The public, hoping for new job opportunities, salary increases, and relief in utility rates and taxes, may feel disappointed. However, the corporate sector, cognizant of the fragile economic situation and wary of repeating the boom-bust cycles of the past, has expressed support for the government’s policy of prioritising stabilisation over growth in Pakistan for now.

Finance Minister Aurangzeb Khan recently reaffirmed the government’s commitment to maintaining stabilisation policies, emphasising a cautious path rather than rushing into a pro-growth strategy.

While not necessarily advocating for populist policies, some observers criticised Finance Minister Khan’s statement as insensitive and lacking empathy for the working masses who have borne the brunt of stabilisation measures.

Leaders from second-tier businesses, represented in local chambers, especially those engaged in sectors like information technology, construction and agriculture, argued that the government could have taken a more balanced approach instead of villainising growth.

They suggested focusing on sectors that rely on internal resources and have minimal impact on the country’s current account. Some pro-PMLN business leaders advised the government to work on improving ties with neighbouring countries to capitalise on regional trade potential.

“One expects more from the leader of the economic team of an elected government, even a weak one. [Mr Aurangzeb’s] attitude reflects a complete disconnect from the struggles of ordinary Pakistanis, who are deeply distressed.

“For the majority, life has become a daily battle for survival. His message, effectively, was that he doesn’t care about their plight and is solely focused on securing his own position by staying in the good graces of his patrons and the IMF [International Monetary Fund],” remarked a bitter analyst speaking anonymously on the finance ministers’ stance.

Dr Khurram Tariq, President of the Faisal­abad Chamber of Commerce and Industry, expressed scepticism about the rationale of prioritising stabilisation at the expense of growth. “This policy is not tenable. When accounting for population growth, Pakistan’s net growth is effectively negative. The government must adopt a cautious yet proactive approach to accelerate growth,” he argued.

Majyd Aziz, former president of the Karachi Chamber of Commerce and Industry, was equally unimpressed, dismissing stabilisation as a government excuse for its failure to deliver growth. He attributed the country’s low growth to factors such as excessive government interference in markets, inadequate and inefficient infrastructure, a lack of commitment and capacity to pursue privatisation, an ineffective Federal Board of Revenue, poor service delivery in the social sector and insufficient interest in public private partnerships in health and education.

He also criticised the government’s weak economic diplomacy and lack of focus on attracting both local and foreign investment. Despite this critique, Mr Aziz acknowledged that the government had managed to rekindle some hope within the private sector, which he described as only rays of light.

Arif Habib, a prominent businessman with an interest in stocks and real estate, believes that economic growth in Pakistan is not inherently tied to worsening current account deficit (CAD). “To my mind, the risk of exacerbating the CAD can be mitigated by carefully selecting growth sectors. For in­­stance, focusing on agriculture, information technology [IT] and construction would not only ease pressure on the CAD but also create significant employment opportunities, as these sectors are labour-intensive.

“Currently, the construction material industry is operating at 55 per cent of its capacity. Promoting the construction sector would enhance capacity utilisation, boost tax revenues and increase the GDP growth rate without requiring substantial additional investment in imported machinery or inputs,” he explained.

Leading figures in Pakistan’s corporate sector, including Muhammad Ali Tabba, CEO, Lucky Cement, Saquib Shirazi, CEO, Atlas Honda and Ehsan Malik, CEO, Pakistan Business Council (PBC), expressed their support for Finance Minister Aurangzeb Khan and his vision for country’s economic direction.

“I support the government’s policy to prioritise and consolidate economic stability instead of succumbing to the temptation of premature growth acceleration. In the first year of four recent IMF programmes, we witnessed similar stability, only for successive governments to ease monetary and fiscal policies, triggering import-led demand and leading to recurring balance of payment crises.

“This time, the government would be wise to focus on fundamental reforms — such as privatisation, broadening of the tax base, right-sizing the government, providing energy at a competitive cost, and sharing responsibility with provinces for development and social security net — before shifting its focus to growth.

“That said, there are sectors with untapped capacity and scope for growth that are not significantly reliant on imported inputs, plant or machinery, such as agriculture, IT and IT-based services, tourism and construction. These, along with sectors where Pakistan holds comparative advantage, should be supported. Achieving this requires an industrial policy aligned with the country’s fiscal and investment policies.

“Fiscal policy must encourage wealth creation through legitimate and competitive means, as this drives job creation and grows the tax revenue. Most importantly, predictable policies will attract investment, but this must be directed towards export-oriented sectors rather than primarily focused on the domestic market,” Mr Malik noted.

Abdul Aleem, Secretary General of the Overseas Investors Chamber of Commerce and Industry, emphasised the need for structural reforms to sustain growth without creating deficits. He highlighted the importance of tax base expansion, tariff harmonisation, energy sector efficiency, and governance reforms to ensure long-term economic stability.

Published in Dawn, The Business and Finance Weekly, January 13th, 2025