ISLAMABAD: Pakistan needs to implement comprehensive economic reforms to reduce its ongoing dependence on foreign loans, according to Sardar Masood Khan, former ambassador and ex-president of Azad Jammu and Kashmir. Khan emphasized the necessity for the country to strengthen domestic resource generation and create an investor-friendly environment that would eventually lead to a self-reliant economy.
According to President of Azad Jammu and Kashmir, Sardar Masood Khan, Saudi Arabia’s recent rollover of its $3 billion deposit was an important support for Pakistan’s foreign exchange reserves. However, he warned that continual reliance on financial assistance from friendly nations could expose Pakistan to vulnerabilities, as even the most supportive allies might eventually tire of extending aid repeatedly.
Khan underscored Pakistan’s significant potential due to its large population, fertile land, skilled human resources, and strategic geographical location. He highlighted the Makkah Alliance, proposing that a partnership involving Saudi Arabia’s financial power, Türkiye’s defense production, and Pakistan’s defense capabilities could enhance regional peace and security while fostering economic opportunities for Pakistan.
Discussing foreign investment, Khan pointed out that memoranda of understanding alone were insufficient, as they required subsequent legal and financial agreements to be effective. He mentioned potential investment areas such as critical minerals, the China-Pakistan Economic Corridor (CPEC 2.0), agriculture, renewable energy, and industry, urging for quicker conversion of investment commitments into tangible projects.
Khan identified several barriers to foreign direct investment, such as insufficient intellectual property protection, business operation difficulties, bureaucratic challenges, and a problematic taxation system. He stressed the importance of facilitating investment by overseas Pakistanis, who often face administrative hurdles, and advocated for broadening the tax base and integrating the informal economy into the formal tax framework to boost domestic revenue.
Moreover, Khan addressed issues affecting Pakistan’s competitiveness, including high production costs, taxation, and electricity prices. He called for reforms to eliminate rent-seeking and subsidy-related distortions while promoting entrepreneurship and private-sector investment.
Highlighting opportunities in agriculture and emerging technologies, Khan noted the positive impact of digital transformation, technology startups, and expanding human capital, urging support for these developments through a coherent economic strategy.
He referenced a 2019 World Bank report projecting that Pakistan could become the tenth-largest economy by 2047 in terms of nominal GDP. Achieving this goal, he asserted, would require consistent reforms, diligent efforts, stronger institutions, and a decisive movement towards economic self-reliance.