Former finance minister Miftah Ismail has said that Pakistan remains caught in a persistent economic cycle due to deep-rooted structural and governance issues, stressing that eliminating terrorism is essential to creating an environment conducive to sustainable economic growth.
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He made the remarks while speaking at the Karachi Literature Festival during a session titled “Fixing the Fundamentals: Pakistan’s Economic Reform”, which brought together leading policymakers, economists, and business leaders to discuss the country’s economic challenges and the urgent need for long-term structural reforms.
The discussion focused on moving beyond short-term and reactive measures and adopting a consistent, long-term strategy to stabilise and grow the economy. The session was moderated by former minister for investment Muhammad Azfar Ahsan and featured speakers including Muhammad Ali, Dr Ishrat Husain, Miftah Ismail, Asad Umar, and Dr Zeelaf Munir. Participants agreed that Pakistan’s economic problems cannot be resolved through temporary or tactical fixes.
Adviser to the Prime Minister on Privatisation Muhammad Ali emphasised that reforms must begin at the structural level, particularly through documenting the economy to strengthen the tax system. He said sustainable growth is impossible without comprehensive tax reform and called for reducing the government’s footprint in commercial activities, arguing that state involvement in business contributes to high electricity and gas prices.
Ali also stressed the importance of boosting exports, increasing women’s participation in the workforce, and empowering local governments to improve governance and service delivery.
Economist and former State Bank of Pakistan governor Dr Ishrat Husain highlighted Pakistan’s external debt burden of $25 billion, noting that the country requires around $12 billion annually to meet debt obligations. He said Pakistan spends nearly $10 billion each year on food imports, a figure that could be significantly reduced by strengthening domestic agriculture through better credit access, modern farming techniques, targeted subsidies, and improved supply chains.
Dr Husain also called for reducing dependence on raw materials and imports by investing in industries such as steel, petrochemicals, pharmaceuticals, and lithium batteries, while placing greater emphasis on services and innovation-driven sectors.
Pakistan Business Council Chairperson Dr Zeelaf Munir said policy credibility and consistency are critical to attracting investment, noting that capital responds more to stability and predictable regulations than to short-term incentives. She pointed out that Pakistan has experienced low economic growth for nearly three decades due to structural misalignment and inconsistent policymaking.
Munir also highlighted serious human development challenges, including women’s workforce participation below 20% and nearly 25 million children being out of school. She said rebuilding trust requires transparency, accountability, institutional reform, a broader tax base, improved governance, and long-term industrial planning.
Miftah Ismail reiterated that Pakistan’s economic stagnation stems from governance failures and stressed the need for population control, universal education, reform of the NFC Award, reduced government spending, and stronger local governments. He argued that effective local governance would reduce demands for administrative fragmentation and called for the privatisation of state-owned electricity distribution companies and gas utilities to improve efficiency. He also criticised bureaucratic delays and excessive red tape, urging accountability and timely reforms to restore public trust.
Former finance minister Asad Umar emphasised the need to restructure Pakistan’s economy to align with global demand, saying the country cannot achieve sustained growth without increasing exports. He called for reducing the government’s heavy footprint, promoting fair competition, implementing tax reforms, and ensuring policy continuity, while underscoring the importance of democratic stability and regional trade.
Concluding the discussion, moderator Muhammad Azfar Ahsan described ad-hoc and reactive policymaking as one of Pakistan’s most persistent challenges. He said the country needs a coherent, rules-based, and data-driven long-term economic strategy built on institutional continuity rather than personality-driven decisions.
The session ended with a consensus that Pakistan’s economic revival depends on structural reform, policy consistency, export growth, human development, institutional accountability, and a clear long-term vision. Speakers agreed that while difficult decisions lie ahead, transparency, trust, and strong governance are essential to placing the country on a sustainable path to economic growth.
