Economic growth and long-term sustainability in Pakistan are directly dependent on political stability. The experience of developed and emerging countries demonstrates that without a stable political system, neither a strong economy can be built nor sustainable development achieved. Despite Pakistan’s strategic location, natural resources, young population, and substantial agricultural and livestock sectors, the country has failed to achieve the desired economic progress. The primary reason is persistent political instability and inconsistency in policy implementation.

Political stability does not merely mean the continuity of government; it refers to a reliable and predictable system with constitutional supremacy, rule of law, strong institutions, consistent policies, and peaceful transfer of power. A stable political environment allows governments to make difficult but necessary economic decisions, enables institutions to function efficiently, and allows the economy to plan for the long term. Conversely, political instability creates economic uncertainty, discourages investment, and hinders development projects.

The roots of political instability in Pakistan are deep and historical. Since the country’s inception, democratic continuity has often been interrupted. Elected governments were rarely allowed to complete their full terms, and institutions were deprived of the time needed to strengthen. Consequently, politics revolved around personalities rather than institutions, short-term political interests were prioritized over national priorities, and a long-term national vision could not be realized. The imbalance of authority and conflicts among state institutions have further exacerbated instability. When institutions fail to work harmoniously and operate at cross purposes, decision-making weakens, reforms stall, and the state system becomes paralyzed. This situation directly impacts investment and business activity.

Political instability creates multiple barriers to investment in Pakistan. Policy uncertainty is the foremost obstacle, as frequent changes in taxation, import/export regulations, energy pricing, and incentive programs make long-term planning impossible for investors. Frequent amendments to laws, unpredictable regulatory actions, and lack of contract enforcement severely undermine the confidence of domestic and foreign investors. Weak rule of law, delayed judicial processes, and inefficient dispute resolution mechanisms further impede investment. Corruption, bureaucratic red tape, delays in approvals, and unprofessional administrative interventions increase the cost of doing business and reduce the benefits of investment. Energy shortages, high electricity and gas prices, inadequate infrastructure, volatile exchange rates, and financial instability are also serious obstacles, while political protests, strikes, and shutdowns disrupt business continuity and contribute to Pakistan being perceived as a high-risk market.

The effects of political instability are also evident in Pakistan’s trade balance. In FY 2024–25, exports remained around $32–33 billion, while imports exceeded $56 billion, resulting in a trade deficit of $20–25 billion. These figures highlight that weak policymaking and inconsistency have prevented the export sector from strengthening, while dependence on imports has continued to grow. Lack of investment, weak exports, and trade deficits have a direct negative impact on the State Bank of Pakistan’s foreign exchange reserves. When investment is low, exports are limited, and imports are high, the reserves face severe pressure. Policy uncertainty, delays in external financial assistance, and political tensions further reduce reserves, putting pressure on the rupee and causing financial instability.

Weak foreign exchange reserves not only affect currency stability but also limit the government’s economic autonomy. In such conditions, the state is forced to impose import restrictions, increase interest rates, and implement stringent financial measures, which further impact industrial production, employment, and overall economic activity. In contrast, political stability, predictable policies, and restored investor confidence allow for increased exports, optimal use of remittances, and foreign investment, strengthening the State Bank’s reserves. Robust reserves not only provide protection against financial crises but also enable the state to make independent and long-term economic decisions.

Economic pressure, inflation, unemployment, and growing public debt create public disillusionment, increasing political unrest and widening the circle of instability. These conditions compel skilled and talented youth to leave the country, exacerbating brain drain and reducing human capital. Key sectors such as education, agriculture, and livestock are unable to achieve their full potential due to lack of investment and policy inconsistency. The livestock sector, which contributes around 15% to the national output, could play a significant role in generating employment, increasing exports, and promoting rural development if supported by stable policies, veterinary infrastructure, and private investment.

The reality is that without political stability, investment and economic reforms cannot flourish, and without investment, economic growth and sustainability remain a distant dream. Political stability provides the foundation for restoring investor confidence, maintaining policy continuity, stabilizing foreign exchange reserves, and strengthening the economy on solid grounds. Strong institutions, political tolerance, policy consistency, and peaceful transfer of power enable Pakistan to overcome current economic crises and embark on a path of sustainable development, social stability, and national prosperity. In such an environment, youth and professionals will remain in the country, applying their skills for national development, reducing brain drain, and preserving human capital. Modern technology and improved infrastructure in agriculture and livestock can boost production and exports, reduce dependence on imports, and lower the trade deficit. Universities and research institutions can improve educational quality, integrating the capabilities of young talent into national growth. Fiscal discipline, tax reforms, anti-corruption measures, and enhanced public services will strengthen social justice and public confidence. Thus, economic, social, and human stability can be achieved across all sectors, enabling Pakistan to compete globally while ensuring steady internal growth, increased employment opportunities, a robust economy, and a bright future for the youth.

Dr. Alamdar Hussain Malik
Advisor, Veterinary Sciences
University of Veterinary and Animal Sciences, Swat
Former Financial Adviser
Finance Division, Government of Pakistan