DAWN Editorials - 18th August 2025

[zarnishhayat]

No easy path
IN recent months, the economy has offered some welcome signs of stability: inflation has slowed sharply, reserves have climbed above $14bn, the current account is in surplus, and the fiscal deficit has been reined in.

These improvements — achieved mainly through IMF-prescribed austerity policies — have prompted global rating agencies to lift Pakistan’s sovereign rating, hinting at a restoration of market confidence in its economy. But the weaknesses are still obvious. Large-scale manufacturing shrank by 0.74pc last year, missing even the government’s modest growth target of 3.5pc.

This is not an isolated setback. Big industry has been stuck in a cycle of low growth or contraction for three years on the trot. That LSM, which contributes around 8pc to GDP, has failed to achieve sustainable momentum for three years running should set off alarm bells for policymakers as it is yet another reminder of the structural weaknesses weighing on the fragile national recovery. The year-on-year growth of 4.14pc in LSM output in June — the fourth straight month of positive numbers — offers hope.

Yet, the simultaneous month-on-month decline of 3.67pc underscores the brittleness of this recovery. This volatility indicates deeper, unresolved issues: higher than regional energy prices, weak investment on elevated borrowing costs, high tax burden on the corporate sector, policy unpredictability and ‘informal’ curbs on imports, including raw materials, due to a dollar liquidity crunch. The recent positive spurts in big industry output, therefore, should not be mistaken for a turnaround. The slower growth in LSM output mirrors the overall low growth of GDP, which expanded by just 2.7pc last year after swinging between contraction and modest growth in the previous two fiscal years.

In its last monetary policy statement, the State Bank rightly underlined the need for steadily executing structural reforms to consolidate recovery, deepen macroeconomic stability and achieve sustainable growth. The recent macro improvements — reflected in lower inflation thanks to a global drop in oil and commodity prices, reduced fiscal deficit achieved largely through curtailed development spending and austerity measures and a build-up of foreign exchange reserves supported by debt rollovers by friendly countries, modest multilateral inflows, rising remittances and strict import controls — are fragile at best.

These improvements depend on external and temporary support, such as debt rollbacks, limited multilateral financing, remittances, etc, rather than durable fiscal and productivity reforms, leaving the economy only a small shock away from crisis. That Pakistan’s rating remains in speculative territory despite the upgrade from rating agencies is a reminder that markets still view the risks as high.

The question is: can policymakers use this breathing space to push through reforms that improve productivity, cut energy costs and attract investment? Without this, the economy will remain where it has been for years: underperforming, vulnerable and dangerously reliant on stopgap measures.

Published in Dawn, August 18th, 2025

National drift WE have drifted quite a way from Mohammad Ali Jinnah’s vision for Pakistan; there has been no shortage of commentary reminding us of this over the past many years. Yet just how far we have moved from the Quaid himself only became clear this Independence Day, when, in the enthusiasm to celebrate the occasion as a military victory parade, the government ‘forgot’ to picture Mr Jinnah and other national leaders on an official advertisement issued to commemorate the event. The law minister, who said he had been ‘heart-afflicted’ by the oversight, was himself unaware of the omission until the opposition raised the matter in the Senate on Friday. Had the omission of the nation’s founding father from an Independence Day communication been so inconspicuous? The government, together with various state institutions, should introspect. Cities nationwide were plastered with banners and posters honouring and congratulating the present-day leadership on the occasion. The politicians could have done much more to highlight the contributions of the founders of the nation.

Independence Day was traditionally an occasion to celebrate the country and its freedom, and its spirit should remain dedicated to the country’s founding vision, and to the people whose sacrifices made Pakistan possible. Our armed forces did indeed achieve commendable results in the recent conflict with the country’s eastern neighbour. However, a celebration of these should perhaps have been left to the upcoming Defence Day, which would have offered a much more suitable occasion. One is also compelled to comment on some of the national awards and accolades that were conferred on Independence Day. Is it suitable that, year after year, exclusive honours are distributed freely among political loyalists rather than genuine achievers? According to the law minister, the prime minister’s entire war cabinet received awards because they ‘spent many sleepless nights to remain available for emergency decisions’. Eight more allied lawmakers, also from the ruling parties’ camp, received awards for travelling around the world as part of a post-hostilities diplomatic offensive. It is a mercy that the prime minister turned down an award for himself. One wonders what need there was to celebrate politicians in this manner. This Independence Day might have been remembered as a moment to reaffirm Mr Jinnah’s vision. Instead, it became an occasion for the powerful to honour themselves.

Published in Dawn, August 18th, 2025

Hockey’s woes THE national sport continues to suffer. Years of mismanagement have plunged Pakistan hockey into a state of disrepair that has seen not only players go unpaid but the national team unable to fund its participation in international tournaments. Those tournaments do not surpass the FIH Pro League — the competition where the game’s elite feature, a place where Pakistan have long aspired to be. Once the undisputed kings of world hockey, they are now unable to dine with the world’s best. Sporting reasons aside, they do not have the finances to do that. And while the cash-strapped Pakistan Hockey Federation is asking for funding to the tune of Rs350m, the government seems to have lost faith in it. The lack of trust has not come overnight. The Pakistan Sports Board, the national regulatory body for sports, has repeatedly asked the PHF to submit statements of all its bank accounts and to show where previous grants from the PSB were spent. It is a condition for the disbursement of further funding, which the PHF should meet.

Pakistan did not qualify for the Pro League on the field. Instead, they were only extended the invitation by international hockey’s governing body after New Zealand, which won the second-tier FIH Nations Cup after beating Pakistan in the final, withdrew due to the high cost of participation. The PSB and the government are now mulling over the PHF’s demand to ensure Pakistan’s presence at the Pro League. It is a double-edged sword: on one end is the PHF’s chequered history, on the other a chance for the team to play consistently against top-ranked sides. From a purely sporting perspective, the government should support the team — the move could potentially revive Pakistan hockey — but it should make it binding on the PHF to improve its governance and show financial accountability. It should also ensure that the PHF immediately clears the dues of the players who participated in the Nations Cup.

Published in Dawn, August 18th, 2025