By Abdul Rehman Patel
History teaches that states do not collapse overnight. The fall of the Roman Empire was not a sudden event; it was a slow, almost imperceptible decline, punctuated by crises and short-term fixes. In its final years, the imperial palace began selling its treasures. First went the carpets, then golden utensils, horses, and eventually even the pillars that symbolized the empire’s enduring power. Each sale was justified as a temporary necessity, a measure to keep the machinery of the state running. Yet, in the name of survival, the very foundations of Rome were eroded.
Pakistan is not Rome. Its geography, society, and political structures are different. Yet the logic unfolding today is disturbingly familiar. The country is facing a debt crisis of historic proportions. In a bid to manage immediate liabilities, the government is considering selling stakes in the Fauji Foundation to the United Arab Emirates, a transaction intended to eliminate an urgent $1 billion liability and potentially roll over nearly $2 billion in debt. According to Finance Minister Ishaq Dar, the deal is expected to conclude by March 31, 2026.
On paper, the transaction may ease pressure on a particular date. However, the deeper question is not whether a single liability can be managed. The question is where Pakistan stands in its entirety, and how decades of policy, or the lack thereof, have brought it to this juncture. By June 2025, Pakistan’s external debt had reached $91.8 billion. When domestic and external liabilities are combined, total public debt hovers around $286–287 billion. Meanwhile, the country’s entire economy is estimated at roughly $410 billion. More than half of the nation’s economic capacity is already consumed by debt obligations. The scale of the problem is staggering, but the numbers alone cannot capture the social and political ramifications of a state heavily mortgaged to creditors.
The current account deficit tells a similar story. A few years ago, it exceeded $17 billion, prompting the government to seek IMF assistance. Measures were taken to curb imports, the currency was devalued, and for a time, the deficit seemed contained. Yet by December 2025, these pressures are expected to resurface. The core problem—insufficient domestic revenue, low productivity, and structural inefficiencies—was never addressed. Temporary fixes only deferred the inevitable. Income did not rise, but spending was compressed. Governments have often blamed time constraints, arguing that five-year electoral cycles do not allow for structural reform.
However, this defence is misleading in Pakistan’s context. Over the last two to three decades, power has largely circulated among the same political families and alliances. Names may have changed, coalitions shifted, but the broader economic trajectory remained remarkably consistent. There was time, authority, and political space to implement meaningful reform. Yet small cracks—whether in tax policy, governance of state-owned enterprises, or the orientation of the economy toward exports—were never sealed. When those cracks were still small, Pakistan’s external debt stood at $40–50 billion. At that stage, tax reform, rationalization of state-owned enterprises, and policies to boost exports could have strengthened the economy.
Instead, every government deferred hard decisions, treating crises as temporary inconveniences. IMF programs were treated not as tools for structural transformation, but as oxygen tanks to keep the state afloat. The pattern repeated itself with predictable results. Today, Pakistan is under two IMF programs simultaneously: a $7 billion Extended Fund Facility and a $1.3 billion Resilience and Sustainability Facility. The reality is stark: IMF lending does not reduce debt—it merely postpones default. If IMF assistance alone were sufficient, Pakistan would not have sought external funding 23 times since 1958. The systemic nature of the problem is evident, and it extends beyond any single government or political party.
Against this backdrop, the sale of assets has become normalized. Pakistan International Airlines, energy assets, banks, and now institutions once considered untouchable, like the Fauji Foundation, are being offered to external partners. Each transaction may provide temporary relief, but it also chips away at the institutional and economic foundations of the state. The deeper concern is not the sale of an asset; it is the erosion of long-term capacity. When governments rely on selling what remains of their wealth rather than building sustainable revenue streams, they gamble with the country’s future.
(The Pakistani-origin American writer and columnist, sheds light on various social and political issues, can be reached at editorial@metro-morning.com)
