Muhammad Faiq Shah

In the contemporary global economic system, many developing nations, including Pakistan, rely on external financial support to stabilize their economies. The International Monetary Fund (IMF) and other multilateral institutions have often been a lifeline for Pakistan, providing much-needed financial assistance to cope with fiscal deficits, inflation, and external debt crises. However, the reliance on external entities can result in stringent conditions that often lead to domestic policy challenges, increased debt, and economic vulnerability. This raises an important question: Can Pakistan achieve sustainable development and prosperity without the assistance of institutions like the IMF? The answer lies in reshaping economic policies, prioritizing internal resources, and pursuing innovative solutions.

One of Pakistan’s foremost economic challenges is its low tax-to-GDP ratio, which hinders revenue generation and forces the government to rely on external borrowing. As of 2023, Pakistan’s tax-to-GDP ratio was approximately 9.5%, one of the lowest in the region, compared to India’s 17% and Bangladesh’s 9.9%. This inadequate revenue generation pushes the country towards borrowing and external financial support. A significant portion of Pakistan’s economy operates in the informal sector, accounting for 35-40% of GDP, according to the World Bank. By formalizing this sector and improving tax compliance, Pakistan can tap into previously untaxed areas. Formalizing just 20% of this informal economy could increase government revenues by up to 2-3% of GDP. Implementing a progressive tax system that ensures the wealthiest 10% of the population, who control 60% of the nation’s wealth, contribute fairly, could generate an additional PKR 1 trillion annually. Additionally, digital tax collection has already led to a 17% increase in tax returns in 2022 compared to the previous year, showing the potential for further improvement through technological solutions.

Pakistan’s trade deficit remains one of its most pressing economic concerns. In the fiscal year 2023, the country’s exports stood at $31.8 billion, while imports were $58.7 billion, resulting in a trade deficit of $26.9 billion. To move towards sustainable development, Pakistan must focus on an export-led growth strategy. Diversifying its export base is critical, as textiles currently account for 60% of exports. Pakistan’s tech exports were only $2.6 billion in 2022, compared to Vietnam’s $96 billion in 2020, highlighting the need to prioritize tech-based goods. Improving agricultural productivity is another key factor. Currently, Pakistan’s wheat yield is 30-40% lower than countries like Egypt and the United States. Increasing productivity through modern agricultural practices and efficient water management could lead to significant savings. For example, Pakistan’s water scarcity crisis is expected to worsen by 2025, but adopting water-efficient practices such as drip irrigation could mitigate the problem and save the economy billions.

With a median age of 22.8 years, Pakistan has a young population that could be an economic asset. However, 58% of Pakistan’s youth is unskilled, limiting their potential to contribute to economic growth. Pakistan’s education expenditure is currently only 2.8% of GDP, compared to the global average of 4.5%. By increasing this to at least 4%, the country could drastically improve access to quality education, particularly in STEM fields, similar to how South Korea invested in education and saw its GDP grow from $2.7 billion in 1960 to $1.6 trillion in 2020. In addition, Pakistan spends only 1.2% of GDP on healthcare, while the World Health Organization recommends at least 6%. Increased spending on healthcare can lead to a healthier, more productive workforce, potentially increasing economic output by 2-3% annually.

Pakistan’s energy crisis is a major impediment to growth. The country spends $14 billion annually on energy imports, while energy shortages cost the economy an estimated 2-2.5% of GDP each year. Pakistan has vast untapped renewable energy potential, with 50,000 MW in wind energy and over 2.9 million MW in solar energy. However, the country utilizes less than 5% of its renewable energy potential. Scaling up renewable energy could not only reduce the import bill but also create approximately 300,000 green jobs. Additionally, reducing energy wastage by upgrading transmission infrastructure could save up to PKR 200 billion annually, according to the World Bank.

Corruption remains a significant challenge for Pakistan, costing the economy 5% of its GDP annually. Strengthening institutions like the National Accountability Bureau (NAB) and promoting digital governance could reduce corruption and improve economic efficiency. For example, e-governance in Estonia saves the country 2% of GDP annually. Pakistan could potentially save PKR 500 billion annually through the digitalization of public services. Strengthening public institutions to ensure transparency could add an additional $7-8 billion to Pakistan’s economy annually by reducing corruption by just 2%.

Lastly, Pakistan’s national savings rate is just 11-13% of GDP, compared to an average of 30-35% in emerging economies. Encouraging domestic savings and investments could reduce reliance on external loans. Expanding financial inclusion, where currently only 21% of the population has access to formal banking services, could mobilize up to PKR 1 trillion in untapped capital. Strengthening capital markets and improving corporate governance could also attract significant investment, reducing the need for external financial support.

