KARACHI: Pakistan’s growing debt burden is increasingly strangulating human development as an ever-larger share of public resources is diverted toward debt servicing instead of investments in education, healthcare, social protection, and economic opportunity, said Pasban Democratic Party (PDP) chairman Altaf Shakoor here on Sunday.
He said the budget once again highlights the magnitude of this challenge. Out of a total federal outlay of approximately Rs17.6 trillion, around Rs8.2 trillion — nearly half of the entire budget — has been allocated to interest payments and debt servicing.
“This single expenditure absorbs a substantial portion of national resources and leaves limited fiscal space for addressing the development needs of over 240 million citizens.”
He said our public debt has expanded dramatically over the past decade. Total public debt now exceeds Rs75 trillion, compared to less than Rs20 trillion a decade ago.
“The growing stock of domestic and external liabilities has created a situation in which a large share of government revenues is consumed simply to service past borrowing.”
He said the consequences for human development were profound. Pakistan continued to face serious challenges in education, healthcare, nutrition, water supply, sanitation, housing, and employment generation.
Millions of children remained out of school, public health facilities struggled with inadequate resources, and many communities continued to lack access to basic services, he said.
At the same time, the country faced increasing climate-related risks that required substantial investments in resilience, water management, disaster preparedness, and environmental protection, he said.
Altaf Shakoor said the urgency of the situation had been further underscored by the persistence of poverty.
According to recent estimates by international development institutions, nearly 45 percent of Pakistan’s population lives below the poverty line. Millions of families struggled to meet basic needs and remain vulnerable to economic shocks.
At a time when greater investment is needed to improve living standards and expand opportunities, the diversion of nearly half of the federal budget toward debt servicing raises serious concerns about the country’s long-term development trajectory.
He said every rupee spent on debt servicing was a rupee unavailable for building schools, training teachers, strengthening hospitals, improving water and sanitation systems, supporting vulnerable communities, creating jobs, and investing in the future of our youth.
Debt servicing expenditures did not directly created productive assets or generated economic opportunities; rather, they represented the cost of obligations accumulated over many years, he said.
He said the policymakers must recognize that excessive dependence on borrowing was not a sustainable path to development. While loans may sometimes be necessary to finance strategic investments and respond to economic emergencies, continued reliance on debt to fund recurring expenditures risks trapping the country in a cycle of borrowing and repayment.
A fundamental shift in economic policy was, therefore, required, he said, adding priority should be given to expanding domestic revenue generation through broadening the tax base, improving tax administration, reducing leakages, documenting the economy, and encouraging productive investment.
“Equally important is the need to improve public expenditure management, curb wasteful spending, and ensure that scarce public resources are directed toward sectors that generate long-term social and economic returns.”
He said Pakistan possessed significant untapped potential in agriculture, minerals, fisheries, information technology, manufacturing, tourism, renewable energy, and the broader blue economy. Strategic investments in these sectors can strengthen exports, create employment opportunities, expand the tax base, and reduce dependence on borrowing.
He said the international experience demonstrates that debt dependence is not an irreversible condition. Countries such as South Korea, Indonesia, Rwanda, and Vietnam have successfully reduced debt pressures through a combination of fiscal discipline, stronger domestic revenue generation, export growth, economic diversification, and investments in human capital. Their experiences show that sustainable development is best achieved through productivity and economic expansion rather than continued reliance on loans, he said.
The challenge of rising debt is not merely a financial issue; it is fundamentally a human development issue, he said. When nearly half of the federal budget is devoted to debt servicing, the country’s ability to invest in its people is inevitably constrained. “This undermines efforts to reduce poverty, improve public services, and build a more resilient and prosperous society.”
Shakoor said as policymakers chart Pakistan’s economic future, reducing debt dependence and prioritizing human development must become national priorities. Sustainable progress cannot be achieved through perpetual borrowing. It can only be achieved through stronger revenue generation, productive investment, fiscal responsibility, and a sustained commitment to improving the lives of the people.
Copyright Business Recorder, 2026
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