TWO days after the federal budget was announced by the finance minister, the World Economic Forum’s Global Gender Report 2025 revealed that Pakistan was ranked last amongst 148 countries.

This is an absolutely extraordinary situation for Pakistan and its women, especially when these findings disclosed that this score had actually deteriorated consecutively over the last two years showing a continuous and consistent downward trend in the gender parity ratio.

Since this information was revealed after the finance minister’s budget speech, he could be forgiven for not knowing about the dismal status of women in Pakistan — although in one of his press conferences he did say that he had been aware of the state of Pakistan’s economy for the last 11 years or so. How anyone can be aware of Pakistan’s economy and not know of the status of its women is difficult to imagine.

While the finance minister could have feigned ignorance about the deteriorating status of women in Pakistan, he certainly knew about the recent data from the World Bank regarding Pakistan’s poverty rate. This data has revealed that nearly half of Pakistan’s population is below an internationally comparable poverty line. Importantly, here again data shows that the population under each poverty line has increased over the last few years, implying that poverty is growing despite claims that the economy has ‘improved’.

And for those in extreme poverty in Pakistan, the numbers have actually increased by more than threefold, from under five per cent to 16.5pc. Again, the ‘direction of travel’ — a term used by the finance minister to reassure us that the economy is improving — clearly and alarmingly shows it is headed downwards.

Almost every commentary on and appraisal of the recent budget has been either critical and negative, or an outright rejection. Analysts and commentators from differing persuasions have pointed out that this budget is a poor reflection of where the economy is and, more importantly, of the direction of travel needed over the next few years.

Given the huge array of numbers and accounting identities in the budget document, it is best to identify just a handful to underscore the complete disregard towards the people of this country.

Poverty is not just visible, it is also growing despite all claims that the economy has stabilised and improved.

Pakistan has a particularly poor savings rate of just 14pc, one reason why the investment-to-GDP ratio continues to be much lower than comparable countries. China’s savings rate is 44pc, India’s 29 and Bangladesh 25, much of which explains high investment, and hence growth, in these countries.

Savings need to be encouraged in order for growth, and not have an additional tax imposed raising the tax from the already very high 15pc to 20. The climate crisis is probably Pakistan’s most urgent potential catastrophe already unfolding and all measures to reverse such trends need to be at the top of the agenda for every government. The 18pc sales tax imposed on solar panels is anti-people and anti-environment, and perhaps some pressure has prevailed to lower this to a still unacceptable 10pc.

With poverty not just visibly evident but growing despite all claims that the economy has stabilised and improved, even a symbolic increase in raising the minimum wage in Pakistan would have shown that the finance minister was aware of the poor state of the people. While the salaries of government servants were increased by 10pc and those of parliamentarians and ministers many times that, perhaps increasing the Rs37,000 minimum wage to at least Rs45,000 would have brought some cheer to an over-taxed budget.

Tax, tax and more tax — this has been the mantra of this and every government when the budget is made under the tutelage of the IMF. Tax everything which is productive so that people emigrate and feel disheartened to expand and innovate.

On the one hand, the government dreams of IT exports of $25 billion over the next few years; on the other, it taxes freelancers and those who are actually innovating and bringing much-needed foreign exchange at a time where remittances exceed all exports. Such contradictory and counterproductive measures bode ill for Pakistan. If tax is the major concern, perhaps income and wealth taxes on retail, real estate and agricultural incomes would have been more appropriate. The imperative is to tax those who don’t pay, or avoid paying income tax, not those who continue to be over-taxed.

The other contradictions galore in the budget pertain to the knowledge economy. The federal higher education budget has fallen in real terms over the last few years, and the removal of the 25pc tax rebate given to teachers and researchers — many (possibly a majority) of whom may be women — in colleges and universities, has been removed.

With manufacturing and agriculture all showing negative growth — the ‘direction of travel’ here being downwards — the discouragement for the knowledge economy, for IT, and especially for women, stands out as a callous and an unsympathetic effort by someone who claims to know the economy for a dozen years.

In many years, if not decades, Pakistan is in a particularly fortunate space.

The military and civilian governments are no longer on the ‘same page’, but are one and indistinguishable from each other. The economy has indeed stabilised and inflation has fallen. Political opposition for now is in disarray and even the government is more stable than it has ever been. Surprisingly, for once Pakistan is being seen in a very positive light internationally with President Donald Trump praising Pakistan at the expense of India, and even having lunch with Pakistan’s field marshal.

Such a fortuitous combination is unprecedented. For precisely these reasons, for once, Pakistanis anticipated a brave, bold, imaginative, creative, future-oriented budget, which would ensure that the direction of travel would be aggressively upwards.

Sadly, this budget is distinctly anti-growth and anti-poor — for both women and men — and reflects very poorly on the how the future is being imagined. If ever there was a wasted opportunity, it is now.

The writer is a political economist and heads the IBA, Karachi. The views are his own and do not represent those of the institution.

Published in Dawn, June 21st, 2025