EDITORIAL: The general vibe coming from government circles about the economy is that “all is well.” The official narrative is that the government has achieved hard-earned stability and that it is now the private sector’s turn to step up — pay taxes honestly, bring in investment, and drive growth. The message is clear: without the private sector playing its part, the shift from stability to growth will be difficult.
Government officials point out that ratings are improving and surveys are painting a more positive picture. Yet this optimism is not translating into investment. Both domestic and foreign investments continue to fall, even from an incredibly low base. When questioned about the exit of multinational companies (MNCs), the standard government response is that these firms are leaving because of global strategies, and Pakistan simply does not fit into their future plans.
That this is a defeatist argument is a fact. The real question should be: What is Pakistan failing to do that makes it incompatible with their global strategy? We need to introspect and understand why MNCs are leaving, why the super-rich are increasingly becoming non-resident Pakistanis, and why almost all major business families remain unwilling to invest in new manufacturing ventures.
These are uncomfortable questions, but authorities cannot run from them. The sentiment coming from Islamabad — especially in conversations with the private sector — suggests a push to shift responsibility onto businesses: expand the tax base through better compliance, bring in foreign investment through joint ventures and local demonstration projects, and buy struggling SOEs to make privatisation look successful, regardless of flaws in the regulatory or transaction frameworks.
At the recent Pakistan Business Council (PBC) “Dialogue on Economy” in Islamabad, nearly all public-sector representatives — including the finance minister, the SIFC (Special Investment Facilitation Council) National Coordinator, the Minister of Industries, and the FBR (Federal Board of Revenue) Chairman — repeated the same message. They acknowledged that taxation and other policies are unfair, agreed with private-sector complaints, and simultaneously asked what the government should do in such difficult circumstances.
It is a smart move to play with the narrative and dodge the private sector, as private sector’s agony or anguish is increasingly growing. Government representatives start by agreeing on the issues of higher taxation, bloated government size, over-regulation, and inefficiencies in the energy sector, but their next argument is that they cannot fix these problems alone, and that the private sector must join in to bring growth back.
Well, the private sector should and must play its role, but the government must show some action, as mere talk will not be enough to boost confidence. The government needs to demonstrate resolve toward structural reforms, including expanding the tax base, reducing government size, slashing transmission, and distribution losses in the energy sector to permissible levels, strengthening regulatory capacity, and bringing political stability. Without inclusive policies (both political and economic), confidence and investment will continue to remain elusive, to say the least.
Copyright Business Recorder, 2025.
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