During recent economic discussions about Pakistan the Pakistan Tehreek-e-Insaf (PTI) criticised the PDM government because of its IMF interactions and the unstable state of the economy. The analysis of PTI’s points needs further detailed investigation alongside a complete evaluation of Pakistan’s financial stability alongside its future reform plans. The white paper from PTI did not provide relevant historical or situational background information. The party demonstrated negligence towards both international economic conditions and commodity market cycles in addition to Russia-Ukraine conflict effects and national disaster phenomena in Pakistan.
PTI asserts that PDM government stabilization attempts fail to stand out when considering the 14 IMF stabilization programs which took place since 1988. Stabilization programs under the IMF function as short-term solutions according to this view which does not consider structural improvements. The current PDM government is conducting distinct reforms but this perspective fails to recognize these changes. The present government deviates from earlier austerity cycles since it pursues fundamental structural reforms which fix performance issues across vital sectors. The energy sector requires reorganisation while tax base expansion and Federal Board of Revenue (FBR) digitisation along with anti-corruption measures form the central focuses of reform. The initiative seeks to eliminate the recurring economic pattern of growth followed by recession which has affected Pakistan for many decades. Creating sustainable growth requires the stabilization phase yet it will require time before its effects become apparent. To minimize the importance of economic system advances people often claim that adaptations are unexceptional.
According to PTI the PDM government’s policies have reduced 18 million Pakistanis to poverty levels because of their tax policies and subsidy reductions. This statement demonstrates validity due to the economic stabilization requirements but fails to capture the entire picture. Economic reforms of subsidies became essential for Pakistan to resolve its growing fiscal instability. The government-maintained energy price hikes as part of the economic policies first introduced by PTI under the IMF agreement. The PDM government took steps to enhance social safety programs by raising Benazir Income Support Program (BISP) funding by 25% in the upcoming financial year. The combination of post-pandemic inflation together with the Ukraine war has significantly contributed to poverty levels reaching millions worldwide. The PDM government should not bear full responsibility for the rising poverty levels because external economic pressures and numerous policy continuations from the previous administration exist.
The economic situation faces the “weakest growth on record” according to PTI because the overall industry contracted by 1.03% and Large Scale Manufacturing (LSM) decreased by 3.8% presents an overgeneralized picture. The industrial sector has faced difficulties but global economic conditions including high commodity prices and disrupted supply chains and tight financial conditions primarily affect emerging markets such as Pakistan. Energy price adjustments under the IMF deal (originating during PTI’s term) became essential to control circular debt which reached Rs 2.6 trillion by 2022 because Pakistan’s industry depends heavily on energy consumption. The PDM government introduced the Special Investment Facilitation Council (SIFC) to attract foreign partnerships in agriculture mining IT in order to support recovery of the industrial sector. Progress signs indicate industrial recovery has started but it remains slow-paced and the sole responsibility for this decline cannot be placed on the current government.
The White paper of PTI explains that PDM government fiscal adjustments burden the poor by raising indirect taxes and electricity rates. The tax-to-GDP ratio needs upward adjustment to fulfill debt repayment along with development funding yet we need to analyze this change within its complete setting. Although indirect taxes inherently harm the poor the PDM government took steps to implement progressive measures that fight inequality. The PDM government has enacted new taxation policies which raise income taxes for rich citizens and levy extra taxes on bank profits. The PDM government boosted its non-interest budget expenditures by 32% to support vital programs such as climate resilience and healthcare and education services which PTI had neglected. The painful electricity rate increase serves two essential purposes: it enables the power sector to recover its costs and prevents total system failure in the energy network.
The Rs 1.37 trillion “waste” label applied to salaries, pensions and “special initiatives” by PTI overlooks essential public sector maintenance and talent retention requirements. The stagnant civil servant and military personnel pay required immediate attention to stop experienced workers from leaving and maintain proper public sector operations. Pension reforms are actively progressing toward establishing a contributory system because it will generate major financial savings throughout the next period. As part of its “special initiatives” program the Punjab administration puts money into local infrastructure development in areas neglected in the past while striving to build up areas that have received little growth. The populist housing scheme of PTI known as Naya Pakistan Housing failed to deliver sustainable housing solutions while remaining opaque to its beneficiaries. The interpretation of “wasteful expenditures” becomes deceptive when considering the wide range of reforms currently initiated by the government.
According to PTI the decrease in inflation stems from economic contraction instead of being an achievement of policy implementations. Recent months have witnessed reduced inflation levels primarily because of tighter monetary policies as well as enhanced supply chains and stabilized rupee values. The worldwide decline in oil prices has substantially contributed to lowering inflation rates. The State Bank has achieved currency stabilization and inflation control through the reforms of previous governments which granted it operational independence. Price stability emerged as a collective problem that affected all governments rather than a failure of PTI’s rule from 2018 to 2022 because inflation rose to 13%. While PDM government policies have contributed to reducing inflation, they did not solely create this outcome since broader structural reforms have proven effective in establishing this positive result.
The PTI accuses the PDM government of neglecting essential structural reforms that may lead to greater economic recession. This claim is simply inaccurate. During its tenure the PDM government executed essential changes which included:
- The government has launched reforms for the energy sector through debt elimination measures and tariff adjustments.
- The Pakistan Sovereign Wealth Fund Act serves as a governance reform because it aims to privatize state-owned enterprises (SOEs) that suffer financial losses.
- The debt management strategy has secured bilateral partner rollovers and helped establish the IMF’s Climate Resilience Fund through its initiatives.
The lack of economic reform implementation by PTI’s government during its time in power resulted in the present fiscal crisis. The PDM government confronts economic difficulties directly by implementing fundamental reforms which prove to be necessary yet distressing for Pakistan’s economic recovery. Relabelling this transformation as an unproductive cycle of previous economic patterns undermines essential changes in Pakistan’s economic base.
The Author, Muhammad Wasama Khalid is pursuing a Bachelor's degree in International Relations at the National Defense University (NDU). He has a profound interest in history, politics, and current affairs.
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