In conclusion, achieving prosperity and development without the IMF or other external support is a challenging yet achievable goal for Pakistan. The statistics indicate that by focusing on domestic reforms, fostering export-led growth, investing in human capital, promoting energy independence, and reducing corruption, Pakistan can significantly enhance its economic performance. By adopting innovative solutions and utilizing its internal resources effectively, Pakistan can chart a path to self-reliant and sustainable economic development.

Muhammad Faiq Shah is a businessman, political figure, and dedicated philanthropist. He can be reached via Email: [email protected]

Dr. Muhammad Akram Zaheer

The geopolitical environment of Eastern Europe and the South Caucasus is undergoing significant transformation, with Romania and Armenia emerging as pivotal actors in their respective regions. Both countries are navigating complex security environments shaped by historical alliances, emerging threats and shifting global power dynamics. Romania, a key regional ally of the United States, is actively enhancing its defense capabilities and solidifying its strategic partnership with Washington. Meanwhile, Armenia, historically aligned with Russia, is attempting to reorient its foreign policy towards the West, a move fraught with challenges due to its longstanding dependencies on Russia and its regional isolation.

Romania’s strategic importance in Eastern Europe cannot be overstated. As a member of NATO and the European Union,Romania occupies a crucial position on the southeastern flank of the alliance, bordering the Black Sea, Ukraine and Moldova. In response to growing security concerns, particularly those arising from Russia’s assertive foreign policy and military activities in the region, Romania has significantly increased its defense spending. In recent years, the Romanian government has committed to raising its defense budget to 2.5% of its GDP, surpassing the NATO guideline of 2%. This increase in defense spending reflects Romania’s commitment to bolstering its military capabilities and enhancing its role within NATO.One of the key aspects of Romania’s defense strategy is its focus on acquiring advanced military equipment from the United States. This acquisition process is part of a broader effort to modernize the Romanian Armed Forces and ensure interoperability with NATO allies. Romania has made substantial investments in procuring state-of-the-art military hardware, including Patriot missile defense systems, HIMARS rocket artillery systems and F-16 fighter jets. These acquisitions not only enhance Romania’s defensive capabilities but also reinforce its strategic partnership with the United States, further embedding the country within the Western security architecture.

Romania’s defense strategy is not solely focused on external acquisitions; it also aims to revitalize the domestic military industry. The Romanian government has prioritized the development of its defense sector to reduce dependency on foreign suppliers and to create a sustainable, self-sufficient defense industry. This initiative includes fostering partnerships between domestic defense companies and international firms, promoting research and development in military technology and investing in the production of indigenous defense systems. By strengthening its domestic military industry, Romania seeks to enhance its strategic autonomy while contributing to the broader defense capabilities of the NATO alliance.In addition to bolstering its defense capabilities, Romania is actively expanding its security cooperation with neighboring countries, particularly Ukraine, Moldova and Bulgaria. The security environment in the Black Sea region has become increasingly volatile due to the ongoing conflict in Ukraine and Russia’s military presence in the region. Recognizing the need for a coordinated regional response, Romania has sought to deepen its security ties with Ukraine, which is on the frontlines of the conflict with Russia. This cooperation includes joint military exercises, intelligence sharing and collaboration on cybersecurity and border security. By working closely with Ukraine, Romania aims to enhance regional stability and counter the security threats posed by Russia.

Romania’s security cooperation extends beyond Ukraine to include Moldova and Bulgaria. Moldova, which shares a long border with Romania, is a key focus of Romanian foreign policy. The two countries have deep historical and cultural ties and Romania has been a strong advocate for Moldova’s European integration. In the security domain, Romania has provided assistance to Moldova in areas such as military training, defense reform and border security. Romania’s support for Moldova is part of a broader strategy to promote stability and security in the region, particularly in the face of potential Russian influence in Moldova.Similarly, Romania’s security cooperation with Bulgaria is driven by the shared goal of enhancing regional security in the Black Sea area. Romania and Bulgaria, both NATO members, have participated in joint military exercises and have collaborated on initiatives aimed at strengthening the alliance’s eastern flank. This cooperation is critical in the context of the broader geopolitical challenges facing the Black Sea region, where both countries are working to counterbalance Russian military activities and ensure the security of NATO’s southeastern border.

