In Pakistan, return on investment has quietly become a closing statement rather than a starting question. Once a project, policy, or transaction shows a positive ROI on paper, celebration follows, press releases are drafted, and responsibility dissolves. What happens next is rarely examined. Yet it is precisely after ROI is declared that the real economic story begins. Pricing distortions surface, fiscal pressures accumulate, consumers absorb the burden, and structural weaknesses deepen, often invisibly.

The obsession with ROI is understandable in an economy facing chronic capital scarcity, weak savings, and high borrowing costs. Investors demand reassurance, governments seek validation, and institutions rely on quantifiable metrics to justify decisions in a volatile environment. However, ROI in isolation is an incomplete and frequently misleading measure. It captures neither sustainability nor distributional impact, nor macroeconomic stress nor long-term national cost. In Pakistan, this narrow focus has enabled many policies and projects to be branded as successes while quietly transferring risk to households, taxpayers, and future governments.

In most cases, ROI is calculated in nominal terms. Inflation, currency depreciation, financing costs, execution delays, and regulatory changes are underestimated or excluded altogether. A project delivering an 18 or 20 per cent nominal return may appear viable, yet when double-digit inflation, rising interest rates, and rupee volatility are incorporated, the real return shrinks dramatically. Still, the ROI headline survives because it satisfies accounting conventions even when it contradicts economic reality. This practice has distorted investment decisions across sectors where lifecycle costs dwarf initial capital outlays.

What makes ROI’s aftermath particularly damaging in Pakistan is its predictable structure. Returns are front-loaded, risks are deferred, and accountability expires early. The energy sector offers the clearest example. Power projects are structured around guaranteed returns, indexation mechanisms, and assured recoveries. Once investors secure their ROI, downstream consequences emerge........

© Daily Times