Pakistan enters its 80th year with a familiar routine: another IMF programme, another stabilisation declared a success, and multiple reform plans gathering dust. The script has barely changed in decades. Only the cast has. Countries once poorer than Pakistan rewrote theirs and moved ahead.
Pakistan has never been short of ideas or reform plans. What it lacks is the willingness to question established arrangements and challenge powerful interests. Nobody sat down to design all the dysfunctions we live with today. They persist because those with the power to change them see little benefit in doing so, while successive governments and centres of power have found business as usual more convenient than fundamental reform.
Pakistan’s economic history tells a disturbing story. GDP grew by an average of 6.8% annually in the 1960s and 6.5% in the 1980s. Growth declined to 4.6% in the 1990s and around 4% over the following two decades. Over the nine years ending June 2026, it averaged just over 3%, among the weakest sustained periods in our economic history. Against the 2.55% annual population growth recorded by the 2023 census, improvements in income per person have been painfully slow.
The consequences are reflected in human deprivation. The Planning Ministry’s preliminary estimate for FY2024-25 puts 28.9% of Pakistanis, about 70 million people, below the national poverty line. 77% of ten-year-olds cannot read and understand a simple text. Households struggle with expensive, unreliable electricity and inadequate access to clean cooking fuels. Income, learning and energy poverty reinforce one another, depriving people of the means to improve their lives.
The Labour Force Survey 2024-25 reports unemployment of 6.9%, rising to 12.6% among young people. Around 72% of non-agricultural employment is informal. Average monthly wages increased from Rs24,000 to Rs39,000 between the last two surveys, while consumer prices rose by more than 80%. Pakistanis earn more rupees but can afford less.
Investment remains around 14% of GDP, while bank credit to the private sector has declined to around 9%. External shocks explain occasional crises. They cannot explain decades of diminishing economic dynamism.
The deeper explanation lies in how power is exercised and accountability avoided. Pakistan has never allowed democracy to evolve into a stable system in which elected representatives exercise authority, institutions respect constitutional boundaries and voters hold governments accountable for outcomes.
Repeated interruptions and prolonged hybrid governance arrangements have blurred the distinction between authority and responsibility. Elected governments carry responsibility for outcomes they do not fully control, while unelected centres of power influence major decisions without facing electoral accountability.
UK company law recognises the concept of a ‘shadow director’: someone whose instructions a company’s board habitually follows and who can consequently bear directors’ duties and liabilities. The principle is instructive: those exercising influence should also bear responsibility. In Pakistan’s governance arrangements, influence and accountability are too often separated.
Political parties have accommodated these arrangements when convenient, protected their own interests and neglected institutional development. Parliamentary oversight has progressively weakened, while elected local governments remain inadequately empowered despite constitutional requirements.