Pakistan eyes productivity-led path to $1tr economy

August 28, 2026 (MLN): Pakistan needs to translate its hard-won macroeconomic stability into sustained economic growth driven by higher productivity, exports, investment and employment, Federal Minister for Planning, Development and Special Initiatives Professor Ahsan Iqbal said on Friday.

He stressed that the country must move beyond the recurring cycle of economic expansion, external account pressures, stabilization and subsequent slowdown by restructuring the economy around productivity and export-led growth, according to APP.

“Stabilization is necessary, but stabilization alone is not development. Pakistan cannot austerity its way to prosperity. We have to earn our prosperity through productivity, innovation, investment and exports,” he said.

The minister said Pakistan should be assessed not only through the challenges it faces but also through its considerable economic potential, citing its population of nearly 260 million, large youth cohort, strategic geographic location, agricultural and mineral resources, growing digital economy and global diaspora.

He outlined the government’s national transformation framework, URAAN Pakistan, which is based on five key pillars: Exports, Enterprise and Employment; E-Pakistan and the digital economy; Environment, Climate Change, Food and Water Security; Energy and Infrastructure; and Equity, Ethics and Empowerment.

Pakistan has set an ambition of becoming a $1tr economy by 2035, although the objective extends beyond reaching a numerical GDP target, he said.

“The real question is what Pakistan will be capable of producing and selling competitively to the world in 2035 that it cannot produce today. Development is ultimately about building national capabilities,” he added.

He identified productivity, quality and innovation as key factors shaping Pakistan’s future competitiveness and said the government was working to promote a national culture centred on Productivity, Quality and Innovation (PQI).

The objective, he said, was to strengthen the global association of “Made in Pakistan” with reliability, quality and value.

Highlighting the role of human capital, Ahsan Iqbal said Pakistan’s population was its greatest resource, but warned that a large youth population could become a demographic liability without adequate investment in education, nutrition, healthcare, skills and employment opportunities.

“Human capital is our most important infrastructure,” he said, adding that the long-term strength of advanced economies was rooted not only in physical assets but also in the knowledge and innovation generated by universities, research institutions and innovation ecosystems.

The minister also highlighted the opportunities and risks emerging from artificial intelligence, saying developing economies that fail to build technological capabilities could fall behind in a new global intelligence divide.

Pakistan, he said, must move beyond being merely a consumer of emerging technologies and develop its capacity to produce and adapt technologies in areas including artificial intelligence, biotechnology, advanced manufacturing, agriculture and space sciences.

On climate change, he said climate resilience could no longer be treated as a separate environmental concern, given its direct impact on fiscal stability, food security, infrastructure, public health and poverty.

He further pointed to the evolving role of the China-Pakistan Economic Corridor (CPEC), saying its next phase should increasingly focus on industrial cooperation, technology transfer, agriculture, exports and business-to-business partnerships, following the infrastructure and energy focus of its initial phase.

Ahsan Iqbal said national transformation could not be delivered by the government alone, stressing that the state must increasingly act as a catalyst, convenor, regulator and enabler while the private sector drives entrepreneurship, innovation and competitive investment.

He also underlined the need for policy continuity, saying sustained economic development required a consistent direction over an extended period.

“Successful nations may follow different economic models, but they share one common characteristic: continuity of direction. Economic development is the compound interest of good policies consistently implemented over time,” he said.

The minister encouraged the visiting Harvard Business School MBA students to view Pakistan as an opportunity for investment and entrepreneurship and invited them to contribute their knowledge and expertise to the country’s development.

He said the ultimate objective of Pakistan’s development journey was to expand opportunities for its citizens by enabling young people, regardless of gender, geography or family income, to access quality education, develop valuable skills, secure productive employment, start businesses and pursue a better future.

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