The conventional wisdom is that “persistent fiscal and balance of payments deficits are a fundamental source of Pakistan’s high debt burden” [Pakistan (2001), p. xv)].1 The State Bank of Pakistan (2001, p. 117) goes further: “This…public debt is the result of structural weaknesses in the domestic economy and the external account. Excessive government expenditures, stagnant tax revenues, high returns on government securities and inappropriate sequencing of financial reforms, led to a bludgeoning (sic.) domestic debt profile. On the external front, large current account deficits, stagnant export revenues and declining worker (sic.) remittances, effectively forced Pakistan into an unsustainable situation”. All this is true, but hardly exhaustive.