In a long and detailed article, Finance Minister Ishaq Dar recently took the extraordinary step of engaging with his critics and presenting a painstakingly detailed picture of the sustainability of Pakistan’s external debt.

To the extent that the external debt servicing capacity is a crucial determinant of the country’s stability, he is right to go to the lengths he went to in an attempt to reassure what he calls the “inherently sceptical” analysts who keep sounding the alarm over a deteriorating external sector.

With debt levels rising and exports shrinking, people are entitled to be alarmed about the future sustainability of the nascent economic recovery under way in the country. After all, it has been our history to achieve short-term comfort in the reserves position, only to lose it rapidly and return to the IMF for another round of stabilisation.

Have we finally broken that cycle, or are we simply sitting on another one of those comfortable perches that we have found ourselves occupying temporarily in the past as well? That is the crucial question at play here, and unfortunately, the finance minister’s detailed exposition of the numbers did little to address it.

The questions being raised about the reserves and the external sector are not about the immediate term, nor do they constitute a competition between the track record of his government and its predecessor. It is a bit disingenuous of Mr Dar to compare data from that five-year period to three years of his own performance. He is comparing data from his peak to data from the trough of the previous government’s record.

One could engage with the figures given by Mr Dar, but it has been observed that the finance ministry is adept at presenting numbers in such a way as to be able to make any argument it wishes to. The point is not whether net debt levels were higher in 2013 or in 2016. Nor is the cumulative annual growth rate of the external debt the salient fact here.

The central point is future debt service obligations, both public and private, because these are what will determine the direction that the reserves take.

Mr Dar has claimed that “[a]s of today, external debt servicing obligations for Pakistan are not more than an average of $5 billion per annum until 2021”. Yet data given by his own ministry to the IMF shows that external debt-service obligations, being the sum of interest payments and amortisation, climb beyond $8.4bn only the next year. This does not include income on direct investment by foreigners, which adds another $3.6bn to the burden as per projections in the IMFs 12th review.

The finance minister has had his say in excruciating detail, but the questions he sought to address still remain in place.

Published in Dawn, February 3rd, 2017