You can’t print molecules

A phrase is making the rounds in global financial markets that Pakistan’s policymakers would do well to memorize. Surprisingly, it does not come from an economist or from an IMF technical note, but from Jeff Currie of the Carlyle Group, one of the world’s largest private equity and investment firms: you can’t print molecules. 

It sounds deceptively simple. In fact, it cuts to the heart of the intellectual framework that has governed Pakistan’s economic policy for more than three decades.

What Pakistan was told to prepare for was a world of open markets, integrated supply chains, and price signals that efficiently allocated resources across borders. Liberalize. Privatise. Trust the market. The assumption was that the global system was essentially neutral — that goods, capital, and energy would find their way to wherever they were most productively deployed. Pakistan dutifully followed much of this advice but found itself, again and again, holding the bill when those assumptions fell apart.

The recent conflict in the Middle East has demolished these assumptions once again. We are not witnessing a market failure in the technical sense. It is something older and more elemental— the return of force as the organizing principle of international economic life. When there is no referee willing or able to enforce the rules, economic dependencies can be turned into weapons just as effectively as any military asset, the textbook stops being useful.

China has weaponized rare earth minerals. The United States has weaponized dollar finance. Iran has weaponized the Strait of Hormuz. Iran’s parliamentary speaker even borrowed Currie’s phrase to taunt Washington directly, pointing out that no amount of financial pressure can conjure fuel at the pump if the physical supply chain is severed. The Strait of Hormuz, he noted, does not care about software.

Pakistan imports a substantial share of its energy, pays for it in dollars it must earn or borrow, and has spent years caught in a grinding cycle of price shocks, subsidy expansion, fiscal deterioration, and emergency IMF programs. Whenever global energy prices surge — as they did so after 2022 — the pressure on Pakistan’s current account, its foreign exchange reserves, and its fiscal position builds immediately.

The standard prescription has never changed: pass the cost on to consumers. Let the price signal work. Remove the subsidy. It is not economically unsound advice. But it was written for conditions that no longer exist. Raising the price of fuel for a Karachi rickshaw driver who has no alternative transport, no savings to fall back on, and no access to social protection is not a market correction. It is the state transferring its pain to the people least able to bear it. And, once that pain reaches a breaking point, it does not stay economic. It turns into a social crisis. It becomes the kind of crisis that makes the original fiscal problem look almost manageable.

Pakistan needs to stop being surprised by energy crises. That means tracking the indicators that matter before things go wrong.

Dr. Aqdas Afzal

So what should Pakistan actually do?

First, rationing deserves to be taken seriously again as a policy tool. When fuel is a necessity and substitutes do not exist, price cannot carry the full weight of allocation. A time-limited rationing framework paired with direct transfers is an honest reckoning with what markets cannot do on their own.

Second, BISP needs to move at the speed of an energy shock, not a government decision. An automatic trigger releasing enhanced transfers the moment prices cross a defined threshold would close the dangerous gap between when people are hurt and when help arrives.

Third, building renewable energy at home is not climate policy. It is national security. Solar and wind on Pakistani soil cannot be sanctioned or cut off by a conflict on the other side of the world.

Fourth, how Pakistan handles its dollar exposure needs serious rethinking. Real import cover is what separates a country with choices from one that has to beg. Countries with genuine reserves maneuver. Those without, negotiate from weakness.

Fifth, Pakistan needs to stop being surprised by energy crises. That means tracking the indicators that matter— import cover, subsidy costs, household energy bills, fiscal trajectory — before things go wrong, not while they are already unraveling.

The countries that survive this era in reasonable shape will not be the ones with the most sophisticated economic models. They will be the ones that know where their energy comes from, have thought through what happens when it is disrupted, and have built the capacity— institutions, infrastructure and people— to respond.

The molecule was always at the center for Pakistan. For too long, we only convinced ourselves that it was not.

—The writer completed his doctorate in economics on a Fulbright scholarship.

X: @AqdasAfzal