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Pakistan’s Path to a Trillion-Dollar Economy

4 minutes read

Pakistan’s Path to a Trillion-Dollar Economy

4 minutes read

According to World Bank Vice President for South Asia Martin Raiser, Pakistan has the potential to become a trillion-dollar economy by 2035. Achieving this ambitious goal requires an annual growth rate of 7%, which, while challenging, is feasible with the right reforms. Raiser emphasized the importance of implementing Pakistan’s domestic economic recovery plan, focusing on structural reforms and policies to attract foreign investment, boost trade, and improve fiscal discipline.

As part of its support, the World Bank has pledged an indicative $20 billion over the next decade under the Country Partnership Framework. This program targets key sectors, including clean energy, climate resilience, agriculture, water management, and digital infrastructure. However, the funding is conditional, based on Pakistan’s economic capacity, reform implementation, and repayment ability. Raiser highlighted that these reforms are essential for expanding fiscal space and encouraging private investment, both critical to driving sustainable growth.

Raiser noted that the World Bank consulted widely with political parties and civil society in Pakistan to ensure consensus on its economic strategy. The consultations aim to align reforms with the broader political and social framework, ensuring their feasibility and public acceptance.

Pakistan’s economy has been under strain for years, facing a persistent fiscal deficit, external imbalances, and insufficient foreign reserves. Currently, the country is implementing measures under a $7 billion IMF bailout program. These efforts include boosting revenue collection and improving external financing, which largely relies on loans from partners like China and Gulf nations.

Raiser stressed the need for Pakistan to focus on factors within its control to attract investment and improve economic competitiveness. Sectors like energy and water management, digital infrastructure, and agriculture present opportunities to drive growth and create jobs. By prioritizing these areas and addressing structural inefficiencies, Pakistan can lay the groundwork for long-term economic stability.

The World Bank’s $20 billion funding, combined with ongoing IMF support, offers Pakistan a chance to navigate its economic challenges. With proper reforms, the country can transition from its current fiscal struggles to a more resilient economy capable of attracting investments and generating employment. This funding also comes at a crucial time when Pakistan faces the additional burden of addressing climate change impacts, making investments in clean energy and climate resilience even more urgent.

In the coming decade, Pakistan’s success will depend on its ability to mobilize resources effectively, implement necessary reforms, and foster a stable environment for domestic and international investors. If these steps are taken, the vision of a trillion-dollar economy by 2035 could become a reality.

 

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