Pakistan’s economy remains trapped in familiar cycles, from current account deficits, debt crises to IMF bailouts, and recurring promises of reform repeated umpteen times. Whilefiscal and monetary adjustments dominate public debate, the structural roots of Pakistan’s economic stagnation run much deeper. There are complex multi-dimensional issues but one key aspect which does not get much attention is that the country’s development strategy continues to prioritize large corporates and capital-intensive projects while sidelining small and medium enterprises (SMEs) which are the real drivers of innovation, jobs, and inclusive growth in most advanced economies. In the following paragraphs I will discuss why this is so and what can be done to change this model.

The Structural Bias Toward Big Business

For decades, successive governments have viewed mega-projects as symbols of national progress with mining ventures like Riko Diq, large energy plants, and CPEC infrastructure as some examples of this phenomenon. While these projects are appreciated for attracting foreign capital, they have limited linkages with local industries, do not build domestic supply chains and play a minimal role in job creation. Pakistan’s heavy reliance on foreign-funded mega-projects is a symptom of short-term economic management rather than long-term strategy.

While large mega projects may improve infrastructure and generate additional tax revenues, they often come at the cost of government subsidies. Furthermore, they do little to strengthen the domestic industrial base. It’s not that these projects shouldn’t be pursued, but rather what should be prioritized.

The Missing Middle in Pakistan’s Economy

In contrast, SMEs provide the connective tissue of an economy, enabling productivity, creating jobs in the communities where they operate and providing social mobility for entrepreneurs and their families when the business is successful.

The real growth multiplier lies in empowering hundreds of thousands of SMEs, enterprises that reinvest profits locally, employ from within communities, and build resilient domestic........

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