While Romania is deepening its ties with the West, Armenia is embarking on a challenging journey of foreign policy reorientation. Historically, Armenia has been closely aligned with Russia, both as a member of the Collective Security Treaty Organization (CSTO) and through its reliance on Russian military and economic support. However, recent developments have prompted Yerevan to reconsider its strategic alliances and seek closer ties with the West.Armenia’s reorientation towards the West is driven by several factors. First, the Nagorno-Karabakh conflict, particularly the 2020 war with Azerbaijan, exposed the limitations of Armenia’s reliance on Russia. Despite being a treaty ally, Russia’s response during the conflict was perceived by many in Armenia as inadequate, leading to a loss of confidence in Russia as a reliable security guarantor. This has fueled a growing desire in Armenia to diversify its foreign policy and reduce its dependence on Russia.Second, Armenia’s domestic political scene has shifted in recent years, particularly after the 2018 Velvet Revolution, which brought a new government to power with a reformist agenda. The current Armenian leadership has shown a greater willingness to engage with Western institutions and to pursue closer ties with the European Union and the United States. This includes efforts to strengthen democratic governance, enhance the rule of law and improve human rights, all of which are key areas of cooperation with Western partners.However, Armenia’s foreign policy reorientation is not without significant challenges. The country’s deep-seated dependencies on Russia, particularly in the security and energy sectors, pose substantial obstacles to a full-fledged pivot to the West. Armenia’s membership in the CSTO and its reliance on Russian military bases and arms supplies complicate its efforts to realign its security policy. Moreover, Russia remains a dominant player in the South Caucasus and any shift in Armenia’s foreign policy could provoke a strong reaction from Moscow, potentially jeopardizing Armenia’s security and economic stability.

Another major challenge for Armenia is its regional isolation. For decades, Armenia has been in a state of conflict with Azerbaijan and Turkey, leading to the closure of its borders with both countries. This has limited Armenia’s access to regional markets and trade routes, exacerbating its economic vulnerabilities. To successfully reorient its foreign policy, Armenia must find ways to overcome its regional isolation, which may require difficult compromises, particularly in its relations with Azerbaijan and Turkey.Despite these challenges, Armenia is gradually building new partnerships with Western countries. The European Union has become an increasingly important partner for Armenia, providing financial assistance, technical support and diplomatic backing for Armenia’s reform agenda. The Comprehensive and Enhanced Partnership Agreement (CEPA) between the EU and Armenia, signed in 2017, is a key framework for deepening political and economic ties. Similarly, Armenia has sought to enhance its relationship with the United States, particularly in areas such as defense cooperation, democratic governance and economic development.

 Romania and Armenia represent two distinct but significant cases of regional actors navigating complex security and foreign policy environments. Romania, as a staunch ally of the United States, is focused on strengthening its defense capabilities, expanding its strategic partnership with Washington and enhancing regional security through cooperation with its neighbors. In contrast, Armenia is attempting a delicate foreign policy reorientation towards the West, a move that requires overcoming deep-seated dependencies on Russia and addressing longstanding regional challenges. Both countries’ efforts to adapt to the evolving geopolitical environment underscore the broader shifts occurring in Eastern Europe and the South Caucasus, with implications for regional and global security.

Qamar Bashir

Before aligning with the establishment, Mr. Vawda made numerous predictions, but the majority of them never materialized, damaging the reputation of PTI’s government and eroding its political capital. I vividly recall one of his most outlandish and illogical predictions, made shortly after PTI assumed power in 2018. He confidently predicted that within a month or two, 20 million unemployed Pakistanis would secure high-profile jobs and that the country would become wealthier than ever before. However, this baseless prediction never came to fruition during PTI’s tenure, and the promise remained unfulfilled until the party was ousted from power.

Vawda consistently promised that the PTI government would reduce Pakistan’s debt through improved governance, minimizing corruption, and boosting exports. He asserted that foreign investments, particularly from Saudi Arabia, China, and the UAE, would play a significant role in stabilizing the economy.  but his prediction proved totally false.

He highlighted that the PTI government would prioritize the development of infrastructure through the China-Pakistan Economic Corridor (CPEC), which would lead to increased trade, industrialization, and economic activity across Pakistan. In fact as the normal perception goes, CPEC was factually slowed down during PTI tenure in power.

Vawda promised that the PTI government would implement comprehensive tax reforms, focusing on expanding the tax net and reducing tax evasion. This would result in increased government revenue and a stronger fiscal position but there was no significant improvement in the revenue collections.

While predicting the future of Nawaz Sharif, Vawda claimed that Sharif’s return to Pakistan would bring significant legal challenges and that his political career would be in jeopardy. Contrary to this prediction, upon Nawaz Sharif’s return, he was received with immense fanfare. He was welcomed as a statesman and was greeted with grand receptions, including being escorted from London to a large public gathering at Minar-e-Pakistan in Lahore, where he was treated like a political icon rather than someone facing a bleak future.

