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The fantasy of Uraan Pakistan

Pakistan’s history of economic planning is a tale of lofty ambitions, impractical promises, and recurring disappointments. The recently launched Uraan Pakistan, envisioned as a five-year National Economic Transformation Plan, is no different. The plan projects a vision of a $1 trillion economy by 2035 and $3 trillion by 2047, cloaked in buzzwords like ‘exports’, ‘digital transformation’, and ‘environmental sustainability’. Yet, beneath its veneer lies a familiar pattern of ambition untethered from pragmatism. As Shakespeare aptly described such endeavours, this too feels like “a tale told by an idiot, full of sound and fury, signifying nothing.”

At its core, Uraan Pakistan rests on the 5Es framework: Exports, E-Pakistan, Environment, Energy, and Equity. While these pillars are well-intentioned, the plan falters in providing actionable strategies to achieve them. For instance, it targets an increase in exports to $60 billion annually by 2029 but fails to address the structural deficiencies that undermine Pakistan’s competitiveness. Issues such as low productivity, outdated infrastructure, and a lack of integration into global value chains remain unaddressed.

Achieving a $1 trillion economy by 2035 also requires an annual growth rate of 9-10 per cent for the next decade – a feat Pakistan has never come close to achieving. Even with an optimistic assumption of 8.0 per cent growth for 10 consecutive years, the economy would only grow to approximately $798 billion, falling significantly short of the $1 trillion target. This highlights a fundamental mathematical inconsistency in the plan’s projections.

The absence of any commitment to structural reforms renders Uraan Pakistan a business-as-usual fantasy. The government’s inability to address the glaring inefficiencies in its system – such as the sprawling size of federal, provincial, and local governments – is a fundamental flaw. Pakistan operates with 39 federal divisions across 33 ministries, alongside countless attached departments and agencies. This bureaucratic bloat drains resources and stifles efficiency.

Drastic downsizing, alongside streamlining roles and approaches across federal and provincial governments that promote collaboration, is critical, yet it finds no mention in the plan. For example, in one of the poorest countries, the federal cabinet includes at least 40 ministers, advisors, and special assistants, compared to the US where the president’s cabinet has around 16 members. At the provincial level, each province in Pakistan operates with around 40 ministers, while California, the largest state in the US and equal to the fifth largest economy in the world, manages with a cabinet of approximately 10 members. Such glaring inefficiencies are a massive drain on public resources and hinder governance.

The failure to privatise loss-making state-owned enterprises (SOEs) like Pakistan International Airlines, Pakistan Railways, Pakistan Steel, and electricity distribution companies continues to bleed billions from the public coffers annually. These SOEs are not only financial liabilities but also symbolic of deeper governance failures. Uraan Pakistan does not outline a roadmap for privatisation or even restructuring of these enterprises. Without decisive action, these SOEs will remain an anchor dragging down the economy.

High tax rates, among the highest in the world, further deter investment. While the plan aims to increase the tax-to-GDP ratio to 16-18 per cent, achieving this without a major overhaul of the taxation system is wishful thinking. Pakistan’s growth has historically been driven by its large informal economy, which thrives on tax evasion. The plan offers no concrete measures to shift to a more formal economy or to reduce tax rates to attract investment in the formal sector. Without such reforms, raising the tax-to-GDP ratio to these levels is near impossible.

The plan talks about engaging the private sector but fails to detail how this engagement will be fostered or what policies will create an enabling environment. Encouraging private investment, especially given the poor state of risk capital, equity markets, and the banking system, requires more than vague promises. The absence of specific incentives or frameworks to mobilise private sector participation undermines the credibility of this pillar.

While the Governance Framework is mentioned, its specifics remain undefined. The biggest weakness in Pakistan has been poor governance, especially in the sectors crucial to human development (basic education and health) and the plan fails to offer concrete steps to address this challenge. Simply mentioning a framework without detailing its components, enforcement mechanisms, or accountability measures renders this proposal ineffective.

