Pakistan to Declare 2026 ‘Year of Reform’: Iqbal

APP

Islamabad: As Pakistan grapples with the aftermath of yet another devastating flood season, Federal Minister for Planning, Development and Special Initiatives Professor Ahsan Iqbal painted a complex picture of loss and resilience — a nation reeling from destruction yet showing early signs of economic stability and reform.

Addressing a press conference in Islamabad, the minister revealed that the recent floods claimed more than 1,000 lives and caused damages estimated at Rs822 billion (approximately $2.9 billion). The calamity, he said, destroyed homes, infrastructure, and essential public services across several provinces.

“This is an estimate of damages, not the total economic losses,” Iqbal clarified, noting that a detailed Post-Disaster Needs Assessment (PDNA) was underway to evaluate the full economic impact.

The Scale of Destruction

According to the initial flood damage assessment report, the agriculture sector suffered the most, with losses estimated at Rs430 billion, followed by infrastructure damage amounting to Rs307 billion.

A total of 312,000 houses were affected nationwide — the majority in Punjab (213,000), followed by Balochistan (6,370), Khyber Pakhtunkhwa (3,222), Azad Jammu and Kashmir and Gilgit-Baltistan (3,677), and Sindh (332).

The floods also damaged 2,811 kilometres of roads, 2,200 educational institutions, and 250 health facilities, in addition to impacting 866 water infrastructure systems.

The livestock sector lost over 2,200 animals, while major crops such as cotton, rice, and sugarcane were hit hard — with 3.4 million bales of cotton, one million tonnes of rice, and between 1.3 to 3.3 million tonnes of sugarcane destroyed, depending on local drainage conditions.

A Nation Tested but Unbroken

Despite widespread devastation, Ahsan Iqbal emphasized that the economy was showing early signs of recovery and resilience. He highlighted that Consumer Price Index (CPI) inflation dropped to 4.2% in the first quarter of FY2025–26, compared to 9.2% during the same period last year.

“The improvement in inflation and market performance is a sign that Pakistan’s economic fundamentals are stabilizing,” the minister said.

According to him, FBR tax collection increased by 12.5%, reaching Rs2,884 billion, while the Pakistan Stock Exchange (PSX) hit an all-time high of 169,000 points on October 3 — a reflection of renewed investor confidence.

Further positive indicators include a 19.5% rise in credit to the agriculture sector, which reached Rs404 billion, and a 16% increase in private sector credit, rising to Rs9.9 trillion. Remittances from overseas Pakistanis also climbed by 8.4%, totalling $9.5 billion in the first nine months of the fiscal year.

Rebuilding Through Development and Reform

The minister detailed the government’s Public Sector Development Programme (PSDP) progress, noting that Rs155 billion had been authorized between July and September, of which Rs63 billion had been disbursed. PSDP spending, he added, grew by 16%, while allocations for foreign-aided projects rose by 23%.

Nine key projects — three approved by the Central Development Working Party (CDWP) and six by the Executive Committee of the National Economic Council (ECNEC) — are expected to generate 166,000 jobs.

“The Ministry has achieved its target of 100 percent project monitoring to ensure timely execution,” Iqbal said.

CPEC Phase 2 

Highlighting Pakistan’s expanding partnerships, the minister confirmed that Phase 2 of the China-Pakistan Economic Corridor (CPEC) has officially begun. Following the 14th Joint Cooperation Committee (JCC) meeting in China, both sides agreed to immediately begin the upgradation of the Karakoram Highway, with 85% of financing provided by Beijing.

He also announced enhanced cooperation with China’s Hunan Province, aimed at increasing provincial-level engagement in CPEC projects.

On the diplomatic front, Ahsan Iqbal praised Pakistan’s role in facilitating a ceasefire in Gaza and supporting the release of Palestinian prisoners, saying that the country’s efforts were acknowledged internationally — including by US President Donald Trump.

He noted that Pakistan’s ties with Saudi Arabia and the United States have entered a new phase, citing a recent mutual defense agreement with Saudi Arabia as evidence of growing strategic trust.

2026 Declared ‘Year of Reform and Modernization’

In an ambitious forward-looking vision, Ahsan Iqbal announced that 2026 will be declared the “Year of Reform and Modernization.”

He said the government would launch a national reform agenda to overhaul governance, regulatory systems, and economic structures, which he described as outdated and ill-suited to a 21st-century economy.

“The frameworks we built 40 to 50 years ago cannot address today’s challenges,” he stressed. “We must break free from inefficiencies and the anti-business mindset that stifles our progress.”

The reform agenda, according to Iqbal, will rest on three pillars:

• Economic modernization
• Investment-friendly regulatory reform
• Citizen-centric governance

“These reforms will not just remain on paper or in speeches — they will become a national movement to redesign and re-energize our governance systems,” he concluded.