Qarz Utaro Mulk Sanwaro : A scam or a fraud?

In Pakistani political discourse, it was continuously mentioned by pro-Musharraf and anti-PML(Nawaz) groups that National Debt Retirement Program (NDRP) infamously known as Qarz Utaro Mulk Sanwaro launched by Nawaz Sharif in his second term to mobilize national (domestic as well as from diaspora) funds to pay off expensive local and/or international debt was a scam as their wasn’t any noticeable reduction in national debt.

Below I present excerpt from State Bank of Pakistan (SBP) Annual Report 2001 (when Nawaz Sharif was in exile and General Pervez Musharraf was ruling as president) so that reader cannot claim that we are talking fudged numbers here.

The National Debt Retirement Program (NDRP) was launched on February 27, 1997 to solicit funds from non-resident Pakistanis (NRPs) towards retiring the country’s external debt. Resident Pakistanis were also allowed to participate in the scheme using their foreign currency accounts, FEBCs, FCBCs, traveler cheques, remittance from abroad or by surrendering hard currency. Deposits in three currencies (US Dollar, Pound Sterling, and the German Deutsche Mark) could be placed in the following:
  • An outright donation with no payback (referred to as NDRP I).
  • Qarz-e-Hasna deposits for a minimum period of two years; no interest payments but principalrepayments could be taken in Rupees or hard currency (NDRP II).
  • A profit bearing deposit for a minimum period of two years (NDRP III).


Table 8.9 shows the total stock from NDRP I, II, & III as of end June 2001. The majority of these donations, Qarz-e-Hasna, and profit bearing deposits were made in the first year of the scheme. Subsequent years have seen minor inflows. As can be seen from the table, the largest inflows havebeen in the profit bearing deposits.

As far as the usage of NDRP funds is concerned, the equivalent Rupees generated under NDRP I & II are credited to the government account with SBP. The foreign exchange component, against which these Rupees are generated, form part of the central bank’s foreign exchange reserves. The federal government has used these Rupees to retire domestic debt of about Rs1.7 billion, which carried a 17.3 percent rate of interest per annum. Inflows from NDRP III form part of SBP’s foreign reserves, while the generated Rupees are credited to the mobilizing institution. For collections in Rupees, the amount collected by commercial banks is surrendered to the relevant SBP local office, which credits the government account on receipt.

Below is a table extracted from SBP Annual Report 2008


National Debt Retirement Program row shows that SBP paid off the funds to the creditors.

Just to put things in perspective, Pakistan’s external debt was in excess of US$ 30 billion and Qarz Utaro Mulk Sanwaro raised around $178million in foreign currency which is equivalent to less than 0.6% of our external liabilities.

When people say that Nawaz Sharif expropriated funds of Qarz Utaro Mulk Sanwaro scheme, they have no idea what they are talking about. That is why, you will see that politicians or journalists do not make such claims on media_electronic or print. Its only their supporters in the general population.

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