EDITORIAL: It says something about the country’s fiscal culture that the National Assembly’s economic affairs panel has had to ask for clarity on something as fundamental as the definition of public debt.
The committee’s concern, raised during an in-camera briefing on the IMF programme, points to a deeper problem in Pakistan’s approach to borrowing. When policymakers speak of debt in shifting terms, or reduce complex obligations to narrow categories, they risk telling themselves the most dangerous kind of lie: the one that sounds comforting enough to believe.
The panel’s argument is straightforward. The definition of public debt should reflect all government borrowing, not only the portions that fit neatly into reporting frameworks or policy narratives.
Members stressed that only a complete and transparent account can reveal how much the state owes, how much it repays, and how much new debt is required simply to keep the system afloat. Without such clarity, even the concept of a primary surplus becomes open to interpretation, if not manipulation.
The committee was right to highlight the need to explain how that surplus is used for debt retirement, and how it fits within the broader borrowing cycle. The fact that these questions are being raised now underscores how long they have been avoided.
Pakistan lives on debt, a point that seems to have become normalised within official circles. Yet normalisation does not make the burden any lighter, nor the risks any smaller.
Debt incurred for investment is one thing; debt taken to repay previous loans is another; and debt contracted merely to service interest obligations sits at the bottom of the scale.
The committee’s concerns suggest that the government’s own accounting language may be blurring these distinctions, perhaps unintentionally, perhaps not.
Either way, when a country’s borrowing is as persistent and structural as Pakistan’s definitions are not semantic exercises. They shape how policymakers understand their own constraints and how they justify their choices.
The committee did not limit itself to debt transparency. It also drew attention to a taxation structure that, in some cases, has approached a 60 percent burden on industry.
Members noted the consequences clearly: reduced competitiveness, deterred investment, job losses, and in some instances, relocation of firms. These are not abstract risks. They reflect how fiscal pressures are being felt in the real economy.
When tax rates climb to levels that distort business decisions, they compound the debt problem by shrinking the future revenue base that the state depends on.
The committee’s worries about industries scaling back or moving abroad are therefore part of the same broader conversation about fiscal sustainability.
The meeting also reviewed foreign training programmes facilitated by the Economic Affairs Division. On the surface, these initiatives are far removed from the debt debate, yet they fit into the same narrative about governance, capacity, and institutional competence.
The programmes aim to build skills in governance, public finance, energy, and other critical sectors, supported by partners ranging from Japan and China to the United States, Türkiye, and multilateral organisations. Their purpose is clear: to strengthen technical expertise and leadership capacity.
But the selection data presented to the committee revealed notable regional disparities, prompting questions about representation and the need for more equitable participation.
The committee also touched on longstanding infrastructure issues, most notably the Lyari Elevated Freight Corridor. Here again, the discussion revolved around the appropriate financing mechanism, with members concluding that the Public Sector Development Programme (PSDP) would offer a more dependable option than a public–private partnership.
The call to prioritise the project within the PSDP was framed as a strategic necessity for national logistics, not merely a local improvement for Karachi.
Taken together, these discussions form a picture of a state grappling with structural pressures on multiple fronts but still uneasy about confronting some of its own assumptions.
The panel’s insistence on a clear, comprehensive definition of public debt is therefore not simply a procedural demand; it is a reminder that honest accounting is the first step toward honest policymaking.
When a country is this dependent on borrowing, the cost of comforting illusions is too high.
Copyright Business Recorder, 2025