IT appears that the PML-N, echoing the PPP’s recent offer, is also willing to re-engage with the opposition, at least on counterterrorism policy. Though that may seem like a narrow scope for dialogue, in our vitiated political environment, it does offer an opening. Whether the opposition is interested in taking it up is a different question.
The anger over the dismissal of the elected PTI government in KP is still far from subsiding, and the ruling coalition in Islamabad deserves much of the blame for making a negotiated settlement more difficult than it seemed two weeks ago. That said, the opposition also needs to introspect. From the murmurings of resentment within its ranks, it appears that the outcome of its last round of discussions with the government was not what many were hoping for.
Yet, its street agitation has delivered even less. An offer for dialogue, even if focused on counterterrorism strategy, is still an opportunity to return to the negotiating table and continue from where the last round of talks left off. Complete disengagement will achieve nothing.
Regrettably, the two sides still fail to see the country’s economic, security, and governance crises as challenges that must be solved politically. A nation of 260m can hardly afford such paralysis. The greater onus lies with the government. It is difficult to see how a credible counterterrorism strategy can be framed when the province on the front line of the fight has just been deprived of its elected government.
If Islamabad wants its offer to be taken seriously, it should pair it with a real gesture of good faith, starting with a meaningful voice for KP’s elected representatives in any talks. Yet the government seems consumed by the hubris of unchecked power, while the opposition, particularly the PTI, continues to act as if agitation alone can yield results.
Instead of evading Pakistan’s challenges through constant jousting and whataboutery, the political leadership needs to confront its failings. Counterterrorism, where the stakes for KP are the highest and broad-based consensus is urgently needed, is as good a place as any to begin. But it must lead to a much wider conversation on national issues. If the two sides cannot find common ground even on the fight against terrorism, the public would be justified in wondering what, if anything, they are capable of agreeing on.
IN the two days before writing this column, I had the pleasure of being immersed in a series of discussions in Islamabad on all things related to taxes in Pakistan.
Hosted by the finance ministry and the IMF, the discussions brought together senior practitioners, advisers, and stakeholders for a detailed, high-level debate on what all needs to change in Pakistan’s tax system for it to play a more enabling role in undergirding stability for the private sector and promoting growth rather than being a drag on it.
What struck me during the discussions was the large gulf between the community of experts the IFIs bring to the tax conversation and the people who legislate and oversee the making and implementation of tax policy in Pakistan. The gulf is evident in how they approach the question of tax, the priorities they bring to the table, how they measure success, and the language they use to talk about taxes.
The experts present — sadly, the content of the discussions was “off the record”, so only broad themes can be discussed here — emphasised sustained commitment, balanced compliance, and measuring outcomes, “not activity”. Special emphasis was put on the harmonisation of GST, predictability of policy, and the mutually reinforcing dynamic between various tax heads — for example, how a properly administered GST can help strengthen income tax as well. FBR representatives underlined their tax reform efforts. However, participants still pointed out that the base remains narrow, that withholding plays an outsize role — one of the charts showed how 90 per cent of withholding taxes are collected under 10 heads only — and that this role is increasing. There was broad consensus that Pakistan’s tax system remains inequitable, riddled with “distortions”, and serves more as a drag on growth and investment than as their promoter.
It is surprising how underdeveloped the template governing data disclosure on revenues is.
There is a reason why this is so. The priorities that have shaped Pakistan’s tax system over the years differ from what tax experts suggest it should serve. In Pakistan, raw revenue is the metric of success — and not efficiency, buoyancy, or the self-reinforcing elements of tax administration. Tax policy responds heavily to voice in the system. Over the years, it has evolved along the path of least resistance, so to speak, causing the bulk of the burden of generating new revenue to fall on those with no voice, or the least organised voice, in the system. Even in the section of industry that likes to highlight the quantum of its contribution to the revenue effort, it is highly probable that the bulk of the taxes are passed through to their consumer base rather than being borne by the owners and controllers of capital. Over the years, this course has led to a tax system that is highly regressive, very concentrated, barely buoyant, and heavily reliant on withholding as the basis for its collection.
As participants grappled with the vexing question of tax reform in Pakistan, I felt one modest but concrete proposal might help refocus the conversation on evidence rather than emotion. Given how central the question is to Pakistan’s economic future, it is surprising how underdeveloped the template governing data disclosure on revenues is. The monthly revenue collection data we all see reported in the newspapers is informally taken by reporters from unnamed FBR sources and is often inconsistent.
