Is Fragmented Decision-Making Impeding Pakistan's Economic Growth?
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Synopsis
Pakistan's rich natural resources remain untapped due to fragmented decision-making and lack of accountability. This article explores the implications of ineffective governance on the economy, emphasizing the potential of the young population and the urgent need for reform.
Key Takeaways
- Pakistan has abundant mineral resources yet remains economically stagnant.
- Fragmented governance and decision-making hinder progress.
- The power sector faces severe challenges due to circular debt.
- A youthful population presents opportunities for growth, but education misalignment persists.
- IMF programs address financial issues but do not resolve governance failures.
New Delhi, Jan 19 (NationPress) Despite possessing abundant deposits of copper, gold, antimony, and rare earth elements, Pakistan has struggled to leverage these resources for economic advancement due to a fragmented economic decision-making process. An article in The News International reveals that the lack of a unified authority to approve mining operations hampers progress. The overlap between federal and provincial jurisdictions complicates decision-making, while courts frequently halt permits.
The article also sheds light on the power sector, noting that Pakistan has an installed electricity capacity of approximately 46,000 MW, while peak demand fluctuates between 28,000 and 30,000 MW. Electricity tariffs have surged from around Rs 20 per kWh in 2020 to Rs 40 per kWh in 2025, yet power outages persist. This ongoing crisis is attributed to circular debt exceeding Rs 3 trillion, with state-owned distribution companies incurring annual losses of Rs 500 billion and outstanding payments to Independent Power Producers (IPPs) amounting to roughly Rs 1.2 trillion.
While foreign investors express optimism about potential returns in Pakistan, they voice concerns regarding delayed contract enforcement, protracted arbitration processes, and contradictory actions among regulatory bodies and ministries.
Furthermore, the article highlights that 64% of the population is under 30 years old, and the working-age demographic (15-64) is increasing by about two million annually. However, the anticipated demographic dividend is not being realized due to a gap between educational curricula and job market needs, misalignment between provincial and federal entities, and a lack of national skill development strategies.
While IMF programs may help resolve some issues through adjustments in pricing, taxation, subsidies, and accounting, they do not address concerns around decision-making speed, jurisdictional conflicts, or the overall governance structure. The article concludes by noting that while provinces expend resources, the central government borrows, leading to centralized liabilities and diffuse accountability—a clear failure in command.
Point of View
It is essential to recognize the systemic issues hindering Pakistan's economic progress. The fragmentation in decision-making and lack of accountability are critical barriers that need addressing. A united approach is vital for harnessing the country's rich resources and capitalizing on its youthful population to ensure a prosperous future.
NationPress
20/01/2026
Frequently Asked Questions
What resources does Pakistan have?
Pakistan is rich in copper, gold, antimony, and rare earth elements.
Why is Pakistan unable to tap its resources?
The lack of a unified decision-making authority, along with fragmented governance and court interventions, hampers resource exploitation.
How does the power sector in Pakistan perform?
Pakistan has a significant electricity capacity, but ongoing circular debt and losses in state-owned companies lead to frequent power outages.
What is the demographic situation in Pakistan?
Around 64% of Pakistan's population is under 30, with a growing working-age demographic, but the potential for a demographic dividend is not being realized.
How could IMF programs help Pakistan?
IMF programs can address financial issues through price and tax adjustments, but they do not resolve decision-making or governance challenges.
