ISLAMABAD (05 November 2026): Dr Mahir Binici, the Resident Representative of International Monetary Fund (IMF) in Pakistan, has called upon Pakistan to move beyond macroeconomic stabilization and undertake deeper structural reforms, including provincial tax mobilization, governance improvements, energy sector restructuring and reduction in business costs.
He was speaking at the closing plenary, titled: “Where Reforms Matter the Most for Growth” organized on the concluding ceremony of 29th Sustainable Development Conference by the Sustainable Development Policy Institute (SDPI) here on Thursday.
The IMF representative stressed that Pakistan needed to translate macroeconomic stability into higher investment, productivity and exports.
Dr Mahir Binici said the country had already undertaken the difficult task of restoring macroeconomic stability, but sustaining these gains required well-sequenced and consistent structural reforms.
He identified five key reform priorities: preserving macroeconomic stability, improving resource allocation, reducing the cost of doing business, developing a growth-friendly fiscal system and strengthening governance.
Binici said emerging and developing economies such as Pakistan needed to mobilise revenues equivalent to at least 15 percent of GDP to build a strong state capable of delivering essential public services. Pakistan, however, remained considerably below this threshold.
He emphasized that revenue mobilization should not remain confined to federal taxation, urging provincial governments to expand their own revenue bases through harmonization of General Sales Tax (GST) on services, agricultural income taxation and property taxation.
He said improving the allocation of public resources was equally important, with greater spending directed towards high-return infrastructure, healthcare, education and targeted social protection rather than inefficient and preferential activities.
Citing the IMF’s research, he identified governance, national tariff policy and improvements in the business environment as three major areas where Pakistan could unlock significant
growth potential. He said high energy costs, taxation and multiple layers of taxes were discouraging businesses from retaining existing investments, undertaking new projects and attracting foreign direct investment (FDI).
Former federal minister, Syed Naveed Qamar, warned that consumers were increasingly abandoning the country’s inefficient power system through solarization and other alternatives.
Mr Qamar offered a sharper assessment of the power sector, saying Pakistanis had started “voting with their pockets” by moving away from the conventional electricity system, particularly through solarization. He said policymakers were attempting to preserve an archaic and inefficient system by shifting its financial burden onto other consumers instead of addressing its structural weaknesses.
Qamar argued that the growing adoption of solar energy was not merely the outcome of technological improvements but also reflected consumers’ frustration with the existing power sector. “People are simply walking away from this system. You’re trying to save an archaic and inefficient system by loading it on others,” he said, calling for urgent deregulation and competition.
He cited the shifting of industrial consumers from gas to electricity as an example of flawed policymaking, saying industries had not moved to the national grid as anticipated.
“People didn’t switch to the grid. All we did was take away all the paying customers of the gas companies and give them a whole bunch of unpaying customers,” he observed.
As a result, he said, circular debt had effectively been transferred from the power sector to the gas sector without resolving the underlying inefficiencies.
Qamar argued that deregulation and market competition could deliver quicker results than privatization alone, which he described as a lengthy and painful process. “For God’s sake, deregulate,” he urged, calling for more companies to be allowed to enter the power market and compete.
He also warned that Pakistan could face renewed economic instability after the existing IMF programme concludes in September 2027 unless the government begins preparing a transition towards sustainable, growth-oriented policies.
He said only around 18 months would separate the expected completion of the programme from the next general elections, creating the risk of increased public spending and reversal of economic discipline ahead of the electoral cycle.
Qamar cautioned that delaying the transition towards growth could result in a disorderly adjustment after the IMF programme, urging the government to use the remaining programme period to establish the necessary institutional and policy framework.
He also called for a fundamental overhaul of the education system, saying policymakers had focused excessively on enrolment figures and the number of out-of-school children while neglecting learning outcomes, practical skills and productivity.
He said the existing curriculum remained rooted in an outdated model designed primarily to produce clerical workers rather than a skilled and productive workforce.
Asian Development Bank (ADB) Country Director in Pakistan Dr Emma Xiaoqin Fan said consistent implementation of reforms, macroeconomic stability and private-sector-led growth were essential to break the country’s recurring boom-and-bust cycle.
She said Pakistan had experienced repeated economic expansions and crises since the 1990s without achieving significant improvements in per capita income, poverty reduction and people’s well-being.
Fan said the government needed to clearly define the respective roles of the public and private sectors, arguing that economic growth could not be generated merely through higher government expenditure.
“The business of the government is not business,” she said, stressing that the government’s responsibility was to create an enabling environment, ensure stability and act as a catalyst for private investment.
She cited the privatization of Pakistan International Airlines (PIA) as an example, saying a single transaction could not transform the economy and that consistent progress across the broader reform agenda was required.
Fan also called for civil service reforms to improve accountability, reduce unnecessary procedures and paperwork and establish a more service-oriented approach within government institutions. She cautioned that reforms inevitably involved short-term political and economic adjustment costs, requiring governments to provide education, training and social protection to workers affected by restructuring.
Sam Waldock, Development Director at the Foreign, Commonwealth and Development Office (FCDO), British High Commission Islamabad, identified export competitiveness as the key to breaking Pakistan’s recurring growth ceiling. He said Pakistan’s economic growth
repeatedly hit a ceiling of around 3.8 percent because imports outpaced exports, triggering balance-of-payments pressures and forcing the country back to the IMF.
Waldock identified regulatory reforms, trade facilitation, trade promotion, market-oriented skills development and improved access to foreign exchange for exporters as five priorities for export-led growth. He highlighted weaknesses in export certification, documentation, branding and dependence on foreign intermediaries, saying Pakistan’s surgical instruments industry lacked laboratories certified to facilitate medical-device exports to the European Union.
Pernille Ironside, Acting UN Resident Coordinator and UNICEF Country Representative, said the success of reforms should be measured by their tangible impact on people’s lives rather than policy announcements or financial allocations.
She called for outcome-based public spending, emphasising that reforms must deliver schools where children actually learn, effective healthcare services and inclusive employment opportunities.
