International Debt and Foreign Dependency: Policy Options for Pakistan

The economy of Pakistan is practically dependent upon foreign resources for its development. This is reflected in the foreign debt of Pakistan which is currently S 14 billion (Government of Pakistan 1989). The purpose of this study is to find out whether Pakistan will end up accumulating a very heavy burden of foreign debt if the present tendency of borrowing were to continue. Also, how would debt servicing affect further demand for external financing. Finally, how could the country break out of this vicious circle of dependency on foreign loans by following alternative strategies of development.