Even as Finance Minister Muhammad Aurangzeb assures that the IMF “cannot impose terms against Pakistan’s national interest” and envisions an “East Asia moment” of export-led expansion, the engines of that very growth remain idle. Industrial zones — the backbone of any export surge - are frozen under fiscal restraint shaped by IMF conditionalities.

A vision stalled

Pakistan’s industrial zones — once envisioned as engines of export-led growth and investment — now stand at a standstill. What began as a framework for industrial revival has become a casualty of fiscal austerity and external conditionalities.

Over the decades, Pakistan built an institutional foundation of industrial zones to attract investment, boost exports, create jobs, and integrate into regional and global value chains - while ensuring continuity of incentives and protection from arbitrary policy reversals.

Today, this vision has stalled at the intersection of fiscal orthodoxy and developmental necessity. Industrial zones are more than fenced parcels of land; they are instruments of structural transformation - linking foreign capital to domestic production and employment. Yet fiscal constraints have replaced strategic foresight.

While political leaders continue to promise new industrial partnerships abroad, the reality at home is stark: the creation of new zones has been effectively frozen under IMF directives, and the fiscal incentives that once attracted investors are now uncertain and contested.

IMF’s fiscal grip

The IMF’s latest programme binds Pakistan to strict revenue targets and a gradual withdrawal of “tax expenditures.” In practice, this means curtailing tax holidays, exemptions, and rebates - the very tools that make industrial zones competitive. To........

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