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Foreign Debt and Debt Servicing Relief Effect Implications in Pakistan: A Poverty Reduction Strategy

Author

Listed:
  • Muhammad Shahid

    (Waheed Ullah, Head of Department Economics, Govt. Post Graduate College Bhakkar, Punjab, Pakistan.)

  • Mahmood Shah

    (Professor, Chairman Department of Economics, Gomal University D.I Khan, KP, Pakistan.)

  • Bibi Aisha Sadiqa

    (Assistant Professor, Department of Economics, Hazara University, Mansehra, KP, Pakistan.)

Abstract

The study interrogates the critical thresh hold limit of the external debt where the highly indebted economy becomes hanged and stagnant, pushes the economy towards. deeper poverty even below the poverty line. The other horizon aspect of relief in debt servicing is attributed to American and Russian war of 80s and war on the terror against Afghanistan after 9/11 forced the debt issuing agencies like Paris and Non-Paris Club and other lending aliened countries rescheduled and cut down debt servicing of Pakistan. This study examined the foreign debt effect on poverty by assuming dataset over the period from 1984 to 2017. The ARDL to co integration Approach was applied to get the findings that after debt thresh hold limit and debt overhang point, the foreign debt causes poverty in case of Pakistan. The other dimension if relief in debt servicing is provided this economic action depressed poverty.

Suggested Citation

  • Muhammad Shahid & Mahmood Shah & Bibi Aisha Sadiqa, 2019. "Foreign Debt and Debt Servicing Relief Effect Implications in Pakistan: A Poverty Reduction Strategy," Global Economics Review, Humanity Only, vol. 4(4), pages 23-34, December.
    • Handle: RePEc:aaw:journl:v:4:y:2019:i:4:p:23-34
    DOI: 10.31703/ger.2019(IV-IV).03
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    References listed on IDEAS

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    1. Rehana Siddiqui & Afia Malik, 2001. "Debt and Economic Growth in South Asia," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 677-688.
    2. Abu Siddique & E A Selvanathan & Saroja Selvanathan, 2015. "The Impact of External Debt on Economic Growth:Empirical Evidence from Highly Indebted Poor Countries," Economics Discussion / Working Papers 15-10, The University of Western Australia, Department of Economics.
    3. Mr. Alexander Pivovarsky & Mr. Benedict J. Clements & Mr. Sanjeev Gupta & Mr. Erwin H Tiongson, 2003. "Foreign Aid and Revenue Response: Does the Composition of Aid Matter?," IMF Working Papers 2003/176, International Monetary Fund.
    4. Javeria Naeem & Saadia Sherbaz, 2016. "Indebtedness and Poverty: The Case of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 823-835.
    5. Taha Zaghdoudi & Abdelaziz Hakimi, 2017. "Does external debt- poverty relationship confirm the debtoverhang hypothesis for developing counties?," Economics Bulletin, AccessEcon, vol. 37(2), pages 653-665.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    ARDL Approach Poverty Reduction; External debt; Relief in Debt Servicing; FDI; Pakistan.;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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