Bajwa pledges to improve Pakistan's hockey fortunes
Bajwa Pledges to Improve Pakistan's Economy: The Military's Deepening Role from 2019 to 2026
Let's be honest: when a country's army chief feels compelled to publicly pledge that the military will "fully support" efforts to revive the economy, you know things are serious. In May 2019, General Qamar Javed Bajwa, Pakistan's Chief of Army Staff, did exactly that. Addressing a gathering of business leaders and officials, Bajwa declared that the Pakistan Army would "play its role" in economic revival, acknowledging that economic stability was the "foremost challenge" facing the nation. "We must ensure that we have a robust economy," Bajwa said. "The army is fully committed to supporting the government's efforts." It was a statement that, in any other democracy, would have raised eyebrows. But in Pakistan—a country where the military has long wielded immense political and economic power, and where the army chief's words carry the weight of a de facto head of state—the pledge was both reassuring and revealing. It signaled that the country's most powerful institution was throwing its weight behind the civilian government's economic agenda. And it also underscored the uncomfortable reality that Pakistan's economy could not be revived without the military's active participation.
Fast forward to 2026, and Pakistan's economic trajectory has been a rollercoaster of bailouts, reforms, and persistent structural challenges. The country has navigated multiple International Monetary Fund (IMF) programmes, grappled with soaring inflation and a plummeting rupee, and witnessed an unprecedented expansion of the military's formal role in economic decision‑making. General Bajwa, who retired in November 2022, left behind a legacy of deep military involvement in economic affairs—a legacy that his successor, General Asim Munir, has not only maintained but expanded. Today, serving and retired military officers occupy key positions in economic institutions, from the Special Investment Facilitation Council (SIFC) to the boards of major state‑owned enterprises. The military's commercial empire—spanning real estate, manufacturing, banking, and agriculture—has grown to an estimated $30 billion in assets, making it one of the largest economic actors in the country. And the debate over whether the military's economic role is a necessary stabilising force or a fundamental obstacle to genuine reform continues to define Pakistan's political economy. This is the story of how Pakistan's army went from pledging to support the economy to becoming its most powerful steward—and what that means for the country's future.
"We must ensure that we have a robust economy. The army is fully committed to supporting the government's efforts to revive the economy."
The 2019 Pledge: An Unusual Promise in Unusual Times
To understand why Bajwa's 2019 pledge was so significant, you have to understand the economic context of Pakistan at the time. The country was in the grip of a severe balance‑of‑payments crisis. Foreign exchange reserves had dwindled to barely two months of import cover. The rupee had depreciated sharply, losing nearly half its value against the dollar over the preceding two years. Inflation was rising, and growth was slowing. The newly elected government of Prime Minister Imran Khan had been forced to turn to the IMF for a $6 billion bailout package, the 13th such programme in Pakistan's history. The terms of the bailout—tax hikes, energy price increases, and a market‑determined exchange rate—were deeply unpopular and threatened to exacerbate the economic pain for ordinary Pakistanis.
It was against this backdrop that Bajwa made his remarks. Speaking at a seminar on the economy, the army chief said the military was "ready to extend full support" to the government's efforts to strengthen the economy. He acknowledged that "economic stability is the foremost challenge" and called for "a whole‑of‑nation approach" to address it. The comments were widely interpreted as a signal to the business community, international lenders, and the Pakistani public that the military was aligned with the government's reform agenda—and that it would use its considerable influence to ensure that agenda was implemented. "The army chief's statement was a big deal," said one Pakistani economist. "It told everyone—the IMF, foreign investors, local businesses—that the military was on board. In Pakistan, that's often the difference between a policy that sticks and one that gets derailed."
But Bajwa's pledge also hinted at something deeper. The army had long been a major economic actor in its own right, through a network of foundations, trusts, and commercial enterprises that spanned sectors from cement and fertiliser to banking and real estate. The Fauji Foundation, the Army Welfare Trust, the Shaheen Foundation, and the Defence Housing Authority collectively employed hundreds of thousands of people and generated billions of dollars in revenue. Bajwa's promise to "support" the economy was not just about the army's coercive power to enforce austerity or suppress dissent. It was also about the army's capacity to invest, to build, and to partner with private capital. In the years that followed, that capacity would be deployed on an unprecedented scale, as the military positioned itself as the indispensable partner for economic development in Pakistan.
