PAKISTAN’S economic debate is trapped in a distracting quarrel — whether banks lend too much to government and too little to enterprise. Allocation matters, but it is not the binding constraint. On the State Bank’s consolidated estimates, with the share of development spending shrinking, a rupee of government spending now multiplies about 0.71 in output on average while a rupee of private investment returns 1.2 to 1.3. The private rupee works nearly twice as hard yet, strip out productivity — ie, the efficiency with which inputs become output — and even that collapses towards 1.0. Adjusted for our stalled productivity, no rupee in Pakistan truly compounds. We accumulate without amplifying.

The distinction is decisive. A rupee invested where productivity is rising earns more each year as workers learn and firms innovate; a rupee in a stagnant system merely buys more of the same. Pakistan’s productivity sits near 0.28 on comparable estimates, against India’s 0.48 and Sri Lanka’s 0.42, and the export scoreboard confirms it: Vietnam now ships over $400 billion in merchandise, more than 10 times ours, and Bangladesh’s garments alone exceed our total exports. These economies did not merely mobilise capital; they made it productive. That must be our organising principle — every reform tested against the question of whether it raises output per worker, per acre, per unit of energy, per rupee of credit. Against this backdrop, the following reforms are........

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