Experts Call for Broad Economic Reforms and Expansion of Islamic Banking in Pakistan
Imran
Karachi, Comprehensive economic reform in Pakistan cannot be achieved by focusing on a single sector alone, said Dr Ishrat Hussain, while speaking at a discussion on the country’s financial and economic challenges on the second day of the 17th Karachi Literature Festival, being held at the Beach Luxury Hotel.
According to him, “It is unrealistic to focus on one sector and expect overall change. Real transformation requires simultaneous reforms across all sectors, not just banking.”
Speaking on the future of banking in Pakistan, Arif Habib said that all banks are now exploring the option of opening Islamic banking windows, reflecting the growing demand for Shariah-compliant financial services.
Arif Habib also highlighted serious weaknesses in Pakistan’s export sector. He said export performance remains very poor, partly because the country lacks sufficient product diversification and competitiveness. He pointed out that high energy prices in Pakistan significantly increase production costs, making local products less competitive in the international markets.
“To reduce energy prices, consumption must increase. Interest rates should be brought down to single digits, and taxes must also be reduced,” he said, adding: “Unless these issues are addressed, we cannot expect either domestic or foreign investment.”
Commenting on the global financial system, Arif Habib expressed concern over the limited space available for implementing a fully Islamic economic model.
“It is deeply disheartening that the current global order leaves little room for the full implementation of an Islamic system,” he said, adding: “International financial structures and economic interdependence restrict Muslim countries from operating entirely according to Islamic principles.”
He said all groups included in the consortium are successful businesses that are entirely equity-based, with no reliance on loans. He emphasised that all operations within the consortium will be conducted in accordance with the Islamic principles. When the Fauji Foundation joined the consortium, it made it a clear condition that all activities must be fully Shariah-compliant.
The speakers agreed that meaningful economic progress in Pakistan requires coordinated reforms, lower costs of doing business, policy consistency, and a stronger focus on competitiveness and financial inclusion.
