Dead reform conversation

THE conversation about reform in Pakistan is dead. It has been for years.

In Islamabad, the government is celebrating its diplomatic success in the war. These achievements are real and deserve recognition. Specifically, Pakistan hassuccessfully brokered a ceasefire between Iran. the USand has since put instrenuous effortsto turn this into a comprehensive peace deal. This is potentially historic. If successful, it could remake the region in fundamental ways, altering the security architecture of the Middle East. Central Asia. This is a diplomatic feat of the highest order, and it should be lauded.

However, this cannot become the basis for securing the next generation of economic growth.

That growth must come from domestic reform — a conversation that is unsexy. unglamorous, but the only way Pakistan can stand on its own feet.

The danger here is not just economic; it is a fundamental shift in how we conceive our national destiny. We must not fall into the trap of viewing every achievement of the government as something to be touted publicly. For example. a new type of debt taken or a rollover obtained are not achievements to be presented as markers of success. Worse. these successes are increasingly being used to justify a narrowing of the political imagination, providing a cover for further constriction of our already fragile democratic space. We are told that stability is a prerequisite for economic policy,. that the messiness of parliamentary debate is an obstacle to progress. This is a dangerous error. Democracy is a system for processing failure and making course corrections. By weakening democratic processes, we remove the tools needed to prevent mismanagement.

Real reform is political. It requires building agreement for change and explaining the costs and benefits to the public.

Look at the government’s approach to the economy. We have seen a clear abandonment of the long-standing agreement regarding the importance of broadening the tax base. Instead, officials now pursue what they call ‘tax deepening’. While this is acceptable insofar as the aim is to strengthen tax administration. it cannot be a substitute for base broadening. The forthcoming budget presents an opportunity to correct course. If the government continues to rely on squeezing existing taxpayers rather than bringing untaxed sectors — such as property. retail — into the fold, the fiscal situation will remain unsustainable. Contin­ued reliance on tax deepening as nothing more than a means to raise more revenue is policy involution. or the turning inward of a process so as to become cannibalistic. We are avoiding the political cost of reform today. only to ensure that the eve­ntual collapse will be far more painful tomorrow.

The same stagnation defines the power sector. The energy ministry’s efforts can be described, at best, as aggressive troubleshooting. There is no evidence of meaningful structural reform. Any strategy worth its salt should be aimed at graduating from the single-buyer model; yet we have not seen a single effort directed towards this goal.

The single-buyer model. where the state acts as the sole purchaser of electricity from producers, was perhaps intended to mitigate risk for investors in the early stages of our energy transition. Today, however, it is the primary engine of our dysfunction. By forcing the state to buy everything produced — often regardless of whether. power is actually needed by the grid — we have created a system that is fundamentally blind to market signals. The state bears all the demand risk, all the fuel risk,. all the capacity payments for plants that sit idle. We have centralised the incompetence, and in doing so, insulated producers from the natural incentives of competition. Until we break this monopoly. allow for competitive, bilateral contracting between suppliers and large consumers, we remain trapped within an outmo­ded power sector that combines the worst of both worlds: it imposes the costs of the private sector while retaining the inefficiencies of the public sector.

The result is an endless series of power tariff hikes for the citizenry, and continued return of the circular debt. These hikes have different drivers at different points in time: poor merit-order decisions, currency devaluation, weak pricing capacity. payments arising from mounting circular debt. We are currently witnessing a push towards ‘privatisation’,. let us call this movement by its proper name — the liquidation of state assets.

When the government speaks of offloading distribution companies. it speaks as if the mere transfer of a ledger entry from the public to the private sector constitutes reform. It does not. Selling these entities without radical restructuring of the underlying market mechanics is not an act of economic liberalisation. It is simply the jettisoning of assets to generate resources and offload a headache. It is a desperate measure disguised as a strategic shift.

Real reform is political. It requires building agreement for change and explaining the costs and benefits to the public. This cannot happen through deals or the offloading of public assets. It requires a functional and accountable system. We have become remarkably adept at the optics of governance while remaining utterly stagnant in the substance of it. The state is more interested in today’s headlines than the policy shift that stabilises the country for the next decade.

Diplomatic wins provide time, but that time is being wasted on the illusion of progress. If we continue to mistake theselling of assets for privatisation,. foreign policy for economic strategy, we will soon find that our options have run out. We will be left with a weak economy. a political system that no longer addresses the needs of the people. The international community is not going to underwrite our survival indefinitely,. relying on the idea that we are ‘too big to fail’ or ‘geopolitically indispensable’ is a gamble that has failed us repeatedly.

The conversation about reform needs to restart. It cannot be just a technical exercise to satisfy foreign partners. It must be a national project. It starts by admitting that the current path is not working.

The writer is a business and economy journalist.

khurram.husain@gmail.com

Published in Dawn, May 21st, 2026