Experts Warn Against Pakistan’s Infrastructure Spending Trap
News Desk
Islamabad: Pakistan’s development strategy is facing a critical rethink as fiscal constraints force the country to confront a difficult question: how can it invest in education, health, and human development when debt pressures continue to limit public spending?
This question dominated a closed-door policy roundtable in Islamabad titled “Fiscal Choices, Human Consequences: Pakistan’s Development Budget in Focus,” hosted by Globesight at the Serena Hotel.
The discussion brought together senior government officials, economists, representatives of multilateral organizations, think tanks, and development sector stakeholders to examine the future of Pakistan’s development spending amid tightening fiscal conditions.
The dialogue came against the backdrop of Pakistan’s FY2026-27 budget, which places a strong emphasis on fiscal consolidation as the government seeks short-term economic stability amid mounting debt servicing obligations.
However, participants warned that continued reductions in development spending risk undermining long-term growth unless spending priorities and execution mechanisms are fundamentally reformed.
Experts at the roundtable argued that Pakistan’s development challenge is not only about the availability of funds but also about how effectively resources are allocated, implemented, and measured for impact.
“Pakistan appears caught in a brick-and-mortar trap: too much development spending remains tied to infrastructure, old throw-forward liabilities, and allocations that are not fully utilized,” said Hasan Hanif, Partner at Globesight and moderator of the discussion.
Participants stressed that the country must move away from measuring development success through budget allocations alone and instead focus on measurable outcomes.
“When the national budget comes out, everyone looks at the allocations for their favored sector. What we should do instead of looking at allocations is build accountability around outcomes,” said Jaffer Askari, Senior Economist at the World Bank.
The discussion also highlighted challenges created by fragmented planning and weak coordination between federal and provincial governments, particularly after the 18th Amendment, which transferred key responsibilities including education, health, and population planning to provinces.
Dr Kaiser Bengali, noted economist, called for a stronger provincial planning framework, saying that provinces must establish their own planning commissions to design effective development strategies and assess priorities through credible feasibility studies.
“Pakistan needs to follow a growth-centered approach for its development strategy. Now that we have devolution through the 18th Amendment, provinces must also create their own planning commissions that can manage and create their feasibilities around each development priority,” he said.
Experts also challenged the traditional classification of spending on education, health, and nutrition as merely social welfare programs, arguing that these sectors are central to economic productivity.
“We tend to treat education, health, and nutrition programs as social spending. We need to move away from this paradigm and treat these as productive expenditures, not just welfare or development expenditures,” said Dr Khadija Bari, Associate Professor at IBA.
The roundtable examined whether Pakistan’s persistent development gap stems primarily from inadequate resources, inefficient spending, poor implementation capacity, or institutional fragmentation.
Participants agreed that improving development outcomes requires stronger accountability systems, better alignment between federal and provincial priorities, and a shift toward human capital investment.
The discussion is part of Globesight’s ongoing engagement with policymakers and development partners across South Asia aimed at promoting evidence-based and human-centered fiscal policy. The organization said it will release further recommendations emerging from the dialogue in the coming weeks.
