LAHORE: Pakistan faces significant challenges in industrial and agricultural productivity, struggling to keep pace with global standards. Key sectors, such as textiles, rely heavily on outdated technologies, lack diversification, and suffer from inefficiencies. Limited value addition further undermines competitiveness in international markets.
Investment in Pakistan remains low, with gross fixed capital formation as a percentage of GDP trailing behind other developing nations. Political instability, inconsistent policies, and security concerns exacerbate economic uncertainty. While regulations exist, enforcement is often uneven and marred by corruption and inefficiency. Overregulation in some areas and under-regulation in others create market distortions, discouraging both domestic and foreign investment.
To enhance productivity, the country must establish robust regulatory frameworks that promote fairness and stability while minimising bureaucratic inefficiencies. Long-term investment policies are essential to attract both local and foreign investors. Capacity-building initiatives in industries such as textiles, sports goods and pharmaceuticals can help Pakistan carve a niche in global markets. Mechanising the agricultural sector is imperative to modernise production processes and increase yields.
While globalisation presents challenges, it remains an unavoidable reality. Pakistan’s participation in global trade is limited due to heavy government intervention and weak institutional frameworks. Regulatory bodies such as the Securities and Exchange Commission of Pakistan (SECP) and the Competition Commission of Pakistan (CCP) often lack autonomy and enforcement power, leading to inefficiencies and monopolistic practices.
The country’s engagement with globalisation has been uneven. While benefitting from textile exports and remittances, Pakistan has struggled to develop globally competitive industries. Smuggling, under-invoicing and informal trade along porous borders undermine the government’s jurisdiction and tax collection. Trade agreements also pose challenges. Pakistan’s reliance on GSP+ status and preferential agreements exposes vulnerabilities in its economy. Weak domestic industries often struggle to compete in liberalised markets.
To address these issues, the country must strengthen trade policies to curb smuggling and illicit trade. Developing export-oriented industries beyond textiles, such as engineering goods, IT and food processing, is crucial for fully leveraging globalisation. Empowering regulatory bodies and minimising political interference will also enhance market governance.
Economic policies here often prioritise short-term stabilisation over long-term structural reforms. Reliance on traditional approaches, such as IMF prescriptions, hinders innovative solutions tailored to our unique challenges. Economic research is underfunded, with limited contributions from think tanks and universities. Donor-driven agendas often skew research priorities, stifling indigenous problem-solving.
Academic and policy discussions rarely explore alternative economic models or interdisciplinary approaches, limiting solutions to systemic issues like inequality, informality and environmental degradation.
To address these gaps, Pakistan must promote academic freedom and allocate funding for diverse economic research. Universities and research institutions should be reformed to encourage intellectual pluralism and innovation. Collaboration platforms between academics, policymakers, and the private sector are essential to align economic thought with practical realities.
Pakistan’s challenges in production, governance, globalisation and economic thought are significant but surmountable. With prudent, fair and forward-looking policies, the country can achieve sustainable growth, competitive markets, and greater resilience in an increasingly globalised economy.