(Asghar Ali Mubarak )
ISLAMABAD (TNS) The Uraan Pakistan project for economic development and prosperity can be considered a strong source of government commitment, which aims to bring the country to the stage of economic stability in the next 5 years and take its reform agenda forward.
The New Year can be considered important in terms of political stability because the political leadership is determined to move Pakistan forward politically and economically.
If the political leadership’s negotiation process is fruitful, then progress in the economic field will not be stopped. This stability will become a source of economic stability. However, ensuring peace and security is also the responsibility of the government and the state. Especially the increasing trend of terrorism is a test.
The army and other institutions have made a history of sacrifices to eliminate terrorism and extremism in the Pakistani soil and are still working with unity and seriousness.
Prime Minister Shehbaz Sharif should get credit for pulling the sinking economy out of the mire in difficult circumstances and moving forward. He undoubtedly had the full confidence of the state in this regard and his economic team also worked.
Today, international financial institutions including the IMF and other Middle Eastern countries including China, Saudi Arabia are also seen expressing confidence in the reforms of the Shehbaz Sharif government and all this was possible because instead of getting involved in difficult situations and bitter political situations, he focused on the economic, financial and development process.
It can be said from his governance reforms and initiatives that his active role at the national level can lead to economic recovery, development and taking the country forward.
It was to the credit of the Prime Minister that he kept looking to his elder brother Nawaz Sharif in important and big decisions and at the inauguration ceremony of Uraan Pakistan, he also conditioned the process of economic development with the policies of Nawaz Sharif in the past.
Last month, Prime Minister Shehbaz Sharif presented a five-year national economic plan ‘Uraan Pakistan’ to take the country towards sustainable development.
Meanwhile the Minister for Planning Ahsan Iqbal has directed all the concerned ministries to prioritize their targets in line with Uraan Pakistan and appoint a senior focal person to maintain constant coordination and ensure progress.
Chairing a consultative meeting on the Uraan Pakistan Action Plan, he highlighted the main goal of achieving sustainable development, achieving rapid economic growth and identified three important factors for the ministries that can contribute to the stability of the economy.
To strengthen cooperation with provincial governments, Ahsan Iqbal stressed the need to involve stakeholders through a comprehensive strategy and proposed workshops.
A statement issued by the Ministry of Planning quoted Ahsan as saying that a shift towards export-led growth is necessary for long-term economic stability. The current export level of $40 billion is insufficient and export growth should be increased to $100 billion. Two-thirds of the country’s exports come from low value-added textile products, which requires a major change in the export system.
Highlighting past economic challenges, the federal minister claimed that due to poor governance, the Public Sector Development Program (PSDP) has come down from Rs 1,100 billion in 2018 to Rs 400 billion in 2022.
Pakistan has agreed to a $1 billion loan with two Middle Eastern banks on terms of 6 to 7 percent interest rate. “We have moved forward in signing term sheets with two institutions – one bilateral and the other for trade (finance),” Finance Minister Muhammad Aurangzeb told reporters during an interview on the sidelines of the World Economic Forum (WEF) annual meeting in Davos. “These loans are short-term or up to one year.”
Pakistan plans to improve its fiscal position after receiving a $7 billion bailout from the International Monetary Fund (IMF), the first review of which is scheduled for the end of February.
The finance minister said that we will conduct the first formal review of the EFF in the end of February. “We seem to be in a good position for this review.”
The IMF’s Extended Fund Facility (EFF) provides financial assistance to countries facing serious medium-term balance of payments problems resulting from structural weaknesses that take time to resolve.
In an article published in the World Economic Forum (WEF), Pakistan’s Finance Minister Muhammad Aurangzeb has written that Pakistan’s “innovative approach” to taxes and economic stability offers “valuable guidelines” for other developing economies.
The finance minister is currently in Davos to attend the WEF’s annual meeting, which is being held from January 20 to 25.
The annual meeting 2025 provides an opportunity for world leaders to come together to address key global and regional challenges. These include preventing geopolitical shocks, boosting growth to improve living standards, and promoting a fair and inclusive energy transition.
In an article titled “Pakistan’s Economic Recovery: A Path to Sustainable and Inclusive Growth,” Finance Minister Muhammad Aurangzeb said that Pakistan has embarked on a revolutionary journey towards economic stability and growth.
Pakistan has implemented decisive reforms to lay a strong foundation for sustainable and inclusive growth while confronting major challenges. The article says that today the results of these efforts are becoming clear and the economy is showing resilience and new potential.
Muhammad Aurangzeb said that when he took over as Finance Minister, Pakistan was facing severe fiscal and monetary policy pressures. Inflation had reached a record 38 percent while foreign exchange reserves had fallen to dangerously low levels as it could have been used to import essential goods like food and fuel.
According to him, the complex effects of Covid-19 and the devastating floods have caused losses of more than $ 30 billion and these factors have further tested us. A series of necessary reforms were implemented after he took office.
