An economy that delivers

For an exporter awaiting a tax refund, reform becomes tangible when the money arrives in the bank. For a factory, it is reliable energy at a predictable cost. For a farmer at the tail of a canal, it is water arriving when promised. These everyday transactions offer a useful starting point for Pakistan’s reform agenda. Additional approvals, delayed payments and unpredictable charges raise production costs and make it harder to retain buyers abroad. Easing those frictions could bring benefits that businesses and households can readily recognise.

The American midterm elections of November 3, 2026 provide a timely backdrop to this discussion. Reporting on the elections has highlighted concerns about prices and affordability – issues that bring economic policy back to the kitchen table and the factory gate. The comparison has limits: Pakistan’s institutions and circumstances are different, and no election offers a ready-made reform blueprint. Even so, the focus on everyday economic outcomes provides a useful starting point. For Pakistan, expensive energy, weak export growth and delayed investment offer reasons to revisit familiar approaches, building on what has worked while making room for better ideas.

These efforts need a clearer economic philosophy and a common direction. When investment incentives sit alongside additional permissions, or competition policies coexist with protection for incumbents, businesses receive mixed signals. The organising principle should be straightforward: make serving customers more rewarding than obtaining special treatment. Predictable rules and opportunities to enter, invest and exchange allow firms to earn their place through better products, lower costs and reliable service.

Competitive markets offer a practical way to put that principle to work. Knowledge of customers, costs and opportunities is dispersed across the economy, beyond what any single institution can gather. Prices help communicate demand and scarcity; profits encourage a response, while losses suggest that an approach may need to change. An exporter choosing between fibres or a factory comparing energy suppliers can test an opportunity through a transaction. Where entry is open and customers can switch, suppliers have an incentive to improve value and service. Markets provide direction not because every decision succeeds, but because alternatives can be tried and mistakes corrected. Their strength lies in allowing many people to contribute to the discovery of better opportunities.

That case for markets also calls for care in how they are organised. Private ownership alone does not ensure competition, and a protected monopoly can leave customers with little choice. Fair access to essential inputs and enforceable contracts would help new businesses compete on merit. Consumer protection, action on pollution, public goods and support for people unable to meet essential needs remain important public responsibilities. Markets can guide commercial resources without settling every social priority. The opportunity is therefore not to withdraw the state, but to strengthen its ability to protect fair competition and deliver the services on which people depend.

Investment confidence must begin at home. Unless local businesspeople and households trust the system enough to commit their own resources, Pakistan cannot realistically expect substantial, sustained foreign direct investment. Individual foreign projects may still proceed, but they cannot substitute for a climate in which domestic investors see a future. Predictable policies, fair treatment and timely enforcement are central to building that confidence. The strongest case to investors overseas is a country in which its own people are willing to invest.

This approach becomes useful when connected to practical changes. The Pakistan Institute of Development Economics (PIDE), in its Sludge Audits, Volumes 1–3 (2022–2024), examines the burden of duplicative paperwork, attestations, permissions and delays; the third volume focuses on the judicial system. Its work provides a helpful basis for distinguishing necessary safeguards from procedures whose costs may outweigh their benefits. Reducing those burdens would leave more time for production and make investment easier to plan. The proposals that follow share that purpose: release working capital, improve access to inputs and infrastructure, and make rules more predictable. The exporter awaiting a refund offers a natural place to begin.

For exporters, a useful first step would be to automate low-risk refunds and pay verified claims within 30 days of filing, supported by post-payment audits. Publishing the value and age of outstanding claims would make progress visible. A simpler arrangement aligned with actual tax liability could replace additional advance collection on export receipts. Consistent implementation of the published tariff-reduction policy, including removal of duties that make inputs more expensive than competing finished products, would improve planning. Predictable access to cotton, man-made fibres, machinery and spare parts, alongside risk-based customs inspections and published port clearance times, could help manufacturers respond more confidently to orders.

Tax reform could make expansion easier for compliant businesses. Harmonised goods and services tax filing, valid input credits through the supply chain and fewer overlapping withholding obligations would reduce the cash tied up in compliance. Matching land and income records could improve collection from large earners with taxable agricultural income, while updated urban property valuations and transaction data could support fairer assessment of high-turnover traders. Publishing the cost of exemptions and reviewing them against sunset provisions would bring greater transparency. Any rate reductions would still need durable collections or expenditure savings to protect fiscal stability.

Power reform could begin at the feeder – the circuit supplying a local distribution area – where incoming electricity, billing and collections can be compared. Publishing losses, collections and interruptions would make service improvements easier to track. Transmission investments that bring cheaper generation to consumers, together with bilateral purchases under transparent network charges and explicit treatment of legacy obligations, could improve affordability. A review of the captive-power gas levy could set out a costed route to phase-out, accounting separately for lost levy receipts and changes in grid revenue. Any reduction would need identified, durable revenue measures or verified expenditure savings, rather than assumed growth dividends. Essential services and targeted household assistance would remain protected, with support through the Benazir Income Support Programme (BISP) accompanying the withdrawal of broad subsidies.

A consistent demand forecast across power and gas would also help energy procurement. Additional liquefied natural gas (LNG) commitments could be assessed against domestic production, power dispatch, industrial demand and existing contractual obligations, comparing diversion or deferral costs with taking delivery. Published business cases for storage, terminals and generation would clarify utilisation, financing and the effect on bills under low-demand conditions. Separately reporting the cost of settling accumulated circular debt – the unpaid obligations across the energy supply chain – and the current monthly operating balance would make new arrears easier to identify.

