Decades-old export loans extended by Pakistan remain largely unpaid, with five countries owing the nation a combined total exceeding Rs86 billion, according to recent audit findings. These debts, dating back to trade and development projects in the 1980s and 1990s, continue to weigh on Pakistan’s efforts to reclaim the funds.
Iraq Tops the List of Defaulters
Iraq is Pakistan’s largest debtor, with $231.3 million still outstanding—accounting for the majority of the overdue sum. Sudan follows with $46.6 million in unpaid obligations, while Bangladesh owes $21.4 million tied to sugar and cement projects funded by Pakistan decades ago. Guinea-Bissau’s outstanding loan is smaller but still notable at $3.6 million.
Collectively, these debts exceed $300 million, highlighting a persistent challenge for Pakistan’s financial recovery strategies.
Recovery Efforts Hampered by Political and Economic Challenges
The Auditor General’s Office first flagged these unpaid loans back in 2006-07, yet efforts to secure repayment have made little headway. Officials from the Ministry of Economic Affairs note that Pakistan has repeatedly pursued recovery through diplomatic avenues, including formal reminders, demand notices, and joint ministerial committees.
However, persistent economic instability and political crises in the debtor nations have complicated repayment efforts, leaving the funds effectively out of reach for years.
Calls for Higher-Level Intervention
Audit authorities are urging that the matter be escalated to the highest political and diplomatic levels. They warn that delays not only prolong financial losses but also erode the value of the owed amounts as currency depreciation continues to affect repayments.
Experts suggest that without sustained international engagement and negotiation, Pakistan risks further setbacks in recovering these long-standing debts.