Vawda repeatedly predicted the decline of both PML-N and PPP. He claimed that PML-N would eventually be restricted to Punjab, much like the MQM is limited to Karachi. Similarly, he forecasted that PPP would lose its national influence and be confined to Sindh. Exactly opposite happened.  Against all odds both the parties have shared the power resources of the country and successfully ousted all other parties and established their governments in all three provinces except KP. 

As soon as he changed allegiance and left PTI to become the civilian mouthpiece of the establishment, Vawda’s predictions suddenly gained remarkable accuracy. It was as though he experienced a “spiritual awakening” after aligning himself with new powers. His loyalty to his spiritual and political benefactors was handsomely rewarded. Despite not being part of any major political party, lacking a popular mandate, and even being somewhat unpopular among the public, Vawda was granted a Senate seat. His newfound connections catapulted him to media prominence, allowing him to appear on television channels of his choosing, with his preferred anchors, making predictions that consistently proved accurate. This transformation was seen as a direct result of his loyalty to his new political allies and benefactors.

Vawda had predicted that future governments in Pakistan would be coalition-based due to the lack of a clear majority by any single party. This prediction came true, as recent governments, including are operating as coalitions.

Vawda predicted that PTI might face serious hurdles in contesting future elections, hinting at a possibility of disqualification of Imran Khan. He predicted almost six months ago that  PTI will be deprived of the “Bat” as its electoral symbol and predicted that PTI as a political party will not be allowed to contest elections. His significant predictions which sembled impossible when he made ultimately  proved absolutely accurate.

His prediction that PTI would face increased challenges after the May 9 riots, especially due to the party’s conflict with the military and the establishment and will suffer from political isolation and legal repercussions, including mass arrests and prosecutions of party members proved so true.

Faisal Vawda predicted that Imran Khan would face continuous incarceration despite being granted bail in multiple cases, as the establishment was not willing to forgive him anytime soon. He dismissed rumors of a reconciliation between PTI and the establishment, emphasizing that the rift, especially after the May 9 events, had only deepened. Vawda believed that Khan’s legal troubles would persist due to the establishment’s determination to keep him under pressure, preventing any swift return to political normalcy for the PTI leader.

Among all of Vawda’s controversial predictions, the most critical and dangerous one was regarding the Supreme Court’s majority decision to restore PTI as a political party in the National Assembly. He predicted that, despite the court’s ruling, which also allowed independents who were elected with PTI’s support to formally join the party, the decision would face significant implementation challenges. Vawda warned that external pressures, particularly from influential institutions and political actors, would create obstacles that could delay or prevent the full execution of the Supreme Court’s decision, effectively undermining PTI’s position in the National and provincial assemblies.

The government’s response to the delay in implementing the Supreme Court’s decision regarding PTI’s reserved seats has been multifaceted. Initially, it raised concerns over the ruling, focusing on dissenting opinions from two judges, which questioned the legitimacy of the decision and highlighted potential constitutional conflicts, such as the justification of floor-crossing.

A review petitions were filed by parties like PML-N and PPP, raising concerns about the procedural fairness of the decision. Meanwhile, the Election Commission of Pakistan (ECP) also sought clarification from the court, further delaying the decision’s implementation.

 The objection inter alia included PTI’s organizational structure, particularly whether the party had conducted intra-party elections in compliance with legal requirements, which affected its ability to issue proper affiliation certificates to candidates. Second, the ECP sought clarification on whether independent candidates who had not initially contested under PTI’s banner could be recognized as PTI members for reserved seats, arguing that such affiliations should have been formalized at the time of elections. Lastly, the ECP pointed out procedural challenges in implementing the Supreme Court’s ruling, suggesting that the decision lacked clear guidance on how to certify party affiliations and comply with electoral law, further complicating the implementation process. The parliament, which is a party to the conflict,  passed an amendment to the Election Act 2023, aimed at limiting the Supreme Court’s power to implement its decisions.

When the Supreme Court reviews the Election Act 2023 amendment and related petitions, it will likely focus on maintaining judicial independence, potentially striking down the amendment if it is deemed to undermine the court’s authority to enforce its decisions. The court may also revisit the balance of power between the judiciary and legislature, addressing concerns of legislative overreach while interpreting the constitutional framework. Additionally, the court could provide clarifications on procedural aspects, such as PTI’s organizational structure and the legitimacy of independent candidates joining the party. Given the political and institutional pressures involved, the court may issue a nuanced ruling that balances legal and political considerations, potentially navigating a middle ground to resolve the conflict.

Qamar Bashir

Former Press Secretary to the President

Former Press Minister to the Embassy of Pakistan to France

Former MD, SRBC, CEO, ATV