Analysis against Foreign Aid

Increases Debt Burden:

Foreign aid increases the debt burden on the economy. With more debt, a country is not viewed stable by the external world. Moreover, it increases the risk of default.

Increases Corruption:

In a developing country, if the government is not honest, then there is extreme possibility of corruption and wastage of resources. Corruption in foreign aid worsens the situation for any developing country which is already in need of finance.

Increases Inflation:

To retire debt and to pay interest on debt, the government increases money supply which increases inflation in the economy.

Increases Non-Development Expenditure:

The expenditure on retiring debt and paying interest on debt come under the bracket of non-development expenditure. A high non-development expenditure leaves little for expenditure on development.

Political Dependency:

A borrowing country will not only be indebted with money but also with political favors which it is supposed to provide for the loan providing country. Therefore, the foreign policy of a country remains in the hand of those loan providers and we remain at the mercy of their intentions.

Increases Stagnation:

Foreign aid increases stagnation. It decreases the desire and motivation to become independent. If a country becomes addicted to the foreign air, then it is very likely that in the long run, it will become dependent.

Idle Resources

Most of Countries has a lot of idle resources which are mot utilized for various reasons. With no water available in certain lands, they remain un utilized. Disputed lands also remain un utilized. Natural resources can't be extracted due to lack of advance technology. Due to unemployment, human resources remain un utilized.

Contract Of Affreightment

A contract of carriage of goods by sea is called as contract of affreightment. It is a contract by which a shipowner under takes to carry the goods of another in consideration of a price called "Freight". A contract of affreighment may take the form of charter party; or a bill of lading. The rights and liabilities of powers to such a contract are ground by the carriage of goods by Sea Act 1995 and the Bill of Lading Act 1856.

To Achieve Balanced Growth

Pakistan is historically an agricultural country. About 50% of the population is connected with agriculture. Historically, agriculture sector has had a dominant share in GDP. One major objective of economic planning is to achieve balanced growth in the economy by achieving growth in all sectors of the economy.

Money is a Store of Value

Money is a medium of exchange as well as a store of value. People not only demanded money to buy, they also demand money to save. In other words, all money is not used as a medium of exchange, some is also used as a store of value. While money is used with two different characteristics, it can never bring an exact proportional effect on prices.

Inefficient Debt Management

Debt Management is one of the most important function in the banking industry. But, in nationalized banks, there was no set criterion and mechanism through which loan was granted. This led to a huge increase in bad debt in the loan portfolio of these banks.

Consumers Suffers:
Consumers suffer from the hands of public sector monopoly. They don't have choices and substitutes and they have to remain satisfied with whatever quality they are provided and whatever price they are charged with against goods and services.

Insecurity of Job

Employees always live under the fear that they can be fired anytime. They have no security to the tenure of job. Moreover, with the recent privatization policy, employees are having a lot of uncertainties going into their minds.