods, inflation and macroeconomic instability.
The unemployment rate is 7.1%, and more than 80 lakh people are unemployed. Educated youth are struggling, and unemployment is widespread in the informal sector (85% of the workforce).
Pakistan’s exports have come to a standstill, dominated by the textile industry. There is potential in software, agriculture and animal husbandry, but structural problems and low productivity hinder development.
It is noteworthy that Pakistan is currently facing a serious debt crisis, the total public debt is expected to exceed Rs 76,000 billion by March 2025, which has almost doubled in just four years. The country is heavily dependent on financial assistance from the International Monetary Fund and loans from China—particularly for China-Pakistan Economic Corridor (CPEC) projects—to service debt and avoid default.
The Pakistani Prime Minister’s admission confirms a structural weakness that has gone beyond mere economic cycles to a permanent crisis, as many call it.
Historically, the Pakistani leadership has presented foreign aid as a “strategic partnership” or “brotherly support”. However, Pakistan’s traditional “geopolitical advantage”—that is, its ability to make money by taking advantage of its geographical location (which was used effectively during the Cold War and the War on Terror)—has now largely been eroded.
By involving the army chief in loan negotiations, the country is signaling to creditors that the military (the only institution considered stable) guarantees the loan, further blurring the boundaries of civilian rule.
Instead of building an export-oriented economy like Vietnam or Bangladesh, Pakistan has used borrowed “hot money” to maintain artificial exchange rates and finance imports for the elite.
Furthermore, Pakistan is currently in its 23rd IMF program. Without structural reforms (such as taxing the landed elite and the retail sector), each loan only covers the interest charged on the previous loan.
Ironically, Pakistan has reportedly paid huge sums of money to get a seat on Donald Trump’s peace board, raising questions about priorities. Using significant resources to gain influence in high-level political circles highlights a major cognitive paradox in Islamabad.
While the public is grappling with record-breaking inflation and an energy crisis, the government continues to invest in “perception management” and lobbying.