Pakistan urgently requires economic and structural reforms

Pakistan is facing significant economic challenges. The country's growth rates are unstable, and the prices of basic goods are high. This situation is made worse by a large fiscal deficit and heavy borrowing, which pressure the economy further. A weak currency has raised the cost of imports, affecting overall economic health. The country needs major reforms in taxation and industrial development to promote long-term growth. Despite being one of the most populous nations, Pakistan lags behind smaller countries like Singapore and Georgia in terms of business readiness. These countries have efficient regulatory systems, while Pakistan is struggling with bureaucratic delays, high business costs, and inconsistent policies. Governance issues continue to affect progress. There are problems with rule of law that make long-term planning difficult. Although security has improved recently, concerns remain, especially in border areas. The judiciary is also overwhelmed, leading to slow justice for both citizens and businesses. Pakistan's tax system is complex and inefficient. The heavy reliance on indirect taxes and high rates discourage investment. In contrast, Estonia has successfully adopted transparent tax policies and digital transactions, improving revenue collection. Pakistan could benefit from similar changes. The World Bank Group's Business Ready 2024 report shows that Pakistan has a low rank in the global business landscape. Its scores reveal significant weaknesses in regulatory framework, public services, and operational efficiency. Compared to countries like Portugal and New Zealand, Pakistan shows clear gaps in transparency and service delivery. Many challenges exist, including difficult regulatory processes and an underdeveloped financial sector. Business operations are hindered by inadequate infrastructure and limited digital services. The government must strengthen these areas to support economic growth. A comprehensive reform strategy is critical for Pakistan's future. This includes improving governance, infrastructure, and tax systems. Making the regulatory process easier and boosting financial access for small businesses will help create jobs and stimulate growth. Judicial reform is also necessary to improve commercial dispute resolution. Simplifying the tax system and investing in vital infrastructure will provide businesses with the resources they need. Encouraging partnerships between public and private sectors and utilizing technology can create a more favorable economic environment. Pakistan must learn from countries like Georgia, which have made significant improvements by implementing pro-business policies. To achieve economic stability and growth, Pakistan needs to address its gaps in service delivery and regulatory enforcement urgently. Failure to make these necessary reforms could lead to severe consequences for Pakistan's economy and its relationship with the International Monetary Fund (IMF). Continuing fiscal deficits could limit the government's ability to repay debts and could deepen reliance on loans, discouraging both local and foreign investment. The urgency for structural reforms is clear: without action, financial vulnerabilities will worsen and sustainable growth will remain out of reach.