You ever look at a country and think, damn, how did we go from potential to perpetual panic?
Once upon a time—let’s say, about 50 years ago—Pakistanis earned more than their South Asian neighbors. Yeah, more than India. More than Bangladesh. And way more than Sri Lanka. Fast forward to today, and we’re earning roughly half of what they do. It’s like watching someone. They once had a shot at med school. Now, they end up stuck reapplying every year with the same essay.
So what went wrong?
A lot. But not in the way that can be pinned on one corrupt government or one bad decade. This is long-haul decay. Think: population booms, economic planning that feels like copy-paste errors, and tax policies that barely scratch the surface. Dawn columnist Azmiraj Hussain laid it all out recently, and honestly? It reads less like a finance article and more like a slow-burning obituary for common sense.
Let’s start with the people. There are a lot of them. Pakistan’s population has quadrupled since the 1970s. Sounds like a good thing, right? Youthful energy, big workforce, all that jazz. Except—most of these young folks aren’t working yet. That means they’re not earning, not saving, and definitely not investing. Meanwhile, countries like India and Bangladesh have tilted the balance the other way—more working-age citizens, more economic momentum. If we had their age ratio, our savings rate could be 10% higher. That’s not a rounding error. That’s the difference between crawling and walking.
But it’s not just the headcount—it’s what we’re doing with the money. Or not doing. For decades, Pakistan has been spending like a kid with a credit card and no curfew. Nearly 60% of all government revenue goes toward interest payments. Not schools. Not hospitals. Just keeping the debt machine fed. And when the books don’t balance, guess what? We dial up the IMF. We’ve done it more than 20 times—most recently during the COVID shock and global oil mess. At one point, we had enough dollars to pay for just two weeks of imports. Two. Weeks.
And the IMF doesn’t come cheap. Sure, they give you breathing room. But then comes the belt-tightening—higher taxes, more austerity, and somehow still no real structural reform.
Here’s the thing nobody wants to hear but everyone needs to: Pakistan has to invest in people. That means health services that aren’t a joke. Family planning that actually reaches communities. And, yes, education for women, which always seems to be last on the list.
But investing means spending. And spending means you need revenue. Which brings us to the black hole of Pakistan’s economy—tax reform.
Right now, only about 1–2% of Pakistanis pay income tax. Sectors like agriculture, retail, and real estate? They’re practically in tax exile. If we’re serious, we need to raise an extra 6% of GDP in taxes. This would be necessary over the next five years just to achieve bare minimum functionality. And even then, we’d still be among the lowest in the world.
But raising taxes isn’t enough. We have to spend smart. Stop burning cash on loss-making state enterprises and subsidies for the rich. Use that money to build something—schools, clinics, clean water systems. You know, basic civilization stuff.
And here’s the kicker—none of this works if we don’t bring the world with us. Pakistan needs global partners. Institutions like the World Bank offer low-interest loans. Without them, we borrow at punishing rates. That just feeds the debt cycle and strangles private growth. It’s economic cannibalism.
Azmiraj Hussain ends on a sobering note: We can still turn this around. But it means changing everything. It affects how we tax and how we spend. It impacts who we invest in and who we choose to work with. If we don’t, the future isn’t a crisis. It’s crisis after crisis, forever.
And at some point, you stop calling it a rough patch—and start calling it reality.
