DAWN Editorials - 24th August 2025

[zarnishhayat]

Size of the pie THE scope of work outlined for the newly constituted 11th National Finance Commission makes it clear that negotiations between the centre and the provinces over tax resource distribution will not be smooth.

The new TORs for the commission signal Islamabad’s intent to reclaim the fiscal space ceded to the provinces under the seventh NFC award 15 years ago. The move will be viewed by the provinces as the erosion of their hard-won financial autonomy, and a pushback is inevitable. The new deliverables expect the provinces to shoulder the costs of large development projects, contribute towards federal expenses in the aftermath of natural disasters and finance federal schemes with a provincial impact.


The centre is also considering firm allocations from the divisible pool for ICT, AJK and GB, which are its responsibility. If agreed, this would effectively allow it to bypass the need to amend the Constitution’s Article 160(3A), which safeguards the provincial share of 57.5pc, to boost its own share. Transfers to the provinces under the award rise to about 59pc if special allocations for KP, Balochistan and Sindh are included.

The new commission has been constituted at a time when the chorus for rebalancing the resource distribution formula under the seventh award is getting louder, with the establishment, finance ministry and IMF supporting a considerable raise in the federal share.

With discussions under the defunct ninth and 10th commissions having collapsed, Islamabad has significantly reversed the balance in its favour by imposing a petroleum development levy and securing cash balances from the provinces in recent years. The provinces did not actively oppose these steps but are not in the mood to give up their share under the award.

There are reasons for the centre’s frustration with the present resource distribution arrangement. Not only does it bear the cost of debt payments, defence and trans-provincial infrastructure, the provinces expect it to help them during natural disasters and finance social protection. Its depleted purse cannot foot the bill. Provinces, on the other hand, resent the centre’s attempts to shift its inefficiencies — ranging from a bloated bureaucracy to fiscal mismanagement — to them, thus undoing their financial autonomy.

The solution to the centre’s financial woes does not lie in reclaiming a greater share of resources but raising the tax-to-GDP ratio to increase the size of the pie, and halting wasteful expenditure. That said, the provinces also need to transfer fiscal resources to the local governments and increase their tax revenues.

The discussions for a new award should not end in a showdown between the centre and the provinces. It should be used as an opportunity to find a solution to Pakistan’s myriad economic and fiscal challenges.
Published in Dawn, August 24th, 2025

Full disclosure TRANSPARENCY and financial propriety of public servants and lawmakers are essential for a healthy democracy. These requirements are all the more necessary in a developing democracy such as ours, where government servants and elected representatives have in the past been linked to financial impropriety. Therefore, attempts to amend the Elections Act to make full disclosure more difficult need to be reconsidered. The proposed amendments to Section 138 of the Act recently came under discussion in the National Assembly’s Standing Committee on Parliamentary Affairs. The changes to the law have been proposed by two PPP members, while MNAs belonging to the PML-N and PTI have argued that the law should not be tinkered with. Currently, members of the NA, Senate and provincial assemblies must file yearly statements of their assets and liabilities, while as per Section 138 these details are to be published by the ECP. The PPP’s proposed changes call for a “balance between public interest for good governance and an individual’s privacy and security”, and the extent of the details to be made public will be determined by the Speaker of the respective assembly, or the Senate chairman.

Experts say that if the proposed amendments were to become law, it would have negative implications for Pakistan’s democratic evolution, and would reverse the gains made to ensure open governance. Those who join public service and electoral politics must be ready to face scrutiny of their financial dealings. Those uncomfortable with attention to their financial details are welcome to remain private citizens. Transparent disclosure of assets and liabilities is essential to prevent conflict of interest, financial corruption and other unethical practices. The current law is sufficient, and the proposed amendments are not required. After all, our chequered political history contains many incidents where public servants have been involved in financial irregularities. To promote a culture of financial propriety and ethical leadership, all public servants, including members of the civilian and military bureaucracies, must be transparent about their assets. Elected representatives should be leading by example, instead of trying to keep their financial dealings secret. The examples of how established democracies have promoted greater transparency and ethical behaviour in public service need to be studied by our institutions. Public office is a trust, and officials need to be answerable to the taxpayer and voter.

Published in Dawn, August 24th, 2025

Shared future AT a time when significant geopolitical shifts are affecting ties between nations, it is reassuring that China has expressed its desire to stand by Pakistan, and further develop their deep, multifaceted relationship.

Chinese Foreign Minister Wang Yi’s recent visit, under the umbrella of the Pakistan-China Strategic Dialogue, reiterated Beijing’s commitment to improving bilateral ties. Mr Wang had earlier travelled to India and Afghanistan, stating that the South Asian states are China’s “natural partners”.


It is significant that China’s top diplomat emphasised that Islamabad was the “most important stop” on the three-nation tour. During his meeting with Pakistan’s top civil and military leaders, Wang Yi principally discussed economic and security issues, while observing that Pakistan and China have a “shared future”.

The message from China seems clear: Beijing does not want antagonistic relationships with any of its South Asian neighbours, and values a cooperative approach to addressing disputes. For example, Mr Wang reassured his Indian hosts that Beijing is committed to improving ties with New Delhi “despite setbacks”. He also told the Taliban-led Afghan regime that it needed to act against terrorist groups, while offering greater economic cooperation, including expanding CPEC to Afghanistan. Islamabad, too, was part of the discussions in Kabul, under the framework of the trilateral Pakistan-Afghanistan-China dialogue.

With the US displaying unpredictable behaviour under President Donald Trump’s watch, states around the world are hedging their bets, and updating their foreign policies accordingly. Perhaps this is one of the factors prompting India to improve ties with China, as New Delhi’s relations with the US experience turbulence. Regardless of external triggers, an integrated, prosperous and peaceful South Asia is desirable for all, and China could be the main catalyst that brings the region’s states closer.

As for bilateral relations, ties between Islamabad and Beijing — covering geopolitics, economics and defence links — should be deepened. China is a time-tested partner and friend of Pakistan, and has stood by it in difficult times, while China has also acknowledged that Pakistan has supported it “at key junctures”.

Irritants in the way of greater cooperation must be addressed. For example, Wang Yi publicly noted in Islamabad that Beijing expects Pakistan to protect Chinese citizens and projects in this country. Terrorist groups and hostile actors cannot be allowed to damage bilateral ties by harming Chinese interests in Pakistan.

Also, some states, such as the US, have said openly that they do not view Pakistan-China collaboration positively. This presents a diplomatic quandary for Pakistan, especially in light of its improving ties with the US. Islamabad must balance its ties with both states; better relations with America should not come at the cost of economic and defence cooperation with China.

Published in Dawn, August 23rd, 2025