ISLAMABAD: Pakistan and the United Kingdom reaffirmed cooperation on economic reform and digital governance on Tuesday, with Finance Minister Muhammad Aurangzeb telling UK Minister for Development Baroness Chapman that stabilization efforts were now centered on tax expansion, debt control and restructuring state-owned enterprises.

Pakistan is working to widen its tax base, reduce leakages through digital systems and overhaul energy-sector losses as part of ongoing fiscal reform. The government is also pursuing privatization and pension restructuring to create fiscal space for social spending in a period of high external financing needs.

Aurangzeb “highlighted ongoing work on energy sector efficiencies, debt management, public-sector right-sizing, pension reform, and measures aimed at restoring fiscal sustainability and creating space for social sector priorities,” according to an official readout of the meeting released by the finance ministry. 

Chapman said the UK stood ready to support reform delivery through technical assistance, regulatory cooperation and digital transition tools aimed at simplifying compliance and improving transparency, the statement added. 

Chapman “reaffirmed the United Kingdom’s readiness to provide technical assistance, regulatory support, and capacity-building … particularly in digitalization, governance reforms, investment climate improvement, and ease of doing business.”

Talks also covered demographic pressures, provincial governance, climate resilience and women’s economic participation, areas both sides said needed coordinated financing and policy planning. The ministers further discussed aligning development spending with World Bank-supported programs and encouraging private-sector participation in reforms.