These include stabilizing the exchange rate, tightening monetary policies and controlling inflation through targeted monetary intervention. With the help of the IMF’s $ 7 billion Extended Fund Facility (EFF), we have initiated structural reforms in key sectors such as energy and taxation.
The centerpiece of this effort was ‘Uraan Pakistan’, an economic transformation plan launched in 2024. The initiative aims to achieve sustainable, export-led GDP growth of 6 percent by 2028 through public-private partnerships, increasing export competitiveness and improving public finances.
The Finance Minister added that the Uraan Pakistan plan also includes addressing key challenges such as child malnutrition, educational outcomes and the adoption of clean energy. By integrating sustainability into our development framework, we are contributing to global efforts to achieve the United Nations Sustainable Development Goals (SDGs).
In June 2024, the government presented a reform-oriented budget that aimed to generate revenue of Rs13 trillion, a 40 percent increase over the previous year. These reforms focus on broadening the tax base by targeting low-tax sectors such as agriculture, real estate and trade, while leveraging technology to enhance implementation and transparency.
Modernization of the Federal Board of Revenue (FBR) has helped improve tax administration. He further wrote that Pakistan’s economy is on the path of recovery, inflation has come down to 4.1 percent (in January 2025) and foreign exchange reserves are sufficient to cover two months of essential imports. Merchandise exports have increased by 7.1 percent and the IT sector has grown by 28 percent year-on-year.
Pakistan’s global default risk has decreased by 93 percent, indicating renewed confidence in the country’s financial stability. Local and foreign investors, including global companies like Aramco, BYD and Samsung, are playing their part in this economic recovery, which reflects Pakistan’s potential as a profitable investment hub.
The Finance Minister also said that Pakistan’s current account has been in surplus for several months and investor confidence is at a “two-year high.” According to him, foreign direct investment (FDI) increased by 20 percent in the first half of fiscal year 2025. Initiatives like Roshan Digital Account have led to investments of over $9 billion, while remittances have reached a record $35 billion this year. Moreover, Pakistan’s equity market has given a profit of 87 percent in dollar terms, indicating strong investor sentiment.
The Finance Minister also said that Pakistan’s progress has been acknowledged and the three top global rating agencies have upgraded the country’s rating. He added that Moody’s, recognizing the impact of our policy measures, revised Pakistan’s economic outlook to ‘positive’ in September 2024.
The Finance Minister said that Pakistan is addressing fundamental shortcomings in revenue, energy, public sector enterprises (SOEs) and privatization to exit the cycle of external assistance. Empowering the federal government, reforming SOEs, and promoting export-led growth will strengthen domestic revenue sources and reduce dependence on international funding programs.
Moreover, Finance Minister Muhammad Aurangzeb said during a panel discussion at the World Economic Forum that Pakistan’s tax-to-GDP ratio has improved and the debt-to-GDP ratio has decreased, which proves that Pakistan is moving in the right direction. Pakistan’s biggest challenge is the twin deficits of current and fiscal accounts.
He highlighted the need to keep the tax-to-GDP ratio “sustainable.” He said that we are between 9 and 10 percent and are now moving towards 13.5 percent through structural reforms. The government is focusing on reducing its expenditure and debt servicing. Pakistan’s debt-to-GDP ratio has improved and has come down from 78 percent to 67 percent, although there is still a long way to go, but we are moving in the right direction. On the issue of debt utilization, the former banker said that I don’t think there is anything wrong with borrowing. The question is what you borrow for, while emphasizing that loans should be used to increase productivity and exports rather than funding subsidies or routine expenditures.
On the path of the country’s economic growth, the Finance Minister admitted that Pakistan’s economic growth has not been consistent. He said that when the GDP growth rate reaches 4 percent, since the economy depends on imports, we lose foreign exchange and a balance of payments problem arises, which forces us to seek help from the International Monetary Fund (IMF).
He said that of course we want sustainable growth, but this can only be possible by making the infrastructure of the economy export-oriented.
In response to a question on the China-Pakistan Economic Corridor (CPEC), he said that the focus in the second phase of CPEC will shift from government-to-government (G2G) cooperation to business-to-business (B2B) partnerships. The government aims to convince Chinese companies to shift their manufacturing units to Pakistan so that they can export from Pakistan.
On diversifying the capital market, Muhammad Aurangzeb said that Pakistan aims to learn from the experiences of Egypt and diversify access to the capital market and improve credit ratings. He said that we are also trying to issue Panda Bonds, as Pakistan wants access to the world’s second largest capital market.
In response to a question about the plan to create local employment opportunities and prevent the exodus of skilled manpower from the country, the former banker said that from my point of view, it is not a debate, so if good opportunities are available for the young men and women of Pakistan, they should definitely take advantage of them.
We have to create the necessary ecosystem, which the government is working hard to provide. The finance minister reiterated that the government is not in the business of doing business. He added that there are countless opportunities for the youth in Pakistan’s IT sector.