The IMF Merry‑Go‑Round: Bailouts, Conditions, and the 2026 Programme
If there is a constant in Pakistan's economic story over the past seven years, it is the International Monetary Fund. The 2019 $6 billion Extended Fund Facility (EFF) was supposed to stabilise the economy and put it on a path to sustainable growth. It did stabilise the economy—foreign reserves recovered, the current account deficit narrowed, and the rupee stabilised—but the underlying structural problems remained. Tax collection remained abysmally low, with Pakistan's tax‑to‑GDP ratio hovering around 10%, one of the lowest in the world. State‑owned enterprises continued to bleed billions of rupees annually. The energy sector's circular debt—a vicious cycle of unpaid bills between power producers, distributors, and the government—kept ballooning. And the political instability that followed Imran Khan's ouster in April 2022 further complicated the reform effort.
The 2019 programme expired in 2023, and Pakistan was quickly back at the IMF's door. A nine‑month $3 billion Stand‑By Arrangement (SBA) was secured in July 2023, followed by a longer‑term $7 billion EFF in September 2024. Each programme came with the familiar conditions: raise taxes, cut subsidies, privatise loss‑making state enterprises, and let the market determine the exchange rate. And each programme was met with the familiar pattern of initial compliance, followed by backsliding as political pressures mounted. The 2024 programme, which is still ongoing in 2026, has been particularly contentious. The government has raised electricity and gas prices repeatedly, pushing inflation above 30% at its peak in 2025 and sparking widespread protests. Tax collection has improved—the tax‑to‑GDP ratio has crept up to 12%—but remains well below the levels needed to fund essential services and reduce the debt burden. And the rupee, after a period of stability, has once again come under pressure as import demand has picked up and export growth has lagged.
As of April 2026, Pakistan is in the midst of its 24th IMF programme, with a $7.5 billion Extended Fund Facility approved in March. The conditions are familiar: broaden the tax base, reduce energy subsidies, and implement structural reforms to boost productivity and exports. The government of Prime Minister Shehbaz Sharif—who returned to power in the February 2024 elections—has pledged to comply, but the political costs are mounting. Inflation, while down from its peak, remains in double digits. Unemployment is high, and real wages have been stagnant for years. And the public's patience with austerity is wearing thin. "We are in a constant state of crisis management," said one Pakistani economist. "We lurch from one IMF programme to the next, never addressing the underlying issues. Until we do, we'll keep having this conversation."
The Military's Expanding Economic Footprint: From SIFC to the Boards
If the IMF programmes represent the external face of Pakistan's economic management, the military's deepening involvement represents the internal one. The most visible manifestation of this trend is the Special Investment Facilitation Council (SIFC), a civil‑military body established in June 2023 to attract foreign investment, particularly from Gulf countries. The SIFC is chaired by the prime minister and includes the army chief, the federal ministers for finance and planning, and the provincial chief ministers. It has the authority to fast‑track investment approvals, bypass bureaucratic red tape, and provide sovereign guarantees. In effect, it is a parallel economic decision‑making structure, one that gives the military a direct, formal role in shaping investment policy.
The SIFC was created in response to a specific problem: Gulf investors, particularly from Saudi Arabia, the UAE, and Qatar, had expressed interest in Pakistani assets—ports, mines, agricultural land, and energy projects—but were wary of the country's bureaucratic hurdles and political instability. The SIFC was designed to provide the "one‑window" clearance and the security guarantees that these investors demanded. The results have been mixed. Several high‑profile deals have been announced: a Saudi investment in the Reko Diq gold and copper mine, a UAE commitment to develop port facilities in Karachi, and Qatari interest in agricultural land. But the actual inflows have been slower than anticipated, hampered by global economic uncertainty, legal challenges, and lingering concerns about Pakistan's political stability. The SIFC's most significant achievement to date may be the UAE's $3.5 billion deposit rollover with the State Bank of Pakistan, a crucial lifeline that helped stabilise foreign reserves.
