This week the State Bank raised its policy rate to 12 percent. The fiscal surplus halved, even though revenue beat its target. The government confirmed it has collected Rs4.4 trillion in petroleum levy over four years and said there would be no relief before the next budget. And the World Bank offered Pakistan another $600 million to fund reforms that Parliament could pass for free. All of this was reported. Almost none of it was connected. The press is getting better at questioning individual decisions. It still cannot see the system that keeps producing them.
Reporting announcements: The government announced 581 regulatory reform initiatives. The State Bank launched an online loan portal for small firms. A new regulator for the construction sector is being considered. No one asked the one question that matters. What will disappear? Reform is measured by the permissions, NOCs and inspections that are abolished, not by the number of initiatives announced. A new regulator is not deregulation. And a loan portal cannot change the behavior of banks that earn a safe return by lending to the government. That was the real story.
Op-eds in separate rooms: The commentary was good this week, but every piece stood alone. Zafar Masud and Nadeem Ul Haque argued over why credit does not reach firms. Farooq Tirmizi in Profit showed where savings go instead: into plots that lost real value in 91.8 percent of the areas he examined. Neither conversation mentioned the other. Tax writers debated the burden on producers, while the petroleum levy quietly imposed it through energy prices. Read together, these pieces describe a single cycle. A state that runs on permissions discourages investment. Banks lend to the government instead of to business. Households buy land because nothing else feels safe. Firms stay small and do not export. The dollar shortage returns, and another round of stabilization follows. The press reports every stage. It never describes the cycle. What mattered:
Reform has become a borrowing program
Shahbaz Rana's report in the Express Tribune on the World Bank's BRIDGE program was the best journalism of the week. The loan is tied to a new Investment Act, insolvency and factoring laws, simpler business registration, and freeing wheat and sugar from trade controls. Every one of these is a domestic decision. None of them needs foreign exchange. The loan document makes the case against itself. Private investment is about 10 percent of GDP. Foreign direct investment is about 0.6 percent. This is after decades of donor-funded programs to improve the investment climate. So the real question is not whether BRIDGE is well designed. It is what the earlier programs cost and what they delivered. Nobody keeps that record.
Stabilization is feeding the interest bill
Subsidies fell by 90 percent and revenue beat its target. Yet the fiscal surplus dropped from 1.7 to 0.8 percent of GDP, because interest payments rose 36.6 percent, as Khaleeq Kiani reported in Dawn. Four days earlier, the State Bank had raised rates again. No newspaper put the two stories side by side. This is what an adjustment built on revenue rather than spending looks like. The state collects more, cuts what it gives citizens, and pays its creditors. The petroleum levy belongs to the same model. It is not just a tax on motorists. It falls on the diesel that runs tube wells, trucks and export supply chains. The question no one asks is simple: what should the state stop doing?
The press has started to question how the economy is managed. The next step is harder. It must hold the whole reform industry, including government, donors, banks and consultants, to the same standard of evidence it demands of everyone else.
Tirmizi's analysis challenges the country's favorite investment belief, that property always goes up. His data use listing prices rather than actual sales, but the finding holds. What no one asked is why Pakistanis put their savings into plots in the first place. The answer lies in how we plan cities. Density limits are low, zoning keeps homes and shops apart, and there is no workable law for owning apartments. Pakistan has a market for plots, but not for buildings. If plots are now losing real value, this is the moment to allow density and let savings flow into buildings that earn rent and create jobs.
Investors are watching the rules change
Dawn reported that Energas, a consortium that includes Lucky Group and QatarEnergy, has abandoned its LNG terminal at Port Qasim after years of preparation. It cited changing government policy and unresolved tax issues. In the same week, Haque and Shahid Sattar wrote in Profit about K-Electric's revised tariffs and what they mean for regulatory credibility. These two stories belong together. A government that keeps rewriting the rules for investors already committed cannot attract new ones by passing an Investment Act. Yet the story was filed as corporate news.
Provinces cost money; cities create growth
Dawn reported a PRIME estimate that thirty new provinces would add Rs610-730 billion a year in administrative costs. Dawn's editorial made the right point. The problem is not the size of provinces. It is that provinces refuse to give power to local governments. New provinces copy the old bureaucracy at a higher price. Cities with real authority and their own money generate growth. That is the comparison the debate needs.
The missing domestic research
The tax and petroleum levy debate ignored the 2024 Haque Reforms Commission report. The 581 initiatives were reported without any reference to PIDE's work on regulatory sludge. The provinces debate ignored twenty years of Pakistani research on cities. The PRIME study shows what happens when local evidence enters a debate. The debate gets better.
Three habits would make a real difference. First, keep a reform ledger, and report every new loan or scheme alongside the ones that came before it and what they achieved. Second, count what disappears, and test every claim of deregulation against the permissions actually abolished. Third, read Pakistani research before importing the next blueprint. The press has started to question how the economy is managed. The next step is harder. It must hold the whole reform industry, including government, donors, banks and consultants, to the same standard of evidence it demands of everyone else. Until it does, Pakistan will keep announcing reforms without asking why the last ones failed.