Political Challenges Affecting Economy

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Political Challenges Affecting Economy

  • Frequent Government Changes → unstable economic policies.
  • Civil-Military Relations → military’s influence on economic priorities (e.g., defense vs. development spending).
  • Corruption & Weak Institutions → inefficient resource management.
  • Federal-Provincial Tensions → disputes over NFC Award, water distribution, and natural resources.

Current Issues (2025 Context)

  • High inflation and rupee depreciation.
  • Energy shortages and circular debt in the power sector.
  • Rising external debt → IMF dependency.
  • Youth bulge and unemployment.
  • Political instability affecting investor confidence.

Future Prospects

  • Strengthening institutions for transparency and accountability.
  • Broadening the tax base to reduce dependency on loans.
  • Diversifying exports beyond textiles (IT, agriculture, minerals).
  • Investment in education, human capital, and digital economy.
  • Regional cooperation (with China, Central Asia, Middle East).

Conclusion

  • The political economy of Pakistan shows that economic performance cannot be separated from political stability and governance.
  • Reforms often fail due to political interests, elite capture, and institutional weaknesses.
  • For sustainable growth, Pakistan must align its political will with long-term economic reforms.

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