ISLAMABAD: The financial sector reforms implemented by the Shehbaz Sharif administration in last one year have had an unprecedented impact, tackling important economic issues and creating the framework for long-term growth; however, still faces the challenges of expanding the tax base, guaranteeing long-term debt management, enhancing SME financing availability and bolstering regulatory enforcement.
This has been highlighted in a recently launched “The Pakistan Reforms Report 2025” by Mishal Pakistan, which evaluates reforms across the entire year, i.e., January 2024 to February 2025.
The report reviewed the Shehbaz Sharif administration’s 120 plus reforms, focusing on governance, economic stability, and social inclusion in 2024.
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This report is not a commentary on the effectiveness or quality of the reforms but rather an effort to document the legal and structural changes that have shaped the country’s economic, social and political landscape.
The report says that allegations of anomalies marred the 2024 general elections, which caused a general lack of polarisation increased, and a fragmented government environment was produced, where opposition parties and the general public opposed the implementation of policies.
The report suggests Pakistan’s digital transformation is at a critical crossroads.
While regulatory reforms and infrastructure projects have positioned the country as a growing digital economy, concerns over internet restrictions, cybersecurity enforcement and bureaucratic in-efficiencies could undermine progress. A balanced approach- one that prioritises security while preserving online freedom, facilitates investment while ensuring consumer protection and fosters innovation without excessive regulation- will be key to Pakistan’s long term success in the global digital landscape.
While, the NAB has made considerable progress in its efforts to be more accountable, the report says several of its practices have come under scrutiny. Concerns about the apparent selectivity in probes have been raised by observers, and some stakeholders are calling for a more consistent and open approach to accountability in all sectors. More clarity on the difference between political dynamics and investigation priorities, as well as the necessity of strengthened procedural safeguards to guarantee impartiality, have been proposed.
Talking about the recovery of Competition Commission of Pakistan (CCP) of Rs100 million in penalties over the previous year is concerningly low. The CCP’s effect will remain more symbolic than practical in the absence of harsher sanctions, speedier adjudication and more robust legal support, failing to provide a real deterrent against market manipulation.
The report further points out that the choice to build the CCP headquarters in Islamabad, with a ground-breaking ceremony scheduled for March 2025, is more contentious. The CCP makes the fair argument that it will save Rs110 million a year in leasing expenses by having its own building. However, it seems dubious to prioritise infrastructure over bolstering regulatory processes given the commission’s current budget limitations, backlogs in legal cases, and enforcement shortcomings. The CCP should prioritise enhancing market interventions, building capacity, and enacting legal reforms before making investments in tangible assets.
The deregulation of the inland freight equalization margin (IFEM) is a significant structural change that aims to draw in foreign investment in pipeline infrastructure and promote competitive fuel transportation. Although this change encourages market competition, it may also lead to regional price differences, which would disproportionately affect customers in rural areas. To ensure fair fuel prices across the country, policymakers must balance deregulation.
Although, energy sector has undergone a substantial transition as a result of reforms in energy sector, a number of obstacles still exist. Although privatising Discos can improve service efficiency and quality, there are structural and political obstacles to overcome.
A significant issue is the public-private partnership (PPP) model, which will still faces investment hesitation from foreign companies because of regulatory complexity even with new procurement procedures. Furthermore, Pakistan’s green bond market is still in its infancy and the shift to green finance channels had been gradual.
Security, governance and investor confidence are gradually improving as a result of Pakistan’s law and order reforms. The final measure of these regulations’ effectiveness, however, will be to ensure the ethical application of these policies, address concerns of overreach and maintain a balance between security and civil liberties.
The Ministry of Law and Justice has made admirable progress in changing Pakistan’s legal system; but, these changes will only be successful in the long run if they are implemented openly, are regularly reviewed by judges, and are trusted by the general public.
Copyright Business Recorder, 2025
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