Converting goodwill into growth

A two-pronged approach on Iran ties and global marketing is needed

KARACHI:

The global recognition of Pakistan's recent geopolitical goodwill has undoubtedly elevated the country's international standing under the current civil-military partnership. However, policymakers must now urgently accelerate efforts to convert these diplomatic triumphs into sustainable economic growth.

While analysts are already crunching the numbers on the immediate advantages – such as increased trade with Iran, potentially cheaper energy supplies, a massive reduction in smuggling, and lower cross-border transactional costs – the true value lies deeper. It rests on the fundamentally transformed global image of Pakistan.

From East to West, political leaders, military strategists, young professionals, corporate executives and global investors have lauded Pakistan's role in resolving a conflict that directly impacted billions of people worldwide. To capitalise on this momentum, Pakistan must immediately pivot towards a two-pronged economic strategy, assuming the 60-day window yields lasting peace and the lifting of economic sanctions on Iran.

1-Maximising Pak-Iran bilateral gains

The first priority must focus on aggressively scaling up direct bilateral economic ties with Iran, securing institutional mechanisms for energy, trade and logistics that benefit both nations over the long term. This enhances peace at the border and also uplifts socio-economically backward Balochistan province with a real shot at growth-led prosperity.

2-Aggressive global marketing and economic diplomacy

The second, and arguably most critical, priority is to invest heavily in showcasing Pakistan across regional, bilateral and global economic platforms. Pakistan's trade bodies, industrialists, entrepreneurs, ambassadors, trade attaches, commerce accelerators, central bankers, financial teams and lawmakers must maintain a continuous, monthly presence in key international markets. The message must be loud, clear and uniform: Pakistan is open for business, and we are looking for strategic partners.

Unleashing the power of the private sector

It is no secret that over the last few decades, Pakistan has lagged behind in producing value-added exportable goods for global value chains – particularly in electronics, auto manufacturing, semiconductors, data centres, IT, chemicals, fintech, healthcare, pharmaceuticals and advanced food processing. But this is far from the end of the road.

Pakistan possesses a highly talented, capital-rich tier of family-owned businesses with millions – and in some cases, hundreds of millions – of dollars tied up in industrial and residential real estate. Furthermore, several top-tier business groups are currently sitting on substantial cash reserves on the balance sheets of their listed companies. These proven risk-takers, job creators and thought leaders must be properly incentivised to forge international joint ventures and bring foreign strategic partners into the country.

We already have a robust proof of concept. A quick look at the Pakistan Stock Exchange (PSX) reveals numerous blue-chip companies successfully maintaining thriving, long-term foreign partnerships. Automotive and engineering: Atlas Honda, Ghandhara (JAC/Isuzu), Sazgar (Haval), Habib (Toyota), Lucky Motor Corporation (KIA, Stellantis, Peugeot, GAC), and Hubco (BYD). Industrial and manufacturing: Servis (Long March China), Treet (Chinese battery partnerships), Pak Elektron (Panasonic and Hisense), and Mansha Group (Omoda Jaecoo).

Infrastructure, energy and chemicals: Engro (FrieslandCampina), Unity Foods (Wilmar), GO Petroleum (Aramco), and PIBTL (Reko Diq). Technology and textiles: AirLink (Xiaomi) and Interloop/Gul Ahmed partnering with premier Western apparel brands. Healthcare and international ventures: Lucky Venture's expansion into Iraq and Congo, alongside Maple Leaf/Novacare Hospital's prestigious affiliation with Imperial College Healthcare NHS Trust, UK.

In these cases, foreign clients are secured long-term, international experts are training local labour, and global engineering, procurement and construction (EPC) firms are executing domestic projects. While Pakistan's top business groups may not match the sheer capital scale of their regional peers in India, this is precisely where the government must step in. By offering targeted fiscal and monetary incentives through commercial banks, streamlined tax policies and the unified Special Investment Facilitation Council (SIFC) one-window operations, the state can help solidify these economic foundations for the decade ahead.

The cost of inaction

The immense diplomatic groundwork laid by Pakistan's top leadership – including the prime minister and the field marshal – will be squandered if it does not cascade into material, tangible outcomes. We need export-led growth, value addition, foreign direct investment, job creation, import substitution and rapid technology transfers.

To achieve this, government interaction with the business community must evolve. We need to move away from rigid, closed-door roundtables and transition into monthly, amphitheatre-style forums featuring the top 1,000 business leaders in the country to identify and dismantle regulatory roadblocks in real time.

If we fail to capture this momentum within the next few years, these historic diplomatic efforts will inevitably be written off as another missed opportunity the moment leadership changes or regional peace is disrupted. Furthermore, while strengthening ties with Iran was the correct strategic move, it has undoubtedly unsettled certain regional adversaries and traditional allies. We are already seeing concerns regarding a potential slowdown in remittance growth; these vulnerabilities must be aggressively offset by a surge in private-sector-led foreign investment.

The vision for 2060

The "Top 1000 Club" of private-sector leaders holds the key to elevating Pakistan from a $1,900 per capita economy to $5,000 per capita by 2060. Achieving this requires a sustainable, long-term approach: maintaining a steady overall GDP growth rate of 5% to 5.5% for the next three decades, and effectively managing and reducing the population growth rate to ensure a net GDP per capita growth of at least 3% annually.

For a nuclear-armed developing nation of over 250 million people moving towards a projected 500 million, this trajectory is entirely achievable. It would elevate the living standards of the average Pakistani to the current levels enjoyed by prosperous regional economies like Indonesia and Vietnam.

The blueprint is clear: remove the shackles, provide the incentives, and let the private sector lead the economy once again.

THE WRITER IS AN INDEPENDENT ECONOMIC ANALYST