A Comparative Analysis* of Pakistan’s External Debt Performance in Two Eras Democratic Era (FY1989-FY1999) & Military Era (FY1999-FY2007)

Abstract

This research paper gives an in depth review of Pakistan’s debt performance during Fiscal Years 1989 to 2007. The objective of the research was to study debt situation of Pakistan and develop a statistical framework using Binary Recursive Tree to analyze and compare the debt management performance of Pakistan during two eras namely: The Democratic Era (FY1989-FY1999) and Military Rule Era (FY1999-FY2007). The Binary Recursive Tree was used to analyze era wise performance based on the mean values of important debt indicators compared to benchmark values. The outcomes of the BRT analysis show that the Military Era had performed better than the Democratic Era, but as mentioned there are several external factors, which affect the debt performance of a country. BRT analysis for the Democratic Era showed that the Era as a whole was crisis prone; on the other hand the Military Era comparatively was not crisis prone.