IT is not yet clear how deep and how sustained they are, but cracks are now appearing in the edifice that is the hybrid plus regime running Pakistan these days.
This is a natural consequence of the cul-de-sac where the economy is now parked. In the early months of 2025, Pakistan hit what I called “peak stability”, which was a state of affairs where the economy had been stabilised, its debilitating deficits bridged, inflation extinguished. The big question at the time was what comes next.
No economy can remain in stabilisation mode for very long. At some point, a vision to transition out of stabilisation towards growth had to be implemented, with a kind of growth that would not open the door to the deficits one more time. But that didn’t happen.
Earlier this year, I wrote that we have reached the end of stability. The hunger for revenues and foreign exchange is rising while the economy remains mired in a low-growth stability. And now that hunger has reached the hallowed halls of politics and tested the coalition upon which the government’s majority in parliament (or what is left of it anyway) stands.
The run-up to this budget now sees peak stability rubbing up against its political limits, and the delays in the holding of the National Economic Council meeting — critical to finalising the budget before it is tabled before parliament — show that the edifice is cracking under the strains of operating within its limits.
To see this strain, consider a simple observation. I have never seen the political class of this country as out of ideas as they are now. In the past, for better or worse, at least we had some ideas, some kind of thinking, to tackle the limitations of the state and economy within which they were operating. The ideas may not have been the best, but at least they existed.
We had amnesty schemes, some crafted rather shrewdly, and clever schemes for exporters. We had “deemed incomes” to tax the rich with and a new tax on banking transactions. In 2009, they came up with a ‘carbon surcharge’ on fuel and sold it to the country as a green tax of some sort, designed to help reduce carbon emissions. Nobody quite bought that line, but at least it was new, even if it was just a communication strategy and nothing more.
Back then, we at least had something to critique, because they were actually doing something. True, it wasn’t much. But compared to the present lot, they were moving heaven and earth. Just look at the ideas they are now talking about and you’ll notice either they are not ideas, or they are recycled from the earliest days of Pakistan’s struggles to try and broaden the tax base. Consider the idea to reverse the NFC allocations, which is not an idea but a strong-arm tactic.
The resultant agreement between the centre and two provinces, to pare back provincial development spending and return a larger share of the NFC transfers is a stopgap measure to accommodate the demand for more resources coming from the military without setting into motion a politics that has always led towards confrontation.
One has never seen the political class of this country as out of ideas as they are now.
One can probably point to a few other examples like the national tariff policy under which the government is aiming to reduce import levies in the form of customs duties and additional customs duties in an effort to spur economic activity. But whatever results this produces will be over the long term, far beyond the horizon to be meaningfully measurable. There was some talk at the start of the government’s term to promote digital payments, for which they built a committee and, that was the last we heard of it.
Today, they are talking about fixed taxes for retailers, based on turnover, and clawing back some resources from the provinces. One is among the oldest and most tried and failed ideas in our tax toolkit, and the other is some kind of an elaborate political settlement to distribute the growing expenditure burden of the federal government onto the provincial governments. Both efforts testify to failure.
The budget thus far scheduled for tomorrow will be little more than a ceremonial exercise. One hesitates to use metaphors mentioning the Titanic because that language feeds despondency and despondency is our biggest enemy in times such as these. Just because the government has failed is no reason for the rest of us to give up as well. But there is clearly an element of rearranging the deck chairs in how they are trying to thrash out some fiscal breathing room from inside their shrinking space.
Let’s be clear about one thing. This is what happens when a government has no opposition and no free media to worry about. They clap and cheer themselves all the way to a dead end. And once there, they look for ways to pass the parcel of responsibility around among themselves, and burden those who are captive to their machinery. It has taken them two years to get to this point. Along the way, they needed those who would point out that their peddling on stability is not getting anyone anywhere. But aside from a handful (and might yours truly include himself here, please?) these voices have been absent.
Politics needs an opposition the same way an economy needs risk to thrive. Without these — risk and opposition — power and capital are not tested and do not get a chance to sharpen their approach, to self-correct.
Those running our country today have got to find it in themselves to be in the game for more than just the trappings of power. They have to bring some thinking to the office. Otherwise, the constraints of their situation will keep tightening, and it’ll be the rest of us doing the screaming. Maybe, they’re alright with that, but I’m not.
The writer is a business and economy journalist.
khurram.husain@gmail.com
X: @khurramhusain
Published in Dawn, June 11th, 2026