Beyond the SIFC, the military's economic footprint has expanded in more subtle ways. Serving and retired military officers now occupy key positions across the economic bureaucracy. The chairman of the Federal Board of Revenue (FBR), the country's top tax collection agency, is a retired lieutenant general. The heads of major state‑owned enterprises—Pakistan International Airlines, Pakistan Steel Mills, and the National Highway Authority—are often retired military officers. Provincial administrations in Balochistan and Khyber Pakhtunkhwa have placed retired officers in charge of development projects. The military's commercial empire continues to grow. The Fauji Foundation's revenues exceeded $2 billion in 2025, making it one of the country's largest conglomerates. The Defence Housing Authority has expanded into new cities, its real estate developments commanding premium prices. And the army's involvement in agriculture, through the Military Farms Directorate, has positioned it as a major player in the sector.
Critics argue that the military's expanding economic role is both a symptom and a cause of Pakistan's governance failures. "When civilian institutions are weak, the military fills the vacuum," said one political analyst. "But that very process weakens civilian institutions further. It's a vicious cycle." The military, for its part, defends its role as a necessary stabilising force. "We are not in business to make profits," one senior officer told a journalist. "We are in business to support the economy and provide services that the civilian government cannot or will not provide." The truth, as is often the case in Pakistan, lies somewhere in between. The military's economic power is both a source of stability—providing a backstop against complete institutional collapse—and a fundamental obstacle to the development of robust, accountable civilian governance.
Timeline: Pakistan's Economic Milestones, 2019‑2026
| Date | Event | Significance |
|---|---|---|
| May 2019 | Gen. Bajwa pledges military support for economic revival | Signaled military alignment with government's IMF reform agenda. |
| July 2019 | Pakistan enters 39‑month, $6 billion IMF Extended Fund Facility | 13th IMF programme; aimed at stabilising balance of payments. |
| April 2022 | Imran Khan ousted as Prime Minister | Political instability disrupts reform momentum. |
| November 2022 | Gen. Bajwa retires; Gen. Asim Munir becomes army chief | Continuity in military's economic role under new leadership. |
| June 2023 | Special Investment Facilitation Council (SIFC) established | Civil‑military body to fast‑track foreign investment, especially from Gulf. |
| July 2023 | Pakistan secures $3 billion IMF Stand‑By Arrangement | Short‑term bailout to avert default. |
| February 2024 | Shehbaz Sharif elected Prime Minister | Return of PML‑N government; renewed engagement with IMF. |
| September 2024 | Pakistan enters $7 billion IMF Extended Fund Facility | Longer‑term programme with deeper structural reforms. |
| 2025 | Inflation peaks above 30%; widespread protests | Austerity measures fuel public discontent. |
| March 2026 | Pakistan enters $7.5 billion IMF Extended Fund Facility | 24th IMF programme; continuing cycle of bailouts. |
The 2026 Outlook: Austerity, Gulf Investment, and the China Card
As of April 2026, Pakistan's economic outlook is cautiously optimistic—but the emphasis is on "cautiously." The IMF programme is on track, with the government meeting most of its quantitative targets. Inflation has fallen from its peak but remains in double digits, eroding household purchasing power. The current account deficit is manageable, thanks to remittances from overseas Pakistanis and import controls that have suppressed demand. Foreign reserves stand at around $12 billion, providing about three months of import cover—a fragile but not catastrophic buffer. The SIFC continues to court Gulf investors, with several large‑scale projects in the pipeline, but actual inflows have been slower than hoped. And the China‑Pakistan Economic Corridor (CPEC), the flagship project of the Belt and Road Initiative, has entered a new phase focused on industrial cooperation and agricultural modernisation, moving beyond the infrastructure projects of the early years.
The biggest challenges remain structural. The tax base is too narrow; only about 2% of Pakistanis file income tax returns. State‑owned enterprises continue to lose money, with the power sector's circular debt now exceeding Rs 2.5 trillion ($9 billion). Exports are concentrated in low‑value textiles and have stagnated for years, leaving the economy vulnerable to external shocks. And the political environment remains unstable, with the opposition—led by Imran Khan's Pakistan Tehreek‑e‑Insaf (PTI)—regularly challenging the government's legitimacy. The military's role, while providing a measure of stability, also complicates the picture. "The SIFC and the army's economic involvement are a double‑edged sword," said one economist. "They can deliver results when civilian institutions can't, but they also undermine those institutions and create parallel structures that are not accountable to the public."
