Redrawing opportunity

Pakistan has 252.09 million people and only four provinces. Punjab alone is home to about 133 million people. The arithmetic looks compelling: surely, a country this large needs more provinces. Yet economics does not always follow the map. A new boundary can shorten the distance to government; it cannot, by itself, shorten the distance to opportunity.

That distinction should sit at the heart of Pakistan's latest debate on creating new provinces. The real economic question is not how many provinces a country of 252 million should have. It is where decisions are made, where public money is spent, and whether citizens and firms outside the major capitals can access the same economic possibilities as those within them.

Pakistan did decentralise after the 18th Amendment, but much of that decentralisation stopped at the provincial tier. The World Bank estimates that local governments accounted for only 4.7% of general government spending in 2024, down from 10% in 2005. This suggests Pakistan may be less under-provincialised than it is under-decentralised.

The spatial imbalance is equally revealing. World Bank estimates for FY23 show recorded real per-capita expenditure in Lahore at more than four times that of other Punjab districts; Peshawar at around three-and-a-half times; Quetta at nearly five times; and Karachi at almost twice the rest of Sindh. Some of this reflects provincial departments being headquartered in capitals, but the broader pattern is difficult to dismiss. In Pakistan, political proximity still carries an economic premium.

This is where the case for smaller provinces becomes economically interesting. A government located closer to southern Punjab, interior Sindh or another underserved region could understand local constraints better and respond faster. But we should also ask what would grow first after a new province is created. Most likely, it would be government itself.

A new province requires an assembly, secretariat, departments, residences, vehicles and a civil service. Construction rises, land values increase and services gather around the new capital. It can look like a boom. But an administrative boom is not necessarily an economic transformation.

The fiscal numbers should make us cautious. Provincial own-source tax revenue still hovers around only 1% of GDP, while more than 80% of consolidated provincial expenditure in FY24 was recurrent. A poorer new province could therefore acquire the institutions of government much faster than it acquires a productive tax base. Federal transfers are not the problem; every functioning federation redistributes resources. The real test is whether the transfers finance transformation or administration.

The strongest argument for economic decentralisation, however, may be found not in provincial budgets but in Pakistan's people. The latest Labour Force Survey puts the working-age population at 179.6 million and unemployment at 5.9 million. In 2025 alone, 762,499 Pakistanis registered for employment abroad. People do not leave Multan, Sukkur, Bahawalpur or smaller towns because these places lack governors. They leave because too often they lack the university, employer, finance, infrastructure, connectivity and career path that make staying economically rational.

That is why creating regional economic centres matters more than creating additional capitals. Multan should matter not because it might host an assembly, but because it can become a serious agro-processing, logistics, education and services hub. Sukkur should matter because of its potential links with agriculture, energy and trade. The same principle applies across Pakistan: build clusters, skills, connectivity and empowered local governments around secondary cities, and migration patterns can begin to change.

Before drawing any new provincial boundary, Pakistan should ask a few uncomfortable questions. What will the new province produce? What can it tax? What industries can grow there? How much will its government cost? And, most importantly, how much authority will that new province itself devolve to its cities and districts? Otherwise, we may replace four distant provincial capitals with eight or twelve distant provincial capitals and call it reform. Pakistan does not merely need a new map. It needs a new geography of opportunity.