We only see revenue-collection data when the Fiscal Operations data is released every quarter, but even then it provides only headline numbers, and its release frequency is too low to be useful. One thing that is sorely needed in Pakistan is a more robust, mandatory data release template for the FBR, with monthly frequency at the very least, if not more often.
The IMF should use its access to the highest levels of government to urge that monthly data releases on revenue collection become mandatory for the FBR. The World Bank should offer its expertise to help develop this template, with uniform accounting conventions governing matters such as how to treat withheld refunds and how to break down the releases. Hence, they serve as a meaningful source for discerning the direction of the fiscal outlook during the fiscal year. The government should legislate this requirement and make any necessary modifications to FBR rules to ensure that a dedicated team is always at work within the tax authority, gathering, compiling, and preparing the next data release as per a predetermined schedule.
While we’re at it, let’s also mandate a similar release requirement on the finance ministry on expenditures. Q Block already submits a monthly statement of all expenditures to the IMF, as per the accounting treatment given by the IMF itself. It would be relatively simple to make this public. There is no good reason not to do so. And many participants at the conference did point out that the question of revenue is connected to that of expenditure.
The bad practices that characterise much of Pakistan’s tax system are a symptom of the environment in which tax policy is administered. That environment is riddled with discretionary powers whose sway in the tax bureaucracy is at the root of a lot of what ails the tax effort. The best antidote to discretionary powers is daylight, or transparency. Open a window. Let the light of day shine in the otherwise dark rooms in which the tax machinery is used to operating. Let them grow accustomed to the discipline a regular data-release template brings. Let them answer the questions that will naturally arise once the data starts to flow. And watch the tax conversation find the rails it needs to ride into the future.
THE World Bank’s Reclaiming Momentum Towards Prosperity report presents a sobering reality: poverty has climbed back to 25.3 per cent on the national line; and close to 45pc of Pakistanis fall below the bank’s new $4.20-a-day threshold.
Stabilising our way into deeper poverty has exposed the limits of conventional macroeconomic management. Speaking last week at the International Conference on Inclusive and Resilient Economic Empowerment and Growth, organised by the Pakistan Poverty Alleviation Fund in Islamabad, I put one question at the centre: how do we break this cycle?
Accelerating growth requires recognising where real growth originates. Pakistan’s largest capital investment of this decade never appeared in a Public Sector Development Programme (PSDP), Annual Development Programme (ADP), or Nationally Determined Contributions (NDC). Farmers, shopkeepers and households imported about 17 gigawatts of solar panels in 2024, and the same again in 2025. No PC-1. No donor. No climate finance unit. They used their own savings, because diesel costs and the unwinding of unsustainable energy subsidies made it rational.
The lesson for macroeconomic policy is direct. Prolonged, distorted subsidies are not a safety net. They are an obstacle to citizen-led growth. When fiscal pressure forced the state to pare them back, citizens moved faster than planners to protect their own balance sheets. The state’s response was to tax panel imports and revise net-metering terms. So when we ask how planning can accelerate growth, we should first admit that citizens are already ahead of the plan. The question is whether the state will remove the friction in their way or keep chasing donors. Three shifts would make the difference.
Unpriced risk: Macroeconomic stability cannot survive risk that no one has priced. Pakistan already has a climate budget. It is not the one captured by the recently introduced climate budget tagging. It is the one written after each disaster. Major floods now produce post-disaster needs assessments, reconstruction budgets, and emergency appeals. That is our real climate expenditure: unplanned and largely borrowed — a permanent drag on fiscal space. The fix is not more tagging of development spending. It is pricing climate risk before it arrives.
Pakistan already has a climate budget — the one written after each disaster.
In practice, this means treating climate losses as a contingent liability of each province, the way we already treat circular debt and SOE guarantees. The Fiscal Risk Statement mentions disasters but puts no number on them. Each province can estimate its average annual loss from floods, heat, and drought, and appropriate a share of it every year as an expected cost. Budget theorists call this ‘expected-value budgeting’. A loss that is budgeted becomes a decision. A loss that is not budgeted becomes a bailout, often paid through the Benazir Income Support Programme’s emergency transfers.
Maintenance first: Economic productivity depends on assets that work. That makes resilience a maintenance problem before it is a development problem. Embankments, drains, canals, and roads do not fail because nobody built them. They fail because their recurrent budgets are starved. Yet our economic conversation stays inside the development budget. The federal PSDP alone carries a throw-forward of about Rs11 trillion, and new schemes keep joining the queue, while existing assets go unmaintained. The ADP builds the embankment. The operations and maintenance line decides whether it holds. Protecting maintenance allocations for water assets would preserve existing capital and buy more resilience per rupee than most new projects.
