KARACHI, Pakistan — Pakistan's long history of fiscal mismanagement has saddled the country with a crushing debt burden. Interest payments on the public debt consume a staggering 60 percent of government revenue. And external debt repayments coming due over the next five years amount to nearly $70 billion, dwarfing the $11 billion in foreign exchange reserves held by the country's central bank.
No wonder that some experts have started calling for a default and restructuring. Many others are still urging strict adherence to the three-year austerity program approved by the International Monetary Fund (IMF) in September to balance the books. Neither default nor austerity is likely to work, however, and both would inflict unnecessary pain.
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