Nadeem-Ul-Haque
Pakistan’s economic policy remains stuck in the old Mahbub ul Haq-era framework: chasing big projects funded by aid and loans. We rarely innovate or rethink our approach—we simply repeat the past. This mindset lies at the root of our recurring balance-of-payments (BoP) crises.
Every government rushes into high-visibility vanity projects (metros, highways, brick-and-mortar infrastructure) following the same outdated model. These initiatives are often poorly analysed, inadequately planned, and badly executed, leading to mounting debt and long-term inefficiencies.
The Ministry of Finance (MoF) suffers from weak budget planning and implementation. Decisions frequently bow to vested interests and political pressure, while “fiscal control” is imposed through ad hoc austerity measures across departments. Globally, such blunt austerity is widely viewed as counterproductive.
Serious economic planning has been absent for nearly 50 years, ever since the Ministry of Finance absorbed the Planning Commission (PC). The MoF prefers this control so it can slash the Public Sector Development Programme (PSDP) at will and prioritise politically favoured projects without any strategic constraints or growth framework.
As a result, growth has been pushed to the sidelines as a policy goal. It barely features in our national discourse. There is little research, analysis, or serious thinking devoted to it.
The Planning Commission lacks the expertise and mandate to develop credible plans or growth strategies. The MoF rarely consults it on major projects or broader development policy. Growth has become a forgotten objective.
We have settled into a status-quo mindset. Instead of focusing on growth, development, opportunity, and productivity, the emphasis is overwhelmingly on social protection and charity. We treat symptoms rather than building the foundations for prosperity.
A common excuse is that “there is no policy space” because the IMF dictates everything. This is not entirely accurate.
IMF programmes are negotiated outcomes. Governments should develop their own coherent vision for stabilisation and development, backed by solid research, and then negotiate from a position of strength. The IMF is often open to well-thought-out alternatives.
Because we don’t fully own our policy framework or invest in homegrown thinking, implementation suffers. This explains why we repeatedly fall into crises and return to the IMF.
There is no substitute for building strong domestic policy-making capacity. Economic policy is a complex process that requires teamwork across institutions—not just fiscal tweaks concentrated in one ministry.
Final thought:
It’s striking how passionately Pakistanis debate and follow cricket and the national team, yet show far less interest in our economic “team,” its strategy, or how policy is actually made. Until we change that, progress will remain elusive.
The Writer is the former deputy chairman of the Planning Commission.
