As if Pakistans economy wasn inundated enough under massive public debt, another deluge of loans is on the cards in the form of long term companionship with the IMF.
At current levels of domestic and foreign debt, the government is seen breaching its fiscal responsibility laws with debt-to-GDP ratio of about 56 percent; the maximum limit being 60 percent.
As is the usual case, laws are not a problem: the government might tweak either the legislation, or its interpretation, or otherwise it may revise either of the debt or GDP numbers. But that won dilute the issue of debt sustainability.
The real solution lies in increased revenue mobilization and massive privatization. Reforms to achieve the former have been a stalemate for lack of political will, ill preparedness of the revenue department, and its overall diminished acceptance in the business community and public at large.
As for the latter, there is little even the former Privatization Minister, now Finance Minister Dr Hafeez Shaikh can do. Ideally, privatization officials would like to sell profitable units first - the likes of Pakistan State Oil.
But given the interest of the khakis in firms like PSO or National Highway Authority and their overall perception of being strategic assets, the sale might be eventually blocked.
Efforts to dispose off the white elephants in an investment environment like Pakistan could prove futile even if the PSEs are restructured, corporatized and made efficient, which itself seems to be a distant dream.
"Then we must get some foreign loans written off," some corners argue, citing Pakistans importance in the US-led war against terror, and also the precedence of Egypts case.
At the time of the Gulf War, the Arab country convinced United States to write off some $7 billion of debt, while asking others to follow suit.
By early 1991, Egypts foreign debt had decline from nearly $50 billion to $36 billion. In May 1991, the Paris Club decided to write off $10 billion of the $20 billion debt over a three-year period and to reschedule the payment of the remaining $10 billion.
But can Pakistan play the same card? Nay, at least not with the same ease. First, the US-Egypt relationship had an Israeli connection that worked as a charm on the United States. Second, most of Pakistans loans are multilateral and not bilateral.
Unlike bilateral loans, which are relatively easier to get written off, multi-lateral loans have rarely been waived unless the country declares itself as a Heavily Indebted Poor Country (HIPC), which has its own repercussions.
So what the government will have to do is moral suasion: i.e. play the flood card and try arguing with the multilateral agencies (World Bank/ADB) that they should write off the loans under the premise that they aren just lending agencies but also poverty fighting institutions.
"It is a matter of compassion, not a matter of law," Prof. Shameem Akhtar, former Chairman Department of International Relations at Karachi University asserts, adding that the ADB/World Bank law only says that their Board of Directors can exercise its discretion if it wants.
Knowing that voting powers in these agencies are proportionate to the economic size and contribution of each representing country, the United States, Japan, Germany, France, the UK, China, Russia and Saudi Arabia are some of big players who can have their say if they want.
The question of whether they will support Pakistans case in getting multilateral loans waived off is worth a million dollars, or may be more.
On the face of it, it may sound doable given Pakistans importance in the war against terror, and risks of deepening extremism if the post-flood rehabilitation and reconstruction is not managed properly.
But in reality its going to be a hard sell. If Pakistan fails to gets its diplomatic act together to get its loans waived off, then Pakistan will be running out of trump cards, and the debt parasite will live longer than previously thought.