One can see where local money is actually spent. The most local spending stream is not an SDG-linked programme. It is the parliamentarians’ development schemes: tube-wells, link roads, drains, and culverts. They are quick, uncoordinated, and climate-blind. Nobody screens them. A single check asking whether the asset will survive the next monsoon would protect more local capital than every formal climate project combined. Green growth at the local level will not come from specialised projects. It will come when ordinary public spending stops creating new fiscal liabilities.
District arithmetic: Growth targets fail when they stay abstract. The NDC is written in tonnes of carbon and gigawatts. A district plans in culverts, acres, and tube-wells. Nobody has done the translation. A union council cannot own or deliver a national target expressed in metrics it does not know.
The first mechanism is a translation layer. Each district needs a short climate investment and growth plan that converts national targets into local units: acres under laser levelling and drip irrigation, tube-wells solarised, kilometres of drains cleared. Once a target is counted in local units, a local official can be held accountable for it.
The second mechanism is money that rewards performance instead of rescuing failure. Versions of this model already work elsewhere. A district that sets up its own climate fund and meets basic public financial management standards qualifies for performance-based grants spent on investments its communities choose. Money follows institutions, not proposals. Pakistan could pilot this in 10 of its most flood-exposed districts through provincial finance commission transfers, with the grant rising as each district meets its conditions. That is local ownership with a test attached.
The third mechanism is creditworthiness. Local growth stays dependent on donor projects because no district or municipal body can borrow or issue a municipal bond. None has a balance sheet, an asset inventory, audited accounts, or a credit rating. A provincial pooled financing facility could bundle bankable projects, such as solar for water supply, municipal waste, and cold storage, and raise capital against the pool. The precondition is unglamorous: audited accounts and own-source revenue at local level. Investors do not lend to plans. They lend to entities with a record.
The fourth point is simpler. For most local investment, the bottleneck is not finance. It is permission. A solar mini-grid needs a Disco connection and a Nepra licence. A restoration project needs a land lease. A water scheme needs water rights. Locally owned investment needs a single district window for permissions before it needs another fund.
In all: price the loss before the flood. Fund maintenance before new projects. Count targets in district units. Make municipalities bankable. Citizens have already shown, panel by panel, even when they are below the poverty line, that they will finance their own resilience. The state cannot lead them, but can stop taxing their initiative and carry the risks they cannot.
THERE had been much speculation about what exactly the trilateral Makkah Joint Defence Agreement entails, other than general commitments about the collective defence of Pakistan, Saudi Arabia, and Turkiye.
But with the release of the text of the 16-article agreement, there is now some clarity about its objectives. While Article 2 says that an “externally originating armed attack” on any of the signatories will be considered an attack on all, triggering the right of self-defence under the UN Charter, the agreement is silent on offensive action.
This should settle questions about the extent of involvement of the pact allies in the ongoing Saudi-Houthi war, and any future engagement. That it is a purely defensive arrangement was also echoed by the Turkish foreign minister.
He stressed it was not an “offensive agreement”, and ruled out sending his country’s troops to a foreign theatre. Other salient features of the pact include joint defence production, intelligence sharing and the interoperability of forces. Such clarity is welcome. While the defence of Saudi Arabia is important, Pakistan, Turkiye, and other regional states should continue efforts to find a negotiated solution to the Yemen conflict — both between the Saudis and Houthis and within Yemen.
In a related development, Pakistan’s chief of defence forces was in Tehran on Tuesday to try and prevent further escalation on the war front. The message from Tehran is that the US should accept Iran’s seven-point proposal if talks are to restart. A key Iranian demand is a ceasefire on all fronts, the end of the American blockade, lifting of sanctions, and the release of the Islamic Republic’s funds. However, despite the efforts of Pakistan and others, there are troubling noises coming from Washington and Tel Aviv.
The abrasive US war secretary — who is no proponent of peace and dialogue — was recently in Israel, while the Israeli prime minister, who will be fighting for his political survival in next week’s elections, has said he and President Donald Trump need to ‘eliminate’ the “Iranian regime”.
Even the sincerest effort to bring peace to the Gulf, Yemen, and the wider Middle East will come to naught if the US and Israel continue with their provocative behaviour. A strike on Iran after the Israeli and US elections would be a massive blunder, and if there are any mature advisers left in Washington, they should talk the US president out of making any such move, besides warning Tel Aviv against such arrogant action. Iran may be under pressure, but as the past several months have shown, it has the capacity to withstand considerable pain inflicted on it by the US and Israel. Fresh aggression can kick off a firestorm that will be in no one’s control, hence it is best to abandon such reckless plans.
