Pakistan’s economic model is highly flawed

Business leader and former president of the Islamabad Chamber of Commerce and Industry (ICCI), Dr. Shahid Rasheed Butt, on Friday said that Pakistan’s economic model is highly flawed. He said our flawed economic model cannot achieve any goal except elitism and increasing poverty in the country.

Shahid Rasheed Butt said in a statement issued here today that due to this economic model, the gap between the rich and the poor is continuously widening. Due to increasing poverty, it is becoming difficult for people to access health, education, and food, and social problems are growing.

Shahid Rashid Butt said that as long as the life of people with low incomes continues to be made complex, it is impossible to increase investment and productivity, and the economy will have to run on loans.

He said that most of the country’s policies have benefited the influential classes, tormenting the people. These policies have hindered public development instead of helping people out of poverty. Pakistan has borrowed from the IMF twenty-four times, and many other institutions, but the economy has deteriorated instead of improving.

The social and economic deterioration shows that international institutions are not interested in improving the Pakistani economy or implementing essential conditions. If the IMF and the World Bank wanted, Pakistan’s economy would be much better, but he observed they aim to achieve political interests, for which Pakistan must be burdened with debt.

The business leader noted that Pakistan’s economy has faced persistent challenges, hindering its growth despite its significant potential. One primary reason is political instability. Frequent changes in government and inconsistent policies disrupt long-term economic planning and discourage local and foreign investment.

Additionally, Pakistan suffers from a narrow tax base, with only a tiny percentage of the population paying taxes. This leads to insufficient revenue for critical infrastructure development and social services. High levels of corruption further erode public trust and misallocate resources.

The country also faces an energy crisis, with frequent power outages hampering industrial productivity. Coupled with outdated infrastructure, these issues make it difficult for businesses to thrive and compete globally.

Another major factor is a heavy reliance on imports, which leads to a widening trade deficit. The inability to diversify exports beyond textiles limits foreign exchange earnings. Moreover, excessive borrowing to finance deficits has resulted in a growing debt burden, straining the national budget.

Pakistan’s education and skill development systems are inadequate, leaving many in the workforce underprepared for modern job markets. This, combined with a rapidly growing population, creates high unemployment and poverty rates.

Addressing these structural issues requires visionary leadership, consistent policies, and bold economic reforms to unlock Pakistan’s growth potential.

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