A country in debt

This refers to the article ‘Where is the debt report?’ (Feb 23) by Mohammad Zubair. The writer highlighted the fact that the money borrowed by the PTI government during the last two and a half years is more than the amount borrowed by the PML-N in its five-year tenure. He added that borrowing by the PTI is the result of fiscal deficits. On the other hand, the PML-N took loans for investments in infrastructure and other development work. The facts are correct, but they don’t support the writer’s statement that the PML-N’s borrowing was justified and extremely reasonable.

If the benefits of a particular project are more than its cost, the income of the country will increase and the economy will grow. If the benefits are less than the project’s cost, the country will become poorer. If a project requires subsidies for its operation and maintenance, not only the initial investment will be lost, but the country will continue to lose money till the project lasts. The case with the PML-N’s investment projects is that the party spent more than Rs100 billion on BRT projects in Lahore, Rawalpindi, Islamabad and Multan which require subsidies of a billion rupees per month. The case of motorways is no different. For example, instead of fixing the problems that commuters face on GT Road (N-5), the last government built the M2 motorway. It increased the time required to travel between Lahore and Rawalpindi. When it comes to power generation, the less said the better. The cost of these projects is quite high. Also, the terms and conditions of the project are unfavourable to Pakistan. These projects have increased the country’s circular debt. It is safe to say that the PML-N borrowings didn’t benefit the economy.

Abdul Majeed

Islamabad