Consultation with stakeholders is the key to success. There is little doubt that the government is making serious and sincere efforts towards economic recovery and these efforts deserve recognition. I remain confident that the results of the current reform agenda will ultimately be positive for the people of Pakistan. There is also no denying that the economic team is working diligently, with dedication and commitment, under exceptionally difficult circumstances.
ECONOMIC RECOVERY
Consultation with stakeholders is the key to success. There is little doubt that the government is making serious and sincere efforts towards economic recovery and these efforts deserve recognition. I remain confident that the results of the current reform agenda will ultimately be positive for the people of Pakistan. There is also no denying that the economic team is working diligently, with dedication and commitment, under exceptionally difficult circumstances.
However, experience consistently shows that consultation with stakeholders -- particularly the business community -- can significantly improve policy outcomes. Constructive engagement strengthens policy design and implementation, reduces resistance, restores trust and helps prevent protests that disrupt economic activity and undermine confidence. Meaningful dialogue ensures that reforms are understood, accepted and implemented in a manner that balances economic necessity with the practical realities of business execution.
Pakistan’s economy today reflects the cumulative impact of long-standing structural weaknesses combined with immediate pressures. Chronic fiscal deficits, a persistently narrow tax base, mounting debt-servicing obligations, and recurring balance-of-payments crises have constrained growth and limited the state’s capacity to provide essential services. These domestic challenges have been compounded by global economic instability, rising commodity prices and climate-related disruptions affecting agriculture, energy and supply chains.
In response, the government has launched a series of economic reforms aimed at stabilising macroeconomic indicators, revitalising revenue streams and laying the foundation for sustainable growth. These reforms are necessary, timely and technically sound. However, their ultimate success depends not merely on economic logic but on how effectively they are implemented and accepted at the ground level. Policies crafted without adequate engagement with those directly affected often face resistance that weakens their impact.
The business community lies at the heart of this equation. Traders, manufacturers, exporters, retailers and small and medium enterprises collectively employ millions of Pakistanis and serve as the backbone of domestic economic activity. Trade and commerce constitute a significant share of Pakistan’s GDP and link producers to consumers across both urban and rural markets. Any policy decision related to taxation, energy pricing, documentation or regulatory enforcement directly affects these businesses.
When such reforms are introduced without sufficient consultation, the consequences are predictable: confusion, apprehension and resistance. These tensions frequently manifest in protests, strikes and market slowdowns, harming the broader economy and diluting the intended benefits of reform.
The current economic conditions facing Pakistan’s businesses remain challenging. After years of elevated inflation, recent data indicates a welcome easing of price pressures. By 2025, inflation had declined to mid-single-digit levels, providing some relief to households and businesses. However, underlying cost pressures remain acute. Energy prices continue to pose a major challenge for manufacturers and retailers, while financing costs and liquidity constraints constrain investment decisions.
Beyond economics, consultation has an important social dimension. Inclusion fosters shared responsibility, strengthens institutional credibility and builds trust between policymakers and society. When people feel heard and respected, they are more willing to accept difficult but necessary reforms
Another key indicator of reform progress is Pakistan’s tax-to-GDP ratio. Encouragingly, this ratio rose to around 10.6 per cent in fiscal year 2024–25, reflecting improved revenue mobilisation and bringing Pakistan closer to the 13 per cent target under the IMF’s Extended Fund Facility. In late 2025, the IMF approved a $1.2 billion tranche, acknowledging progress in tax administration, structural reforms and fiscal discipline. While this endorsement reflects confidence in the policy direction, it also emphasises the need for careful and sustained implementation.
Despite these gains, conditions on the ground remain complex. Many small traders and microenterprises remain wary of compliance costs, regulatory complexity and inconsistent enforcement. Efforts to document the informal economy -- estimated to constitute a significant share of economic activity -- have therefore met resistance, risking further mistrust if not handled sensitively.
This is where stakeholder consultation becomes indispensable. Consultation is not a procedural exercise; it is a strategic tool. Early and genuine engagement allows policymakers to understand operational realities, anticipate obstacles and refine regulations before implementation. International experience shows that economies which have successfully navigated difficult transitions have done so by building consensus with the private sector through structured dialogue.
In Pakistan, however, engagement has often been reactive rather than proactive, intensifying only after resistance or protests emerge. By then, trust has already eroded, negotiations become more difficult and economic costs rise. Policy uncertainty discourages investment, delays expansion and weakens growth momentum -- undermining the very objectives reforms seek to achieve.
Beyond economics, consultation has an important social dimension. Inclusion fosters shared responsibility, strengthens institutional credibility and builds trust between policymakers and society. When people feel heard and respected, they are more willing to accept difficult but necessary reforms.
For consultation to be effective, it must be structured, continuous and substantive, involving chambers of commerce, trade associations, small business representatives and exporters throughout the policy cycle. The government’s role is not merely to enforce compliance but to create an environment in which compliance is fair, predictable and beneficial.
In conclusion, Pakistan stands at a critical juncture in its economic journey. Progress on inflation control, revenue mobilization and IMF commitments demonstrates that reforms can deliver results. However, for these gains to translate into durable, inclusive growth, consultation must move from rhetoric to reality. Stakeholder engagement -- especially with the business community -- is not a luxury; it is a strategic imperative. Sustainable recovery will ultimately be defined not just by numbers on paper, but by cooperation, trust and a shared commitment to national progress.
The writer is the former regional chairman of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and CEO of the Hi-Tech Group.
