Remorsefully, contrary to the existing euphoria surrounding the future of the domestic economy, especially after having met the International Monetary Fund (IMF) conditions and the ensuing China-Pakistan Economic Corridor (CPEC) investments, realisation has crept in that an introspective comparison with Greece has all the ingredients necessary to burst the optimist’s bubble. Perhaps it would be better to bury one’s head in the sand but then, where is the wisdom in pursuing an uninformed action? Risk identification is not synonymous with pessimism; a better strategy is the identification and pursuit of mitigating courses of action.While Pakistani news channels have been obsessed with sensationalising everything, the international networks and publications have been screaming Greece. This very dichotomy lends credence to the conspiracy that the former, at someone’s behest, deliberately keeps the mice, the populace, busy with surreptitious illusions, while the cats (the oligarchy) play. Or a lack of education might perhaps be the culprit behind the general deficit of common sense.To solve the puzzle of why Pakistan should learn from Greece, attention must be paid to the proliferating debt that the former continues to pile up unabashedly. Debt was Greece’s nemesis. Prior condonation is solicited upfront and, to clarify, the belief is that the growing national debt is an important enough topic to warrant repetition and broad dissemination, hence the effort today. “At the end of financial Year 2008, 61 years after independence, Pakistan’s total debt and liabilities stood at Rs 6.69 trillion of which external debt was Rs 3.15 trillion. At the end of March 2015, in less than seven years, Pakistan’s total debt and liabilities now stand at Rs 19.29 trillion of which external debt is Rs 6.38 trillion.” For the record, these numbers are from the State Bank of Pakistan’s website. The objective is not to bury democracy but to highlight the speed at which debt levels are growing. Admittedly, while Pakistan is nowhere near the level of debt that Greece has accumulated, it would be foolish to twiddle our thumbs until that comes about.So, how did Greece acquire its massive debt? The answer is found in the analysis offered by various international publications and websites but most concisely and precisely articulated by Stefanos Manos: “In Greece we produce practically nothing, and we were taking on massive debts just to live lavishly.” Remarkably, all this money was consumed in increasing the size of the bureaucracy and other public sector enterprises, and paying them annual bonuses and perks, regardless of performance. The state, in essence, borrowed money to pay itself, which goes to show how well informed the masses are when they enter a polling booth to cast their valuable vote — the backbone of a democracy.In order to keep the masses happy, the state was not motivated to collect taxes, which were massively evaded and corruption further obfuscated the situation. In the exceptional situation where an overzealous tax collector pursued the wealthy, the oligarchy could always count on friends in higher offices to put the matter straight. As the story goes, the national airline and railways were considered personal assets and free tickets were doled out to voters during elections. Doling out free tickets, thankfully, is something the PIA restricts for its employees only, although that in itself is a cumbrous cost.Principally, borrowing in itself is not problematic but neither is it an anodyne; ill-conceived excess and unbridled largess, however, always lead to a fatalistic financial crisis. External debt should invariably result in the generation of foreign currency from ongoing projects. After all, while a country can print its own currency, counterfeiting dollars might not be an option for most. Even in the case of projects financed by domestic borrowing, experts caution that, as a policy, cash from respective projects should have a positive net present value, irrespective of other economic or social benefits. Projects that continue to incur losses even after completion will be an endless drain on state resources.But the icing on the cake, in the case of Greece, is that all this time, while the party was at its peak, Greek officials were apparently misreporting the numbers and nobody in the European Union caught the deception. The dialectic covering the history of the Greece episode is an epochal comedy. Disconcertingly, the best economic minds in Europe were broadly ignorant of Greece’s capacity to ever pay a debt of 200 percent of its GDP.Before everybody starts jumping around in joy, Pakistan’s debt is no way near the 200 percent mark, but, dissenting from the pundits, the debt to GDP ratio is facetious ab initio. Even the pundits recommend different benchmarks for developed and developing nations, and, for the latter, an upper limit of 60 percent of GDP is deemed expedient. Pakistan has crossed this limit. But even at that level, the composition of debt between domestic and foreign is crucial since gross levels subterfuge the infection. The bailiwick principle for contracting foreign debt is the ability to meet future obligations, not by borrowing more but through the generation of additional foreign currency via a net trade surplus. In Pakistan’s case, despite selling valuable assets and following IMF imposed policies, the burden of foreign debt continues to increase.One reason for that is a stagnated export base, which is not because of lack of markets or the lack of resources for that matter but more to do with the lack of manufacture. Recall Mr Manos lamenting that Greece produced practically nothing. On the other hand, there seems to be no end to the nation’s desire for imported stuff. Recently, the central bank in Nigeria cracked down on imports in order to address the steep depreciation of their domestic currency. Faced with a currency war a few months ago, while Pakistan was able to successfully defend the rupee, the measures adopted can be termed as short-term arrangements. Even during those testing times, imports continued to increase rapidly, which in the long run will eventually adversely impact the rupee.As a rule, the entire horizon of foreign currency transactions has to balance at the end of the year, which means any leftover deficit will necessarily have to be met through additional foreign debt. It is frightening to even imagine what would have happened to the economy if Pakistanis abroad had not been remitting billions of dollars home every year. This year remittances were around $ 18 billion and the country still borrowed more dollars. No country in the world can keep on piling debt endlessly; sooner or later the creditors will summon a meeting in Versailles and, a national referendum notwithstanding, lay down the terms of unconditional surrender. Contrary to doing what the Romans do, when in Rome, do not imitate the Greeks even in Greece. (To be continued) The writer is a chartered accountant based in Islamabad. He can be reached at syed.bakhtiyarkazmi@gmail.com and on twitter @leaccountant