Foreign debt can harm developing countries like Pakistan, according to a new book by Didac Queralt and a study by this writer. They show how foreign lending has historically led to economic and political instability, and reduced state sovereignty, in Pakistan and other regions.
Queralt, a political scientist, argues in his book Pawned States that foreign creditors have influenced the domestic policies and institutions of debtor countries, often to their detriment. He also explains how foreign debt has affected the international relations and conflicts among creditor and debtor states.
This writer, who conducted a study for the Pakistan Institute of Development Economics (PIDE), explores the impact of foreign aid and debt on Pakistan’s economy, society, and governance. He also analyses the challenges and opportunities for Pakistan to reduce its reliance on foreign assistance and achieve self-reliance.
Both Queralt and this writer agree that foreign debt is not a panacea for development, but rather a source of vulnerability and dependency. They also call for a serious reconsideration of the role and effectiveness of foreign lending in the developing world, and suggest ways to improve the management and accountability of foreign debt. Their works are timely and relevant, as the world faces a looming debt crisis amid the Covid-19 pandemic, which has hit the developing countries the hardest.
Their works are also engaging and accessible, as they combine rigorous research with clear and compelling writing. They are recommended for anyone who is interested in learning more about the history and politics of foreign debt, and its implications for the future of development and democracy.