ISLAMABAD: Pakistan’s finance minister has said the country’s economic direction should be judged on “governance” and consistent policy rather than on its political configuration, arguing that investors primarily look for returns, stability and ease of doing business, not the civil-military balance of power.
His remarks come as Pakistan’s army has taken on a more expansive and public role in economic decision-making and trade diplomacy under Field Marshal Syed Asim Munir, who became army chief in late 2022. In one of the most prominent examples of this new engagement, Munir met US President Donald Trump at the White House in June, and according to the army’s statement, their discussion extended beyond security and counterterrorism to trade, energy, technology, cryptocurrency and critical minerals.
Munir met Trump again in September, this time with Prime Minister Shehbaz Sharif, seeking investment from US companies in agriculture, technology, mining and energy. A widely circulated photograph showed the army chief presenting a tray of rare Pakistani minerals and stones to the US president.
These high-level engagements sit within a broader civil-military structure centered on the Special Investment Facilitation Council (SIFC), established in 2023 to fast-track foreign investments. Although formally chaired by the prime minister, the army chief is a member of the SIFC’s apex committee and a serving general is its national coordinator. Most major investment files now pass through the council, which has led flagship deals including a $500 million rare-earths agreement signed in September between the army-run Frontier Works Organization and Missouri-based UA Strategic Metals.
Asked whether Pakistan’s economy was now “military-run,” Finance Minister Muhammad Aurangzeb reframed the issue through what he called “international benchmarks.”
“From my perspective, we have to think through some international benchmarks and what has worked for other countries and countries which have moved from Third World to First World,” the minister said in an interview to Arab News this month.
“Meritocracy, pragmatism, honesty … Pragmatism can be attributed to the scheme of governance … governance has to be led by some guiding principles, whether it’s a small corporate, small company, or the largest countries. Timely decisions, timely execution. And then whatever it takes.”
Asked if Pakistan’s ‘hybrid regime,’ in which elected civilian officials share key policy space with the powerful military, was an advantage when approaching foreign investors, the finance minister said investors primarily focus on returns and operational clarity.
“As far as the investors are concerned, they need to come in thinking through whether they a, can get the right returns in this country, and secondly, the ease of doing business, etc., so I think governance matters.
“Governance matters with respect to basic hygiene of how the economy is run and whether they can make returns, which can also be repatriated. That’s what they care about.”
In response to a question about political curbs, limits on dissent and media censorship — issues repeatedly raised by Pakistani and international rights groups — and whether they affected foreign investment and domestic entrepreneurship, Aurangzeb said stability was the key factor for investors worldwide.
“What matters is the overall stability in the country… We need to build our external and internal buffers to negotiate exogenous shocks. That’s what we need to focus on rather than the noise in the system.”
NATIONAL FINANCE COMMISSION REFORM
The finance minister also addressed proposed reforms to Pakistan’s National Finance Commission (NFC), the constitutional body that determines how federal tax revenue is divided between the center and the provinces every five years.
The issue has gained urgency amid discussions on a 28th Constitutional Amendment that could reshape how future NFC awards are calculated. Central to the debate is Article 160(3A), which guarantees that no province’s share can be reduced below what it received under the previous award. Provincial governments view the clause as essential for fiscal autonomy, while federal officials argue the strict protection limits the state’s ability to respond to rising population, mounting climate-related costs and the need to stabilize national finances.
Asked why the government wanted to amend Article 160, Aurangzeb said it would be “premature” to comment but noted that the president had already endorsed the composition of the next NFC — a constitutional requirement for naming the members of the commission — and the Finance Division had issued a formal notification to begin the process.
The inaugural session of the commission, initially planned for September but delayed due this year’s monsoon floods, would now take place in the coming weeks, the minister said, describing the commission as the constitutional forum where provinces and the center must negotiate both the “vertical” distribution between them and the “horizontal” allocation among provinces.
Aurangzeb said the next award would also need to consider structural pressures facing the country.
“I’ve been talking very consistently about two existential threats of Pakistan, one is population and the other is climate change,” he said, adding that additional allocation drivers such as backwardness and poverty levels would also require attention.
Pressed on whether a reformed NFC could be completed before the next budget, Aurangzeb declined to comment. Asked whether provincial shares should remain protected, he said all issues would be taken up within the existing framework agreed between the center and provinces.
He pointed to a “national fiscal pact” signed last year, under which federal and provincial governments committed to broad principles on revenue mobilization, expenditure responsibility and fiscal governance as an interim guide ahead of a new NFC award.
“We did sign on a national fiscal pact last year,” he said, “and it had all the aspects around revenue, expenditure, governance. And all of these are going to be part of our discussions on the NFC.”
