Inclusive growth requires more than stabilization

In a country that has long swung between fiscal crises and temporary relief measures, Prime Minister’s recent call to refine economic strategies in consultation with experts and business leaders comes at a pivotal moment. Economic stabilization – while necessary – is not enough to secure durable prosperity. What Pakistan urgently needs is sustained, inclusive, and broad-based growth driven by private enterprise, investor confidence, and consistent policies.
At a meeting with key representatives of the industrial and business sectors, the prime minister reaffirmed his government’s commitment to creating an investment-friendly environment and removing barriers for both domestic and foreign investors. His focus on clearing obstacles to new ventures reflects a welcome shift from reactive firefighting to long-term planning. Business leaders have long argued that predictable and transparent policies, rather than ad hoc relief, are what truly enable sustainable growth.
The prime minister rightly highlighted the role of exports and new industries in turning short-term macroeconomic improvements into long-term stability. With inflation easing, the policy rate lowered, and foreign exchange reserves stabilizing, Pakistan stands at a critical inflection point. If these gains are not directed into productive sectors such as manufacturing, energy, agriculture, logistics, technology, and value-added exports, they could quickly erode. The line between temporary recovery and genuine prosperity will be determined by structural reform.
The meeting’s agenda – reducing industrial costs, boosting competitiveness, and expanding export markets – directly targets Pakistan’s most persistent economic hurdles. Regional competitors like Vietnam, Bangladesh, and Malaysia have shown how focused export strategies, efficient trade facilitation, and infrastructure investment can attract billions in foreign direct investment (FDI). Pakistan, despite its strategic location and skilled workforce, remains stuck because of bureaucratic red tape, inconsistent tax policies, weak infrastructure, and energy bottlenecks.
Pakistani manufacturers face higher energy costs and longer port delays than their regional rivals. Customs processes remain cumbersome, and logistics infrastructure is outdated. Even when investors are interested, a lack of coordination between federal and provincial agencies causes delays that sap confidence. This is why the prime minister’s engagement with business leaders is crucial – but consultation must lead to action. Reforms must be implemented with speed and discipline.
Pakistan must adopt single-window clearances for businesses, simplified tax frameworks, digitized trade and regulatory systems, and long-term industrial policies that remain stable regardless of political change. Public-private partnerships (PPPs) will also be key to driving infrastructure and manufacturing investment. The government alone cannot build export zones, logistics hubs, and energy networks. By offering legal protection, transparent regulations, and strong incentives, it can encourage private sector leadership.
The prime minister Shehbaz Sharif was correct to emphasize making Pakistani products globally competitive. This requires both lowering costs and improving quality. Affordable energy, technological upgrades, and investment in human capital are essential. Countries like Malaysia and Vietnam transformed their economies by integrating into global value chains through special economic zones, technology transfer agreements, and export diversification.
Equally vital is policy consistency. Investors are not just deterred by taxes – they are deterred by unpredictability. Sudden tariff changes, shifting currency regimes, and inconsistent energy pricing make long-term planning almost impossible. To attract serious FDI, Pakistan must provide stable rules for at least a decade, independent of political shifts.
Energy reform is central to reducing costs. High tariffs and unreliable supply have hobbled industries for years. Rationalizing tariffs, expanding renewable energy, and improving grid reliability are critical. Reforms in logistics and railways are equally important to bring down transport costs and make exports more competitive.
At the same time, SMEs must benefit from economic stabilization. Too often, stabilization measures favor large corporations while smaller enterprises struggle with financing gaps and regulatory hurdles. Inclusive growth demands easier credit, streamlined registration, and targeted export support for SMEs.
This is also an opportunity for Pakistan to reassert itself on the global economic stage. Investors worldwide are looking for new markets with untapped potential. Pakistan, with its geographic location and young workforce, fits the bill – but it must prove itself reliable. Integration into global supply chains requires adherence to international standards, intellectual property protections, and stable trade norms.
To make this vision real, Pakistan’s economic institutions must be depoliticized and empowered. Ministries and regulators need professional management, data-driven governance, and accountability. Coordination between finance, commerce, energy, and investment agencies must drastically improve.
The prime minister’s call for inclusive and sustainable growth can mark a turning point, but only if it leads to concrete action. The window of opportunity is narrow. As the International Monetary Fund program nears its end, Pakistan must reduce its reliance on external support and build growth from within – through productivity, innovation, and private sector dynamism.
The coming months will test whether this government can move from consultation to reform. Success could mean economic sovereignty, export-led expansion, and investor confidence. Failure would perpetuate the cycle of temporary fixes and recurring crises.
Sustained growth will not come from slogans or short-term stabilization alone. It requires structural change, empowered private enterprise, and unwavering policy consistency. That is Pakistan’s challenge – and its opportunity.