Pakistan’s story is essentially the same as that of any struggling pre-industrial economy. Without meaningful land reforms, there can be no sustainable growth. Despite the abundance of cultivable land, yields are surprisingly low and static. We only take failures from the mouths of success.

Pakistan’s economy was actually doing well during the height of the pandemic. According to the current Normalcy Index produced by The Economist to assess countries based on their reaction to the pandemic, Pakistan ranks third in the world, after Hong Kong and New Zealand. Despite COVID, Pakistan’s economy grew by 3.9% last year and is predicted to increase by 4.6% next year. Pakistan’s dollar-denominated Eurobonds were over two times oversubscribed after receiving a favorable response from investors due to the economy’s better-than-expected growth in the last 9 to 10 months.

Things changed as the country dealt with the fallout of a change in government. Pakistan has prevented an economic catastrophe equal to what happened in Sri Lanka by quelling unrest and paying creditors. However, after entering office in April, Prime Minister Shahbaz Sharif’s coalition government has faced numerous political and economic challenges.

The Pakistani rupee is one of the poorest performing currencies in the world, its foreign exchange reserves are pitiful, and it has been unable to draw in crucial foreign investment. In order to service its external debt, the government will have to pay $21 billion to foreign creditors over the course of the upcoming fiscal year. The nation is currently experiencing a severe economic crisis amid political unrest and instability. If appropriate policy decisions and corrective policy measures are not made, the country could experience a default and a crisis similar to that in Sri Lanka, which would have significant effects on employment, growth, and inflation which would impact vulnerable populations. To reinstate the IMF programme and avoid an economic default, Pakistan is left with no choice except to agree to stringent IMF requirements.

Domestic political unrest and heightened vulnerability to terrorism as a result of the Taliban’s control of Afghanistan is worsening the country’s challenges. Imran Khan’s four-year reign has split Pakistani society. Khan’s assertions that his removal via a parliamentary vote of no confidence organized by Washington, with assistance from the military, has caused deep wounds in the country.

Pakistan desperately needs to get back on track with an International Monetary Fund credit programme, both to address its immediate balance-of-payments problems and to ensure long-term economic stability. The political atmosphere makes it difficult to implement difficult economic decisions, such as removing subsidies and raising taxes.

Pakistan’s current dilemma is the result of decades of risky policy decisions. Pakistan’s sole focus on India as an external threat has resulted in decades of unsustainable military expenditure that relied on foreign, traditionally American, support.

Pakistan’s Afghan policies, as well as its support for Islamic terrorist groups attacking India, have also resulted in a loss of Western assistance. Unable to produce cash through taxes and economic expansion, Pakistan has often sought budgetary assistance from multilateral institutions or friendly governments in the Middle East and Beijing. Pakistan’s economy is still strongly dependent on cotton textile exports despite little money being spent on diversification. The lowest rate in South Asia is 52%.

A large portion of the nation’s unskilled labor force migrates to the Gulf region and sends remittances back home. A crucial economic sector like agriculture and some military-run businesses are excluded from paying income taxes in Pakistan, which has one of the lowest tax rates per GDP in the world. Governments have kept giving out subsidies rather than raising money through taxes in order to prevent political and social unrest.

Underneath the fierce ongoing political tug of war in Pakistan, the basics of the system remain the same. What matters for political success is if you have the military’s support. Political parties now openly criticize military meddling in politics but only when they are in the opposition. When they are in power, they do little to resist it. This was true when Khan’s party was in power, and it is true now under Sharif’s government.

Pakistan’s rising political unrest is ultimately a result of opportunistic power grabs. It has made the nation’s politics a political tinderbox. And none of this accounts for the ongoing suffering of ordinary Pakistanis, who continue to bear the brunt of the nation’s protracted political unrest.

Yes, Pakistan is still not out of the woods and has countless challenges, but its future is quite promising. In fact, in relation to the rest of the world, it is performing better than expected.