Fitch has now downgraded Pakistan to a CCC rating, denoting an extremely high risk for debt default-we now have $3.7bn worth of debt to pay by June. There was a time when people hoped we might be able to avoid a full-blown economic crisis but that moment has long passed. Our downward economic spiral has driven food and fuel prices to unaffordable levels, forcing families across the country to cut back costs as they scramble to put food on the table. As we look to address these challenges during this turbulent moment, it is important to question how we could’ve ever let this happen in the first place. We have amassed piles upon piles of debt in the short time since our independence-a dependence on imports and a low inflow of dollars has triggered a repeated balance of payments crises. From April 2023 to June 2026, Pakistan needs to pay back $77.5bn in external debt. For a $350bn economy, this is a hefty burden and certainly not something it can do alone. Troublingly, our official foreign reserves are hovering around $4bn, insufficient to finance even a month’s worth of imports. Right now, economic managers in the country only have two real options for addressing the country’s external debt burden. The first is to take fresh loans and seek rollovers of debt. However, due to downgrades by international credit rating agencies such as Fitch, this is no longer a viable possibility. Friendly lenders such as Saudi Arabia and China have done their part but without securing additional bilateral financing, we are unlikely to fulfil our fiscal responsibilities. So, will we ever come back from the abyss? That has not been determined yet but it relies heavily on our willingness to change the way we’ve been going about things. That means giving serious thought to debt restructuring. A preemptive restructuring of debt will reduce repayment pressure and spare scarce dollars in the economy to finance the current account deficit. But the process will be long and painful, seeking to remedy decades worth of mistakes. That means more austerity measures and an unhappy public. Are we prepared to deal with the fallout? *