Soaring public debt

Even more appalling is theSBP’s forecast that the govt is on track to double the public debt by the end of its term

Debts are not bad if they are invested in development projects to bring socio-economic progress in the country, besides creating jobs and generating taxes. Such proper ultilisation of debts outweighs the cost of borrowing by spurring economic growth. That, unfortunately, has not been the case with Pakistan where money is primarily borrowed to service the debt obtained earlier, with the result that our public debt has continued to pile on and on — and at a faster pace, of late. See how. Between 1947 and 2008 i.e. during the first 59 years of the country’s existence, the successive governments made a Rs6 trillion worth of borrowing domestically as well as from foreign countries. However, the following 10 years — during which the PPP and the PML-N had one stint each at the Centre — saw the figure swelled to Rs24.2 trillion.

Then came the PTI, in 2018, with Prime Minister Imran Khan not just bitterly blaming the PPP and PML-N bosses for saddling the nation with huge debts but also pledging to cut the total public debt by half by the end of his government’s tenure in 2023. Untrue to his words though, Khan too stretched out a begging bowl, complaining of empty government coffers, so much so that left his predecessors far behind in obtaining loans, mainly from the IMF and some friendly countries. And according to a latest SBP report, the country’s total public debt has risen to Rs33.4 trillion as of February 2020 from Rs24.2 trillion at the time Khan took over. This shows an addition of Rs9.2 trillion to the debt burden, with the amount nearly equaling what each of the PPP and the PML-N had obtained during their full terms.

Even more appalling is the SBP’s forecast that the incumbent government is on track to double the public debt by the end of its term in 2023. Does that make a case for the PTI to be included in the debt probe ordered by PM Khan that primarily targets the PPP and the PML-N?

Published in The Express Tribune, April 11^th, 2020.

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