The World Bank’s recent assessment of economy splatters a grim picture. Growth is expected to remain anemic, hovering below 3% for the next two years. This stagnation is not an amazement; it’s the culmination of unaddressed “policy constraints to sustainable economic growth.” The bank’s stark warning is a call to action, urging Pakistan to embark on a path of bold structural reforms before it’s too late. The message is clear: Pakistan’s current economic model is broken. Debt burdens are crippling, progress on poverty reduction is reversing, and the benefits of any growth are concentrated amongst a select few. This unsustainable trajectory has dire consequences. The country stands at a precipice a choice between economic devastation and decisive action.

The time for vagueness is over. Newly elected current government needs to understand that boosting productivity and exports can only succeed within a framework of clear economic direction and deep structural reforms. Current situation demands and entails to reduce budget deficits and reigning in unnecessary spending are crucial for long term financial stability. Need to focus on tax reforms because a broader tax base with efficient collection mechanisms is essential to generate sustainable revenue. Government needs to take measures to work on restructuring of State Owned Enterprise (SOE); restructuring or privatizing loss making SOEs will free up resources and improve efficiency. Necessity of the hour is to streamline regulations for investment, combating corruption, and improving infrastructure will attract much-needed domestic and foreign investment. And above everything Investing in education and healthcare and Human Capital Development empowers the workforce and fosters long-term economic growth. Implementation of these reforms requires political will and a shift in mindset. The government must prioritize long term economic strength over short term gains for a select few. Transparency and accountability are essential to maintaining public trust and ensuring the reforms are implemented effectively.

Naji Benhassine, World Bank’s country director for Pakistan offers a glimmer of hope. He envisions this crisis as a potential Pakistan moment, a turning point where the nation, like many others before it, embraces bold reforms to right the ship. The path forward is clear: broad-based, sustainable reforms are the only way out. But this is not the first time the alarm bells have rung. Global lenders, international financial institutions (IFIs), and credit rating agencies have consistently warned of the existential threat posed by Pakistan’s external and fiscal imbalances. Their anxieties are well-founded. A history of profligate policies and a tendency to backslide from reform efforts once external pressures ease raise serious concerns about long-term commitment. The government’s repeated pledges for sustainable revival haven’t translated into concrete action. While privatizing a loss-making entity like PIA is a step in the right direction, it falls far short of a comprehensive strategy. The lack of a well-defined policy direction is a major red flag for creditors and investors.