Pakistan’s risk capital ecosystem is virtually non-existent. The country has no significant venture capital or private equity funds to foster a robust startup ecosystem capable of competing globally. Its capital market remains among the smallest, with a market capitalisation of $52 billion in 2024, despite an 80 per cent rise in the stock index last year. The total capital raised through IPOs during this period was a meagre Rs8 billion (less than $30 million).

Similarly, Pakistan’s banking system, which remains largely focused on financing the government for profitability and avoiding risk, fails to channel funds effectively toward private sector growth. The lack of a disruptive strategy to address these systemic issues raises serious questions about how the private sector can mobilise the investment required to achieve $60 billion in annual exports and drive unprecedented economic growth.

The justice system, critical for enforcing contracts and ensuring business confidence, also languishes in disrepair. Pakistan ranks poorly in global indices for judicial efficiency and contract enforcement. Without improving the quality and efficiency of its justice system, investment and economic growth will remain stagnant. Basic education, skill development, and healthcare – key drivers of human capital – are in dire need of reform. Pakistan’s rankings in education, health, and workforce development are among the worst globally. The plan’s vague promises of producing 200,000 IT graduates annually do not address the systemic weaknesses in education quality and infrastructure. Without improving foundational education and skilling programmes, the dream of a knowledge-based economy will remain just that: a dream.

Uraan Pakistan’s lack of alignment with the country’s pressing challenges is another major shortcoming. The economy has been grappling with record-high inflation in the last few years. This year, despite some deceleration in inflation and a steep reduction in interest rates, a sluggish growth rate of 0.9 per cent was recorded in the first quarter, with stagnant growth in sectors such as agriculture and large-scale manufacturing remaining unaddressed.

Pakistan is currently under its 25th IMF bailout programme, which aims to stabilise its unsustainable debt, fiscal imbalances, and energy sector inefficiencies. Yet, the plan offers no solutions for these systemic crises. Energy shortages, exacerbated by circular debt and distribution inefficiencies, continue to choke industrial output. While energy is one of the pillars of the plan, there is no actionable roadmap for reforms. Similarly, there is no discussion on mobilising the massive investment required to address these challenges. Pakistan’s fiscal constraints, combined with its high-risk perception, make reliance on external funding an impractical solution.

Another fundamental disconnect lies between the Ministry of Finance, which oversees budgeting and macroeconomic policies, and the Ministry of Planning, which prepares long-term development plans. Historically, budgets and macroeconomic policies have been out of sync with such plans, rendering them largely aspirational. This disconnect persists in Uraan Pakistan. To address this, it would be more pragmatic to merge the planning function with the Ministry of Finance, creating a unified framework for financial management and actionable planning.

Most advanced countries, including the US, UK, Germany, and Japan, do not have separate planning ministries, nor do they prepare five-year plans. Their focus remains on integrating and flexible planning within broader economic and fiscal policies, ensuring alignment and necessary adjustments, given the pace of change in a vastly unpredictable world.

Despite its ambitious rhetoric, Uraan Pakistan is a classic example of business-as-usual planning. It avoids politically sensitive but necessary reforms such as reducing the size of government, privatising SOEs, overhauling tax policies, and improving regulatory frameworks. Its failure to engage key stakeholders – provinces, the private sector, and civil society – further undermines its credibility. Successful transformations require collaboration and ownership from all segments of society. Without this, Uraan Pakistan risks becoming another glossy document that gathers dust in government archives.

Uraan Pakistan could have been a turning point for Pakistan’s economy – a plan rooted in realism, structural reforms, and broad stakeholder engagement. Instead, it feels like an exercise in wishful thinking, disconnected from the country’s pressing needs and systemic flaws. Without addressing the structural impediments to growth – from bloated governance and loss-making SOEs to poor education, health, and justice systems – the plan’s goals are unattainable.

To truly transform Pakistan, the government must break free from its business-as-usual approach. This requires bold, decisive reforms, realistic targets, and an actionable roadmap. Anything less would be yet another chapter in Pakistan’s long history of unfulfilled promises, full of sound and fury, signifying nothing.

Syed Asad Ali Shah, "The fantasy of Uraan Pakistan," The News. 2025-01-18.
Keywords: Economics , Economic growth , Economic planning , Exports , Macroeconomic , Germany , Japan , IMF , GDP