LAHORE: Politicians should take a cue from successful economies, where all political parties support a common economic agenda while differing on ideology and political matters. This demonstrates that politicians can distinguish between the state and the ruling elite.
Pakistan’s major challenge lies in its unstable economy, largely due to the absence of an agreed-upon economic agenda among political parties. Political stakeholders must prioritise economic consensus during the rare opportunity of talks beginning today between the opposition and government.
Political parties need to come together to develop a unified economic strategy. All issues related to the economy must be discussed, and non-transparent practices eliminated. Measures should address malpractices such as under- or over-invoicing, misdeclaration of goods, and inaccuracies in sales tax returns. Once agreed upon, these measures must be supported wholeheartedly by leaders across the political divide. Pakistan requires the full commitment of all politicians to improve the economy, as other regional economies have advanced significantly due to consensus on economic policies.
In South Asia, countries with relatively stable economic policies, despite changes in government, are led by India. One reason for this stability is India’s robust institutional framework and independent central bank (RBI), which ensures continuity in macroeconomic policies. Since the 1990s, there has been broad consensus among major political parties on core economic policies such as liberalisation, privatisation, and globalisation. Long-term initiatives like infrastructure development and taxation reforms (eg, GST) remain largely unaffected by political transitions. However, policies such as farm subsidies and labour reforms can still be influenced by political populism.
In contrast, Pakistan has weak institutions. Key appointments often lack merit and are engineered by the ruling party. There is no consensus among political parties on fundamental economic policies. Infrastructure development, privatisation efforts, and reforms in agriculture and labour remain heavily influenced by political populism.
Bangladesh has maintained a consistent focus on export-led growth, particularly in the ready-made garment (RMG) sector, across different governments. Long-term goals such as Vision 2041 and efforts to achieve middle-income status align with national interests, regardless of the ruling party. Strategic reliance on international financing and foreign direct investment also ensures policy continuity. However, political rivalries sometimes hinder the pace of implementation.
In contrast, Pakistan lacks a stable export policy. Even when five-year textile policies are announced -- despite textiles being the country’s main export -- they are often not implemented or are modified during their tenure. The country continues to borrow internationally for consumption without a strategic approach to leveraging international financing or attracting foreign direct investment.
Even tiny Bhutan demonstrates economic sustainability through its Gross National Happiness (GNH) framework, ensuring policies prioritise long-term goals over short-term political gains. Political parties in Bhutan operate within a small policy spectrum due to constitutional limits and a shared developmental focus.
Other South Asian countries like Nepal, Sri Lanka and Pakistan frequently experience economic policy shifts due to political instability, frequent government changes, and a lack of consensus on long-term economic frameworks. This undermines investor confidence and disrupts reform implementation. Globally, many developing economies thrive due to stable economic policies. Vietnam has adhered to export-led growth and economic liberalisation under the ‘Doi Moi’ reforms since the 1980s. Indonesia, in Southeast Asia, has focused on macroeconomic stability, trade liberalization, and infrastructure development since the post-Suharto era (1998). In Latin America, Mexico has prospered through policies encouraging foreign investment, trade agreements like NAFTA (now USMCA), and fiscal discipline.
Rwanda, in Africa, has successfully implemented Vision 2050, stressing the need for economic diversification, technology adoption and infrastructure development. Pro-business reforms attract foreign direct investment and strengthen governance. Other examples include Chile in Latin America, Botswana in Africa, and Malaysia in Southeast Asia. Pakistan must learn from these success stories to chart a path towards economic stability and growth.