This is the fourth in a five-part series on Pakistan’s broken public financial reporting system. The earlier articles asked why parliament approves budgets without audited actuals, who owns the numbers, and why the cabinet and the finance minister do not formally own the year-end accounts. This article asks what the state owns and what it owes.
Ask a simple but fundamental question: what is the financial position of the state of Pakistan? We know tax collections, expenditure, fiscal deficits and borrowing. We also know formally contracted public debt: the Pakistan Economic Survey 2025-26 puts total public debt at about Rs83.3 trillion at end-March 2026.
But debt is only one side of a balance sheet. What land and buildings does the state control? What is the value of roads, dams, railways and other infrastructure? What are its investments in state-owned enterprises? What obligations sit outside formal debt – unpaid bills, pensions, guarantees, litigation and other commitments?
No one in Pakistan can answer these questions from one authoritative, audited set of statements. That is the deeper weakness of cash-based reporting. A cash account tells us what came in and went out. It does not show accumulated arrears, asset deterioration, deferred maintenance, growing pension obligations or risks shifted to state-owned enterprises. A government can improve this year’s cash deficit while making its underlying financial position worse.
That is why a statement of financial position matters. It turns fiscal reporting from a yearly cash diary into an account of accumulated stewardship.
There is also a large gap on the liability side. Formal public debt is measured; other obligations are far less visible. In early 2025, a senior official was reported as estimating combined federal and provincial pension liabilities at Rs40-45 trillion – not an audited figure, since no consolidated actuarial valuation is public. An obligation potentially equivalent to more than half of public debt can therefore enter debate as an estimate rather than a regularly measured disclosure.
Every government should periodically value pension obligations actuarially, with assumptions and sensitivities disclosed. Arrears, guarantees and other fiscal risks should likewise be reported.
There is complete darkness on the asset side. Federal and provincial governments own vast land, buildings and infrastructure, equity in commercial enterprises, loans and other financial assets. Provinces also hold rights over significant natural resources. Yet none is brought together in an audited statement showing what the State owns and what those assets are worth.
The mineral endowment illustrates the scale. Reko Diq is one of the world’s largest undeveloped copper-gold deposits. Barrick’s 2024 reserve disclosures attribute about 13 million ounces of gold and 7.3 million tonnes of copper in probable reserves to its 50 per cent interest – roughly double on a 100 per cent basis. Using Barrick’s reserve-price assumptions of $1,400 per ounce of gold and $3 per pound of copper, the gross contained-metal value exceeds $130 billion.
That is not its economic or accounting value. Mining costs, capital expenditure, taxes, royalties, financing, time and risk reduce it substantially. But it shows the scale of just one resource.
Thar tells a different story because commercial extraction has been underway for several years. The Thar Coal and Energy Board reports about 175 billion tonnes of lignite resources. SECMC says Block II has generated approximately $1.6 billion in foreign-exchange savings since inception, while its Phase III expansion was projected to save a further $420 million annually.
For a producing resource, economic value is better assessed through the present value of future benefits from commercially recoverable reserves – royalties, taxes, dividends, lease income and other cash flows attributable to the state – while separately recognising wider national benefits such as avoided energy imports.
No independently audited valuation exists, so precision would be artificial. But an order-of-magnitude estimate is possible. If wider utilisation of Thar across power, cement, fertiliser and industry eventually generated sustainable economic benefits of around $2 billion annually, the present value over 25 years would be roughly $18-21 billion at discount rates of 8-10 per cent. A conservative economic value of around $20 billion is therefore plausible.
This is not an accounting value. A proper valuation must estimate attributable future cash flows from economically recoverable reserves and separately identify wider economic benefits. The point is not to inflate national wealth by multiplying geological resources by commodity prices; it is that a country with assets of this scale should know, classify and report what it has.
McKinsey Global Institute’s 2026 Global Balance Sheet estimates that the global balance sheet reached almost $1.8 quadrillion in assets in 2025, including around $620 trillion of real assets such as property, infrastructure, machinery and intellectual property. GDP measures annual production; a balance sheet shows accumulated assets and liabilities.
Pakistan’s fiscal conversation is almost entirely about cash flows and debt. It sees the liability side clearly while leaving the accumulated asset base in the dark. If Pakistan’s public assets were properly identified, valued and reflected or disclosed in the financial statements, I believe the state would likely show positive net worth, with substantial long-term upside.
That does not mean those assets can simply be sold to repay debt; nor is all public debt immediately payable. Roads, schools and dams provide public services and generate economic rather than cash returns. Mineral wealth may take decades to monetise, while some SOEs may have negative value. A credible balance sheet would present the full picture, preventing both excessive pessimism and exaggerated claims of hidden wealth.
There is also an important constitutional distinction: provinces are not subsidiaries of the federal government and cannot simply be consolidated into federal statements as though Pakistan were a corporate group. Each government should first prepare its own statement of financial position. Pakistan should then publish a national general-government and public-sector balance sheet under an internationally recognised statistical framework, eliminating balances between government units.
Pakistan should proceed pragmatically. Start with an asset-and-liability census: registers of land, infrastructure, investments, debt, arrears and guarantees, with pensions actuarially valued and SOE exposures reconciled to audited accounts. Then move expeditiously toward accrual accounting – financial assets and debt first, pensions and guarantees next, land and infrastructure as valuation methods mature – with natural resources transparently disclosed, not forced into the balance sheet at speculative gross values. Finally, publish audited statements for each government, approved by its executive, alongside a national public-sector balance sheet reconciled with fiscal, debt and SOE reporting.
Pakistan’s fiscal debate is dominated by what it owes because that is what it measures. The answer is not to minimise the debt but to measure the other side with equal seriousness.
A balance sheet will not solve Pakistan’s fiscal problems. But until the state of Pakistan can show, with audited confidence, what it owns and what it owes, every judgment about its financial position, fiscal sustainability and stewardship will be made with visibility of one side only.
The fifth and final article turns to the way forward: whether the CGA, accountants-general and auditor-general have the capacity to prepare and credibly assure such statements, whether the cabinet and the finance ministers will sign and answer for the numbers, and whether parliament’s Public Accounts Committee has the power and capability to enforce these reforms.
The writer is a former managing partner of a leading professional services firm and has done extensive work on governance in the public and private sectors. He tweets/posts @Asad_Ashah
