Since 90s Pakistan witnessed flood of Plans, Visions, Development Frameworks and Reform agendas by multilaterals, planning ministry, think tanks and economic intellectuals.
Uraan Pakistan is the latest addition as the 13th Plan for 2025-2029. In technical terms, all plans and reform agendas are meant to be a blueprint for development under ‘constrained optimization’.
Unfortunately, the absence of an explicit recognition of constraints and optimizing the targets within them has led to half-hearted attempts and in most cases are the reasons for their failure and/or under-performance of the above exercises.
Devoid of ‘constrained optimization’ specifically ‘time’ constraint, they can be likened to fairy tale planning and/or a ‘pie in the sky’ exercise.
Planning 101 lists the following conventional constraints whose explicit recognition are usually the bases for ‘effective’ planning: (a) Time, Resources, Geographical, Regulatory and Financial. In case of Pakistan let us add a few more ‘imbedded societal/communal structural’ constraints that are likely to persist for the next few decades and defy consensus in the medium term; (b) Demographic (explosive population growth and rapid urbanization), cultural (e.g., low female labour participation rate in formal manufacturing sectors), outflow of manpower, divisiveness in society at various levels, (religion, linguistic, regional, tribal, political/economic ideology), colonial mindset and elitism.
In the past decade; (c) climate change and geopolitical landscape are the new entrants to the above list of constraints, which are difficult if not impossible to be resolved in the medium term. While some may give higher weightage to the explicit political/economic divisiveness, e.g., public vs private sector led development, import substitution vs export led growth, social vs economic indicators, democracy vs autocracy and opting for fast rapid short-term vs steady long-term sustainable growth for their role in past failures, but the ‘imbedded’ constraints in group (b) are equal if not higher contributors to poor effectiveness of the planning exercises.
The top-down development strategy of 5Es can be fine-tuned to follow a Triple S-Approach, i.e., strategic priorities, strategic intervention and strategic allocation.
While this approach can be adopted as a quest for higher growth, it is equally applicable in a concomitant strategizing of limited public investment programme, due to the IMF oversight and servicing of debt. If in the interim period ‘Manna from Heaven’ accrues, the residual funds can be prioritized taking into account the current and expected social and economic returns to the society.
Here again there may be a disagreement on the weights for current vs expected returns? The short horizon of elected officials at the 3 tiers of government is likely to favour a higher weight-age to current returns.
First, it is encouraging to note that the 5Es follow the above triple S-approach at least in its first pillar, i.e., implicit ranking of the priorities, with the first one, i.e., exports as the “Strategic Priority” and other 4Es priorities are ranked relative to the first. Hopefully, the other two pillars of Triple S-approach i.e., strategic intervention and strategic allocation are in progress for exports.
The priority ranking of the last 3Es, i.e., Environment (3), Energy and Infrastructure (4) and Equity (5) requires a brief discussion. The ranking is an explicit acknowledgement of time, financial, skills and regulatory constraints, and it is doubtful whether any of these priorities will achieve the targets in a short period of 5 years. They are domestic, foreign exchange, skill, and innovation intensive.
Luckily, they have been leased to the multilaterals (WB 10-year programme, IMF RSF financing) and bi-laterals, so that the needed interventions and allocations are implicitly assigned to them with Planning Commission and other relevant ministries playing a passive/oversight role in facilitating regulatory and legal reforms, without any accountability.
Moreover, the blessing in disguise is that the Planning Commission has been relieved from spreading itself too thin over the 5Es, the main reason for overall poor performance of the past visions and plans.
The Equity and Empowerment (5) includes health and education as provincial subjects further complements the above residual role of the Planning Commission in carrying the 5Es forward.
Energy and Infrastructure (4) priority constitutes projects on affordable renewable energy, conservation and efficient use and implementation of climate resilient infrastructure and environment friendly technologies mostly dependent on foreign inflows/skills in the begging bowl. By not referring to the ongoing energy crises, the Planning Commission has cleverly washed its hands from its past sins in approving the past energy projects. Let’s hope it does a better job in renewable energy and climate resilience projects.
The remaining priority in the non-strategic group of 4Es is E-Pakistan (2). It is a re-hashed and expanded version of e-governance Projects launched by NADRA in 2020. In the last five years, notwithstanding its government ownership, NADRA with its dynamic and technical/innovative leadership was fairly successful in realizing the second part of its vision: “Digitizing the Government itself but also making it easier for citizens to interact with Government services”.
The E-Pakistan is a pretty ambitious and unattainable priority in the next 5 years, given the regulatory bottlenecks, colonial mentality, low skill level and the in-built bureaucratic resistance to frequent automated performance evaluation of the bureaucracy as in DOGE. At best, the GOP can do is to incentivize the adoption and speed up the digital transformation of the private sector.
Let’s move on to exports (1), the only ‘strategic priority’ in the group of 5Es. For a strategic priority, the magic target of USD 60 billion in absence of details of working of the black box is an exercise in “unconstrained” optimization and therefore a ‘pie in the sky’. It requires annually a growth rate of more than 15 percent per annum in merchandise exports. Last 9 months of FY24-25, the base year of Uraan, show a growth of only 7.7 percent in merchandise exports at USD 24.7 billion.
In Strategic Trade Policy Framework (STPF) 2020-2025 document, MOC set a target of USD 57 billion for the current FY. A more realistic in-house target of USD 28.57 billion for FY 24-25 set by TDAP (under scenario 1) will luckily be exceeded by a small margin.
The main issue with this unattainable target is: a) correspondingly, imports will also increase. A back of the envelope exercise based on the last 20 years of data, indicated i) a simple correlation of 0.8 between imports and exports and ii) that for every one percent increase in exports, our imports tend to increase by 1.18 percent. In other words, to attain USD 60 billion exports, the imports will have to increase to USD 142 billion.
The current A/C surplus of USD 1.5 billion, if we optimistically assume that remittances will be USD 45 billion and net other IT receipts will be USD 10 billion, will convert into a C/A deficit in the range of USD 25-30 billion by 2030, in addition to payments on foreign liabilities. This deficit clearly dents the long-cherished goal of macroeconomic stabilization on a sustainable basis.
The above constraints call for replacing the export target with a more inclusive and sustainable macro-stabilization indicator, i.e., net foreign exchange reserves. Not the all-time high of “superficial” figure of USD 27 billion reserves attained in 2021 by borrowing and begging.
Setting an Uraan target of sustainable reserves of USD 35-40 billion by 2030 puts a tight lid on imports and expenditure in real time by resisting temptation to squander rising export earnings on grandiose non-productive schemes e.g., bullet train, highways and expanding freebies and ‘relief’ economy to prepare for the next election.
Copyright Business Recorder, 2025
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