Ensuring economic, national security
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We are all aware of the short-term economic relief: a 60-year low inflation rate, remittances nearing $4 billion in a month, a current account surplus of nearly $1 billion and global oil prices dropping sharply from the low $80s to the $60s per barrel.
We're also anticipating almost certain inflows of $2 billion from the International Monetary Fund (IMF), including climate-linked funding, a sustainable increase in the tax-to-GDP ratio — though this disproportionately burdens the formal sector — and an astronomical rise in the KSE-100 index to 120,000 points.
Interest rate cuts from the peak of 22% to 10% in the coming months are widely expected. But while these indicators paint a positive picture, the real work begins now.
Geopolitical flashpoints demand economic readiness
Pakistan is now facing two major challenges that demand a shift in economic thinking. First is the recurrence of India-Pakistan tensions – this being the third major flashpoint in a decade after Uri in 2016, Pulwama in 2019 and now Pulwama in 2025. This period has also seen triple economic dips – in 2019 (the IMF-led stabilisation), 2020 (Covid) and 2022-23 (political instability).
While Pakistan's military strength is commendable, this last decade should have been used to strengthen our economic foundations through boosting the foreign exchange reserves, increasing exports and remittances, broadening the tax base, diversifying the economy into agriculture, minerals and IT and repaying external debts consistently.
Water crisis and canal development – unity over provincialism
The second challenge is domestic, which is the controversy around new canals and water distribution. India's threat to suspend the Indus Waters Treaty, which underpins Pakistan's agriculture, food security and social stability, comes at a delicate time.
The Green Pakistan initiative, spearheaded by the Special Investment Facilitation Council (SIFC), seeks to build six new canals – a visionary step. However, it must be clearly communicated to the public and provinces as a national priority rather than a provincial competition.
Zooming in on Pakistan through Google Earth reveals the stunning economic possibilities this land offers. From snow-covered mountains that feed rivers and tourism, to the fertile Indus plain that can feed hundreds of millions globally and onto the mineral-rich western belt of Balochistan, K-P and Sindh, Pakistan is a treasure trove. These areas are not just scenic; they are strategic, waiting to be tapped intelligently for national prosperity.
The canal network planned near the Cholistan Desert is a low-hanging fruit. It can irrigate millions of acres, attract foreign direct investment (FDI) and serve as a testbed for experimental agricultural techniques that can later be scaled nationally.
Similarly, regions between Multan, Sialkot and DI Khan and the eastern belt of Sindh beyond Mirpurkhas, Sanghar, Pano Aqil and Khairpur, all present significant agricultural potential. By engaging global agricultural experts and deploying modern techniques, Pakistan can turn its deserts into breadbaskets.
Pakistan's mineral resources are unparalleled: Thar coal, Reko Diq and the recent finds by National Resources Limited offer decades of energy security and export potential. Add to that our reserves of iron, copper, salt, limestone, rare earths, oil and gas. But exporting raw material is a missed opportunity. We need a robust exploration and value-addition policy to process and export finished products, just as Indonesia has done with palm oil and nickel.
Economic equity: all provinces must win together
The state must play a fatherly role by uniting provincial interests under the umbrella of national development. If Sindh fears water shortages due to canal construction, it should be assured of economic compensation through 25-50% revenue sharing from the Green Pakistan agricultural exports until the eight-million-acre-feet Bhasha Dam storage is completed.
Balochistan and K-P, too, must benefit from mineral FDI, tax revenues, jobs and infrastructure, while the federal government focuses on reducing the external debt and easing the tax burden on the formal sector.
It's unjust that honest industrialists and salaried professionals bear the brunt of taxation while large sectors – retailers, agriculture, real estate, wholesalers and service providers – escape their fair share. If Pakistan is to break its dependency on IMF programmes and endless bilateral rollovers, this imbalance must be addressed through consensus-based reform and enforcement.
In a volatile region, national economic interest must override party or provincial lines. The next decade can only belong to Pakistan if unity and economic clarity guide our path. We must build consensus across the aisle, across provinces and across sectors to explore, dig, drill, irrigate and cultivate, just as the US did during its energy revolution. The slogan for our time should be "Prioritise Pakistan – now or never."
The writer is an independent economic analyst
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He highlighted that with respect to scope of the sub-committee regarding LNG demand increase, a case has been moved for relaxation of moratorium in respect of pending and new individual gas connection applications. Minister for Petroleum Division observed that since option of a reduction of LNG cargoes is on the cards, therefore, optimum utilization of terminals needs to be worked out for cost reduction. It was noted that the option of shelving of 2 LNG cargoes per month working done so far takes into account the optimal combination for terminal capacity utilization which comprises of regasification of 3 LNG cargoes at terminal-1 and 4 LNG cargoes at terminal -2. Minister for Petroleum advised that sub-committee holds meeting(s) and finalizes its recommendations early next week. Sub-Committee-4: Domestic Gas Tariff Efficiency and Transparency: Chairman OGRA, being lead of this sub-committee made a presentation on the work done by the committee so far. He highlighted that for the review of the key component of the revenue requirement i.e, Return on Asset (RoA), OGRA has issued Letter of Intent (LoI) to selected consultant who will submit study/report within 90 days. He stated although the cost of gas alone is 89% of the total revenue requirements and there is little room for squeezing the cost components, however, OGRA is objectively reviewing the other components like fixed/ variable costs, T&D costs especially HR benchmarking. He informed that Sui Companies demonstrated improvement in their UFG against OGRA approved benchmark. He informed that as per the UFG study done in year 2018 through KPMG, UFG benchmark of 7.6 percent was fixed for a period of 5 years which comprises of 5 percent technical allowance and 2.6 percent based on meeting 30 Key Monitoring Indicators. He stated that digitization of gas flow stations like Sale Meter Station, Town Border Station and Consumer Meter Station is giving real-time information to companies and helping isolate the loss-making areas. Minister for Petroleum Division observed that in-line with licence condition of the Sui companies, the UFG targets need to be reviewed periodically. He also enquired after the UFG study done in 2018 which was valid until 2023, on how OGRA is benchmarking UFG targets thereafter. OGRA Chairman responded that earlier OGRA used to apply benchmark on both T&D UFG, however, now that practice was discontinued in FY23 and UFG targets are set separately for transmission and distributions segments. It was noted that OGRA is considering to do a new study on UFG benchmarking which would take 6-8 months' time. Minister for Petroleum Division advised that new UFG study be completed by OGRA by November 30, 2025. He also stressed upon the need that sub-committee should make recommendations at review of revenue requirements on quantitative basis (instead of qualitative basis) keeping materiality of report before the next meeting of the committee. Insiders claim that the Power sector Task Force has done extensive work on the issue of excess gas in the country and how to resolve RLNG supply issue. The officials also confirmed that senior members of the Task Force made a detailed presentation to the Prime Minister and senior government ministers and officials on roadmap for RLNG cargoes and ways to reduce gas prices for industry and power sector. Sources say this was aimed at improving energy security by increasing use of domestic gas and increasing exports through reduction of gas price for industry and power. Among various measures proposed, the RLNG ring-fencing mechanism was suggested to be done away with and having one blended gas price for industry and power. The final report will be submitted to the Prime Minister's Office as per Notification of the Committee. It was advised that meeting of the main committee may be held at on August 18, 2025 (today) at Head Quarters of Task on Power, Rawalpindi. Copyright Business Recorder, 2025