For ordinary Pakistanis, the economic pain of the past seven years has been relentless. Inflation has eroded savings, unemployment has made it harder for young people to find jobs, and the constant cycle of austerity and bailouts has bred a deep cynicism about the country's direction. And yet, there is also resilience. The informal economy continues to hum, providing livelihoods for millions. Remittances from overseas Pakistanis remain a vital lifeline. And the country's demographics—a young, growing population—represent a potential demographic dividend if the right policies are put in place. "Pakistan is not a failed state," one analyst noted. "It's a struggling state. The question is whether it can struggle its way to a better future, or whether it will remain trapped in this cycle of crisis and bailout." The answer, as always, will depend on the choices made by the country's leaders—both in uniform and in civilian clothes. And on whether the pledge General Bajwa made in 2019 to "fully support" the economy translates, over time, into a genuine, sustainable transformation. The jury is still out.
Key Takeaways: Pakistan's Economic Journey, 2019‑2026
- Gen. Bajwa's 2019 pledge signaled military alignment with IMF‑led economic reforms: The army chief's statement reassured markets and signaled that the military would support the government's austerity agenda.
- Pakistan has been through four IMF programmes since 2019: The $6 billion EFF (2019‑2023), $3 billion SBA (2023), $7 billion EFF (2024‑2026), and the current $7.5 billion EFF (2026‑). Each has required painful austerity measures.
- The Special Investment Facilitation Council (SIFC) institutionalised the military's economic role: Established in 2023, it gives the army a formal seat at the table for attracting foreign investment, particularly from Gulf states.
- The military's commercial empire is estimated at $30 billion in assets: Foundations, trusts, and enterprises in real estate, manufacturing, banking, and agriculture make the army one of Pakistan's largest economic actors.
- Retired military officers occupy key economic positions: The FBR chairman, heads of major SOEs, and provincial development officials often come from the armed forces.
- Inflation peaked above 30% in 2025, sparking widespread protests: Austerity measures, including energy price hikes, have imposed severe costs on ordinary Pakistanis.
- The 2026 outlook is cautiously optimistic but fragile: The IMF programme is on track, reserves are stable, and Gulf investment is slowly materialising. But structural problems—low tax collection, loss‑making SOEs, stagnant exports—remain unresolved.
- The military's economic role is both a stabiliser and a structural obstacle: It provides a backstop against institutional collapse but also undermines civilian governance and accountability.
Sources and Further Reading
- Dawn (2019): Army fully committed to supporting govt efforts to revive economy: COAS — Original coverage of Gen. Bajwa's 2019 pledge.
- The Express Tribune (2019): Economic stability foremost challenge, says COAS — Detailed report on Bajwa's remarks and the economic context.
- IMF: Pakistan Country Page — Official documents on Pakistan's IMF programmes, including the 2019 EFF, 2023 SBA, 2024 EFF, and 2026 EFF.
- Special Investment Facilitation Council (SIFC) — Official website detailing the council's mandate and projects.
- State Bank of Pakistan: Economic Data — Official statistics on inflation, reserves, exchange rates, and external accounts.
- Pakistan Institute of Development Economics: State of the Economy Reports — Annual assessments of Pakistan's economic performance and structural challenges.
- Federal Board of Revenue (FBR) — Tax collection data and analysis of Pakistan's narrow tax base.
- World Bank: Pakistan Overview — Data and analysis on Pakistan's economic development, poverty, and structural reforms.
- The News (2025): Pakistan's military economic empire: A $30bn behemoth — Investigative report on the army's commercial holdings.
- Reuters (2024): Pakistan's military tightens grip on economic policymaking — Analysis of the military's expanding role through the SIFC and other institutions.
- Brookings Institution (2025): Pakistan's Political Economy and the Military's Role — In‑depth analysis of the military's economic and political influence.
- CPEC and Gulf Investment Monitor — Tracking Saudi, UAE, and Qatari investments in Pakistan, including Reko Diq and port projects.
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