Elite veto, national cost

A debate has just begun in Pakistan, and already it is bearing fruit. It concerns the announcement of the EU-India trade deal, which has been in the making for nearly two decades, still needs formal signing, and hinges on the timely alignment of countless moving parts across 27 European Union countries and India.

It is difficult to miss the timing. The announcement was rushed by two estranged US partners, both of whom have publicly expressed frustration with Washington's current trade posture. India has endured punitive US tariffs, while the EU is wary of the Trump administration's trade wars and recent statements on Greenland. Both needed to signal to Washington that they have options.

Recent World Bank and Trading Economics data put the US nominal GDP at about 29.2 trillion dollars for 2024, the EU's at around 19.4 trillion dollars, and India's at roughly 3.9 trillion dollars. While this trade cannot replace the US market for either party, it could still serve as a meaningful addition to their economies.

But let us not jump the gun. What has been agreed so far is a political understanding, not an operational document. The legal text still has to be finalised and translated; national parliaments across Europe must approve it; and even provisional application will not deliver real gains until customs rules, standards and certification systems are in place. Trade deals are not press releases. They are regulatory ecosystems, and those ecosystems take time to build. Add to this the legendary obstructionism of the Indian bureaucracy, arguably more rigid and punitive than anything Pakistan produces, along with the narrow domestic policy space available to the Modi government, and the deal begins to look far less imminent than current headlines suggest.

And yet this scribe noticed a headline in a national daily titled "EU-India deal a wake-up call, say exporters". The accompanying story highlighted recommendations from the business community for "urgent corrective measures", including reductions in power tariffs, tax simplification and new incentives for exporters. Shortly thereafter, another headline appeared: "PM Shehbaz announces Rs4.4 cut in electricity rates for industries". This sequence has become familiar. During the last Nawaz Sharif government, exporters insisted that an artificially strong rupee explained weak export performance. After deregulation, the dollar rose from around one hundred rupees to nearly three times that level. Exports did not surge. In relative terms, they regressed.

The explanation simply shifted, from currency to energy, from energy to taxes, and from taxes to interest rates. Each diagnosis produced its own demand for relief. What was never addressed was the central problem: refusal to invest, upgrade and compete. For decades, industry groups have blocked competition through licensing barriers, tariff protection and regulatory capture, while investing little in research, skills, or integration into global value chains. Productivity growth has remained weak, product complexity limited, and export baskets stubbornly narrow.

Alarmism follows every attempt at discipline. Electricity prices, taxes, interest rates and exchange rate policy are all framed as existential threats. The political language is always the same: industry will collapse, exports will die, jobs will vanish. This narrative has proved politically effective because it allows private interests to present themselves as national saviours. The state retreats, absorbs the fiscal cost, and behaviour remains unchanged.

This preference for protection over performance has long-term costs that are rarely acknowledged. It locks capital into low-productivity activities, discourages technological upgrading and weakens linkages between industry and higher education. It also distorts labour markets, where firms rely on cheap, replaceable labour instead of investing in skills. Over time, this produces an economy that can survive on handouts and concessions but cannot scale, innovate, or absorb shocks. When global conditions tighten, such an economy does not adjust; it panics.

If one wants proof of the pudding, it lies in persistently weak job creation and stagnant exports despite years of repeated state capitulation. Concessions have multiplied; outcomes have not.

The same pattern recurs elsewhere. Former diplomats moralise while narrowing policy choices. Over the past two years, condemnation over Gaza substituted for policy thinking. When diplomacy finally moved, driven largely by American intervention, the same voices rejected peacekeeping, engagement and participation. Troop contributions became unacceptable. Negotiation became surrender.

A similar dynamic governs debate about Pakistan's relations with the United States. While Washington engages Islamabad, Indian influence operates quietly through Western bureaucratic chokepoints. Visa regimes tighten. Travel advisories appear. Access for ordinary Pakistanis becomes harder, not because of a policy rupture, but because of systematic pressure within institutions. Instead of helping counter this bias, Pakistan's own discourse often amplifies it.

The same bad faith is visible in how its own elite polices Pakistan's policy options. These voices lamented the failure of Muslim rulers to end the Gaza war, but when diplomatic movement finally occurred, largely through President Trump's intervention and his emerging "Board of Peace", the tone shifted again. Participation became unacceptable. Peacekeeping became imperialism. This is despite the fact that Pakistan has historically followed Saudi Arabia's lead on such matters, and Riyadh itself has reassessed its strategic environment in recent months, shaped by developments in Sudan, Somaliland and South Yemen. The objection, it seems, is not to outcomes but to the state having options at all.

The same impulse surfaces in clerical politics. Maulana Fazlur Rehman's threats to defy the law on underage marriage reflect a deeper pathology: authority demanded without responsibility being accepted. The irony is painful. His father was among the framers of the 1973 Constitution.

Seen together, these strands point to a single conclusion. Pakistan's most powerful actors treat the state not as an instrument to be strengthened, but as a resource to be negotiated and hollowed out. Business wants subsidies without competition. Commentators want virtue without responsibility. Clerics want authority without law.

The deeper question, then, is not why Pakistan struggles. It is why veto-holders are privileged over workhorses, obstruction over contribution, noise over capacity. Until that hierarchy is reversed, crises will continue to appear external, moral or conspiratorial, while their roots remain firmly domestic.