Pakistan’s debt

This refers to the news report ‘Govt adds $7.8bln to debt, liabilities in 2 years’ (Oct22). Our government always confuses the people when it comes to debt. It usually tries to paint a better picture of debt management. It shows public and non-public debt/liabilities separately to depict a lower level of borrowings during the past two years of the government. The exclusion of borrowings by SOEs, the private sector and the SBP is not logical as debts/liabilities of any entity in Pakistan represents the obligation of the state and has to be liquidated from foreign exchange earnings of the state/SBP reserves.

The actual figure of aggregate borrowings by the government itself (for financing budget deficit), SOEs, private sector and SBP liabilities amount to $17.6 billion while the outstanding debt/liabilities stand at $113 billion as per the SBP’s records. So far, the government’s debt management remains skewed.

Arif Majeed

Karachi