The $60 Billion Mirage: How Pakistan’s Financial Architecture Chokes Its Own Export Dream |
Yesterday, a federal minister presented an ambitious vision for Pakistan’s economy, aiming for exports to rise beyond $60 billion by 2036. For a country that has been permanently struggling with balance-of-payments crises, IMF bailouts, and currency instability, it was the kind of headline that policymakers and the public alike wanted to hear. Export growth is not optional for Pakistan—it is existential.
Yet almost simultaneously, new data from the State Bank of Pakistan (SBP) revealed a reality that quietly undermines this promise. The figures exposed not merely short-term weakness, but a structural contradiction so severe that it renders such targets largely symbolic. The problem is not just weak factories or high power prices. It is the architecture of Pakistan’s financial system itself.
The obstacles to exports are well rehearsed and overly debated: some of the highest electricity tariffs in the region, volatile fuel costs, poor logistics, regulatory uncertainty, and persistent security risks. These factors certainly matter. But they are symptoms, not the disease. Beneath them lies a deeper constraint—the way Pakistan’s state has come to dominate its own financial system.
As of the latest SBP data, the federal government’s net borrowing from the banking sector has reached roughly Rs 37.16 trillion. To grasp the magnitude of this number, consider that it exceeds the entire deposit base of the country’s commercial banking system, which stands at about Rs 30.66 trillion. In practical terms, for every rupee deposited by Pakistani citizens, the government has absorbed more than a rupee through borrowing.
This is not ordinary “crowding out.” It is a fiscal occupation.
Now compare this........