Public administration would benefit from the expertise, continuity and authority to carry these reforms through. Specialist career streams in energy, taxation, procurement, digital systems and public finance, with transparent access for qualified career officers and outside applicants, could strengthen capacity. Clear authority over staffing and approved budgets, matched by service standards, predictable tenure and written reasons for early transfers, would support consistent delivery. Reporting customs clearance, utility reliability and independently verified employment outcomes could help institutions learn where improvements are needed. Due process and protection for lawful, documented decisions remain essential. Digital systems could also show where a file is held, how long it has waited and what would resolve it.

The reform agenda requires a review of proliferating institutions and overlapping mandates. Mapping responsibilities across ministries, regulators, authorities and levels of government would identify duplicated approvals, conflicting powers and functions that no longer serve a necessary purpose. Where justified, consolidation or retirement of mandates should simplify delivery while preserving independent oversight and essential safeguards. Each reform needs an identified lead institution, clear supporting responsibilities, a deadline, funded milestones and measurable outcomes against a baseline. Regular progress reports should explain delays and guide adjustments. Rationalisation belongs within the programme itself, measured by better service rather than changes to an organisational chart. Simplifying procedures will achieve little unless the institutional arrangements behind them are simplified too.

PIDE’s sludge work provides a clear starting question for every permission: does it provide a necessary safeguard, and could that safeguard be achieved more simply? Requirements should be reviewed on that basis, distinguishing useful regulation from inherited procedure. Digitisation should follow simplification, not reproduce the same approvals online. A public register of licences and inspections, a stated legal purpose for documents and one business identifier would reduce repeated requests for information already held by the state. Decision deadlines, written reasons for refusals and independent appeals are necessary to give applicants greater certainty. Exceptions need transparent criteria, including a published legal basis, eligibility and review date, rather than reliance on personal or political access. Alongside digitised land titles and utility connections, these changes would preserve protection while reducing the need to navigate several offices.

Timely justice is essential to making these reforms effective. Refund deadlines, commercial agreements and digitised land titles all depend on a credible way to resolve disputes. Accessible, time-bound administrative or regulatory appeals should handle routine matters first, with reasoned decisions, independent judicial review and urgent relief where needed. For cases requiring adjudication, reliable hearing schedules, fewer avoidable adjournments, simpler small-claims procedures and effective enforcement are practical priorities. Reporting the age of unresolved cases, alongside disposals, would provide a fuller picture of progress. Timeliness and fairness belong together, supported by courts independent of political pressure. A right has limited practical value if it cannot be secured while the opportunity to use it remains.

Public spending could be guided by similarly clear criteria. Assessing state enterprises by cash support, guarantees and commercial prospects would provide a basis for restructuring, competitive sale or closure, with explicit provision for public services and worker transition. Publication of procurement awards, beneficial ownership and contract variations would improve transparency. New development projects could be compared with the benefits of completing and maintaining existing assets, with operating costs and the responsible department identified from the outset.

The obsession with wider roads and proliferating underpasses and flyovers mistakes concrete for progress, entrenching car dependence instead of confronting sprawl and long journeys. The economy pays the price in construction and maintenance bills, fuel consumption, congestion, pollution and lost working time. Public spending must shift from road widening and new flyovers to reliable bus services, continuous footpaths and safe crossings, while planning rules must allow homes, shops and workplaces closer together rather than force every daily journey onto the road.

In agriculture, measurements at canal heads and tails and publication of actual deliveries could support fairer water service, with revised charges linked to improvement. Independent seed testing and local variety results, particularly for cotton, would help growers choose. More accessible warehouse receipts, cold storage and produce grading could extend opportunities to smaller farms. In education, attendance and basic reading results could guide resources towards pupils falling behind, while independently verified job retention could inform vocational funding. Safe transport, childcare and employer-backed apprenticeships would make paid work more accessible.

Population growth needs an explicit place in the reform agenda. The 2023 census recorded average annual population growth of 2.55 percent between 2017 and 2023, increasing demand for schools, jobs, housing and basic services. A sustainable demographic transition should be supported through voluntary, informed choices, better education and accessible healthcare, without coercion or numerical quotas. Provincial and local budgets need to incorporate population projections, with clear departmental responsibilities, so investment reflects future needs. Progress in school completion, service access and employment should show whether opportunities are keeping pace with a growing population.

There is good reason to move steadily but without undue delay. Poverty, exclusion from school and poor nutrition are overlapping signs of lost opportunity, not separate populations to be added together. Children’s needs continue while institutions adapt. Investment in nutrition, schooling and targeted support can therefore proceed alongside wider reform, rather than wait for growth alone to address them.

Taken together, these proposals call for a fundamental institutional reset: a reconsideration of mandates, discretionary powers and accountability, with overlapping responsibilities rationalised as part of the programme. Competitive markets should guide commercial decisions, supported by a state that provides fair rules, essential safeguards and effective public services. Two complementary tests give the programme direction: whether commercial reforms improve entry, information and value creation, and whether public-service reforms improve access, quality and public value. Both require fiscal sustainability and visible results.

The scale of need makes progress urgent: the World Bank’s Poverty and Inequality Platform puts 22.96 percent of the population below the international extreme-poverty line of USD 3 a day, measured at 2021 purchasing power parity, in 2024; UNICEF estimates that 25.1 million children aged 5–16 are out of school – 35 percent of that age group. Progress must be felt in a refund paid, a shorter customs queue, a reliable energy connection, a dispute fairly resolved and a child learning to read. An economy that delivers makes such outcomes increasingly ordinary, giving people confidence to pursue opportunities under rules they can trust.