annashay 
For decades, Pakistan’s policymakers have talked about turning the country’s strategic location into an engine of trade and investment. Positioned at the crossroads of South Asia, Central Asia, the Middle East, and Western China, Pakistan has the natural geographic advantage to become a regional economic hub. Projects like China-Pakistan Economic Corridor (CPEC), preferential trade agreements with Malaysia, and long-standing ties with Gulf states provide a strong foundation for deeper economic integration. Yet, despite this promising position, Pakistan continues to underperform.
The country’s trade volumes with key regional partners remain far below potential. China remains a dominant source of imports, but Pakistani exports have failed to keep pace. With Malaysia, even after recent business conferences and agreements – such as halal meat export initiatives – investment and joint ventures remain modest. Trade with Central Asia faces logistical and customs barriers, while commercial ties with the Gulf, despite cultural and economic proximity, are still underdeveloped. The missing link in this equation is the private sector, which should be driving this growth – but is instead constrained by layers of bureaucracy and policy inconsistency.
Bureaucratic inertia is at the heart of the problem. Instead of facilitating trade, Pakistan’s regulatory structure often acts as a bottleneck. Businesses face complex approval processes, unpredictable tax policies, and overlapping jurisdictions that delay projects and discourage investment. Many of Pakistan’s neighbors have modernized customs procedures, introduced single-window clearances, and adopted digital systems to ease trade. Pakistan, however, continues to lag behind, losing competitiveness in regional markets.
Policy instability compounds the challenge. Frequent regulatory changes, tariff fluctuations, and unpredictable currency measures make it nearly impossible for businesses to plan long term. Exporters in Karachi, Sialkot, or Faisalabad cannot confidently expand when new taxes or restrictions may suddenly make their operations unviable. This uncertainty not only limits domestic investment but also keeps foreign investors on the sidelines.
A critical gap lies in trade facilitation infrastructure. Efficient logistics, cold chains, special economic zones, and modern border facilities are essential for cross-border commerce. Countries like Malaysia and the UAE have created specialized hubs that seamlessly integrate private businesses into global value chains. Pakistan, despite launching special economic zones under CPEC, has not been able to operationalize them effectively. Delays in development, poor coordination between federal and provincial authorities, and lack of targeted incentives have blunted their impact.
The example of Malaysia illustrates both the potential and the problem. Pakistan produces high-quality halal meat, mangoes, and textiles, while Malaysia brings technology, processing capacity, and access to ASEAN markets. Joint ventures in food processing, IT outsourcing, halal certification, and tourism could significantly increase trade volumes. But for this to happen, Pakistani businesses need predictable policies, streamlined customs, and easier financing. That requires the state to act as a facilitator, not a controller.
The same is true for China and Central Asia. Rather than relying on imports, Pakistani industries must expand exports of textiles, construction materials, IT services, food products, and tourism offerings. Modernizing border facilities, integrating digital customs, and making trade agreements private sector-friendly could open entirely new markets – especially in Xinjiang and the Central Asian Republics.
The Gulf region also represents a largely untapped opportunity. While it is a major source of remittances, trade and investment flows are not commensurate with the depth of Pakistan’s human and cultural ties to these countries. Demand for construction materials, agro-products, IT services, and skilled labor can be met by Pakistani businesses if they are supported through trade diplomacy, business councils, and financing mechanisms.
Unlocking this potential demands serious reform. Pakistan must move decisively toward a facilitative trade regime. One-window operations at ports and borders must become operational, tax codes simplified, regulations stabilized, and red tape slashed. Exporters should not have to navigate a maze of departments just to secure permits or refunds. Digital systems and transparent timelines are not luxuries – they are basic requirements to compete regionally.
At the same time, the private sector itself must step up. Too many businesses remain reliant on state subsidies or protectionist policies rather than innovation and competitiveness. To compete regionally, Pakistani firms must modernize operations, adopt technology, and build partnerships across borders. Public-private partnership should become a central pillar of economic strategy – with the state enabling, not controlling, enterprise.
This shift requires trust and consultation. Regular dialogue between the government, exporters, and investors can ensure that trade policy reflects on-ground realities. The private sector should be a stakeholder in shaping agreements, not a passive recipient of decisions.
Pakistan’s path to economic revival will not be paved by IMF loans or external aid alone. Sustainable growth will come from expanding trade, boosting investment, and empowering entrepreneurs. The private sector can drive this transformation – but only if the state clears the way. With agreements already in place with China, Malaysia, Gulf countries, and Central Asia, Pakistan has the map. What it lacks is the momentum.
The time to act is now. Empowering the private sector, dismantling bureaucratic roadblocks, and modernizing trade facilitation will not just boost exports – it will redefine Pakistan’s economic future. Without these changes, the “missed engine of growth” will remain exactly that: missed.