ISLAMABAD: Failure to address the underlying disputes that engender crises between Pakistan and India could lead to more dangerous confrontations in the future, a former chairman of the Joint Chiefs of Staff Committee warned on Wednesday.
“Terminating a crisis without addressing its root causes only sets the stage for the next, more dangerous conflict,” retired Gen Zubair Mahmood Hayat said at the concluding session of the second Islamabad Non-Proliferation Conference, organised by the Strategic Vision Institute (SVI).
Ex-CJCSC warns against ignoring Kashmir dispute, Indus treaty suspension
He said that in the subcontinent, the core issue of Jammu and Kashmir could not be wished away or reduced to an administrative matter. “Similarly, water cannot be converted from a shared necessity into an instrument of power and pressure,” he said while stressing the need for resolution of the Kashmir dispute and restoration of the Indus Waters Treaty.
Gen Hayat warned that repeated crises between the nuclear-armed neighbours could become increasingly dangerous if unresolved disputes, diminishing restraint and the absence of sustained political dialogue continued to undermine regional security.
Referring to the May 2025 conflict, he said Pakistan had demonstrated its military capabilities and political control through a calibrated response that denied India a unilateral fait accompli without pursuing an unlimited war.
“The larger lesson is not that conflict between two nuclear-armed neighbours can be made routine; it is that there is no tested and certified safe space for war,” he said, warning that future crises would involve different leaders, emerging technologies and shorter decision-making timelines, heightening the risk of miscalculation.
He said South Asia lacked an inclusive regional security framework, effective crisis-management mechanisms and sustained political dialogue. “The region lives between deterrence that prevents the worst and disputes that repeatedly regenerate danger,” he said.
Gen Hayat warned unverified allegations could trigger conflict before the facts were established, with a future confrontation potentially arising from an accident rather than a deliberate state decision. He cited the continuing Operation Sindoor in this context.
ISLAMABAD: Pakistan’s laws aimed at protecting journalists from threats and attacks risk remaining largely “on paper” unless the federal and provincial safety commissions are given more powers, accessible complaint mechanisms and the resources needed to deliver timely protection, says a new report released by Freedom Network, a media watchdog, on Wednesday.
The report, titled “From safety on paper to safety in practice”, is an assessment of the work carried out by two commissions — one appointed by the federal government and the other by the Sindh government.
The Islamabad-based Freedom Network produced the research with assistance from the International Media Support (IMS).
Authored by Minahil Shahab and Adnan Rehmat, the report examined the commissions’ capacity and operational constraints through consultations with stakeholders, interviews and a baseline online survey of around 40 working journalists in Sindh, including respondents from the province’s rural areas.
According to report, 65pc of respondents say they have faced work-related threats or interference
According to the report, parliament enacted two special laws to combat impunity for crimes against journalists and the media in 2022. Both the federal and Sindh governments instituted commissions to enforce the laws.
The online survey found 70 per cent of the respondents knew a provincial protection law existed, but 65pc of them did not know where to find the commission’s office, obtain information, website or complaint route.
Sixty-five per cent of the respondents reported experiencing work-related threats or interference since 2021. These findings describe the surveyed group rather than establishing province-wide prevalence.
Challenges pinpointed
The assessment identified distinct institutional challenges. Kamal Uddin Tipu, the federal commission’s chairperson, spoke of staffing, budget, and administrative constraints during the research.
With the federal commission now operational, the priority is to ensure that its personnel, resources and complaint systems support timely protection and sustained follow-up.
In Sindh, the report documented an established institution with premises, meetings, complaints and engagement with police and media organisations. However, union representatives and non-official members described delayed responses, limited outreach beyond Karachi and dependence on police replies.
The Sindh commission’s chairperson, Aijaz Ahmed Memon, disputed suggestions that journalists lacked trust in the institution and reported improvements in coordination, case activity and outreach plans.
The report also highlighted media employers’ responsibilities. Fifty-one per cent of the respondents said employers had not informed them about safety procedures, emergency contacts, insurance, legal assistance or complaint mechanisms.
The Sindh chairperson separately reported that 44 media outlets had not replied to the commission’s queries. Recommendations include confidential and accessible complaint routes, urgent risk assessment, designated caseworkers, police escalation procedures, stronger employer cooperation and publication of anonymised outcomes and spending.
The report said amendments needed to be framed carefully in order to address documented legal barriers.
The Freedom Network called for coordinated action by governments, commissions, police, media employers and journalist organisations to deliver positive results and ensure that journalists can obtain effective assistance when threats arise.
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