s the economy stalls with war in the Persian Gulf, certain narratives have started appearing with renewed vigour, promising various panaceas for our economic ills. Common themes include increasing the tax-to-GDP ratio, as if more revenue to the government would lead to wiser spending and prosperity. This occurs while we continue to endure the economic suffocation of past IPP policies in our everyday lives. Add to this the throw-forward liabilities of the Public Sector Development Programme that now exceed 10 trillion rupees, guaranteeing that these projects, if ever completed, will be neither on time nor within the budget. The state machinery is structurally incapable of efficient capital allocation.

Another popular theme is the broadening of tax documentation. In a society where functional literacy does not extend to half the population (perhaps two-thirds) processes are being designed to European exactitudes. While there may be some residual wisdom in these approaches, something seriously fallacious has also surfaced in the national press: the idea of a controlled demolition of the rupee to build export competitiveness.

There is a long contrarian history to this philosophy—but can that be allowed to spoil a good narrative? In 1995, the PKR was about 30 to a US dollar; by 2025, it had lost nearly 90 percent of its value and traded at 278. How did this long-term massive depreciation play out in trade? Exports during the same period went from 16 percent of GDP in 1995 to about 10 percent of GDP in 2025. As a share of world exports, our footprint moved from 0.18 percent in 1995 to about 0.12 percent in 2025, effectively shedding a third of our previous share.

If the export numbers fail to validate the orthodox narrative, the import side reveals a structural reality. In 1995, imports stood at roughly 18 percent of GDP; after 30 years, they remained remarkably sticky at 17.2 percent, even after decades of currency demolition and a host of import-restricting measures. This persistence is not a sign of consumer indulgence; it reflects a structural component integral to the economy’s functioning. Devaluation, therefore, does not ‘cure’ a vice; it simply inflates the core costs of this economic engine and renders the economy even less competitive.

The policy prescribers point from their rote memory to South Korea’s take-off in the 1960s and China’s currency reset in 1994 as historical proof that depreciation works. This ignores the fact that each market has its own memory. Those nations used a sharp, one-time currency adjustment as a strategic starter motor for a brand-new industrial engine, attracting genuine foreign investment because the new rate was trusted as a stable floor. In Pakistan, three decades of using currency demolition as a panic button has destroyed that credibility. The economy has become entirely immune to the prescription; the market no longer reads our devaluation as a new stable base to invest in, but as a distress signal to exit. The devalue-to-export argument is the ultimate recycled plot that ignores thirty years of failure.

It not only ignores failure; it also closes its eyes to a changed world. Field Marshal Haig, after the First World War, insisted in 1926 that the next war would be won by the cavalry charge. The concept of export-led growth in 2026 suffers from a similar anachronism. We are no longer living in the 1990s. Then, the US was leading uninhibited globalisation, thoroughly reassured of itself in the post-Soviet era. It had the most developed market and made it accessible on easy terms to anyone who had the skill and perseverance. Today, the biggest market in the world has changed its mantra to America First and is clearly signalling strict, transactional reciprocity.

The global market has also seen other shifts. The compliance cliff in Europe is certainly not easy to climb. EU directives are legal frameworks, not minor bureaucratic hurdles. They demand verifiable institutional transparency and strict human rights compliance across the entire supply chain; a cheaper rupee cannot bypass a carbon audit or a labour rights tribunal. Access to Pakistan’s export destinations is no longer just about price; it demands a certain level of regulatory and societal standards that require a drastic new approach to our rules, regulations and laws - even the constitution.

This does not mean exports will end; Pakistani entrepreneurs will keep striving and deserve every support. However, as the industry stands at present, we simply do not possess the skills or structure for exports to lead the economy out of its current quagmire. While the old adage insists that where there is a will, there is a way, the reality is that confiscatory tax policies have broken the will of the enterprising class. The state’s extraction mechanisms have actively destroyed their ability to navigate the storm.

This is no accident. In October 2021, the then State Bank governor, under whose watch the rupee lost a third of its value, publicly rationalised that depreciation was beneficial because it allowed overseas Pakistanis to get “more rupees” for their dollars. This was not a mere gaffe; it was a Freudian slip of the governing class that has mentally seceded from domestic reality. The pulp fiction of economic thought portrays the currency as any other product to be traded rather than a contract to be honoured.

This fundamentally eschews the true purpose of money. The rupee is the calibrating unit of all economic activity. It is meant to be three distinct things to a functioning society: a reliable unit of account that people assign to their life’s work; a secure store of wealth that preserves the effort of the citizen; and a stable medium of transaction that builds the collective wealth of society. The value of the currency does get adjusted; no serious observer advocates for an artificial, unsustainable peg. However, such adjustments must be made with full cognizance of the severity of the matter, rather than as a lazy resolution of structural challenges.

Ultimately, the greatest allure of the export-led growth narrative to the policy class is that it successfully evades all meaningful scrutiny of the domestic economy. By projecting the nation’s economic destiny entirely onto external trade balances and exchange rate adjustments, our economic managers create a convenient diversion. It allows them to bypass the uncomfortable reality that the domestic arena has been utterly hollowed out, transformed into a theatre where state functionaries have become the biggest and most predatory vested interest. To look inward would require confronting the Rs 10 trillion PSDP backlog and a thorough debate of priorities; the suffocating IPP contracts and the mistakes that must be avoided in the future; and the administrative tollbooths that actively strangle internal resource mobilisation. It is far easier for an insulated bureaucracy to manage a controlled demolition of the currency than to dismantle its own sprawling network of entitlements and regulatory rent.

The writer is professor/ director at the Management Studies Department, Government College University, Lahore. The opinion expressed is entirely his own.