When Finance Minister Muhammad Aurangzeb recently reiterated Pakistan’s commitment to an export-led growth model, it echoed a familiar refrain — one that has defined Pakistan’s economic policymaking for decades. Yet in today’s geopolitical and domestic economic context, such a statement feels increasingly detached from ground realities. Pakistan’s export strategy, long touted as the engine of growth, is showing signs not just of fatigue but of fundamental obsolescence. Since US President Donald Trump began unilaterally imposing punitive tariffs — including a 29 percent duty on Pakistani goods — the vulnerabilities of our export-driven approach have grown more pronounced. Ironically, even as policymakers continue to champion exports, remittance inflows have quietly emerged as a more consistent and, at times, superior source of foreign exchange. In several months this year, they have even outpaced exports. Unlike exports, remittances come without a heavy import cost. Pakistan’s export sector, particularly textiles, is deeply import-dependent — relying on imported raw materials, chemicals, and machinery. Hence, any attempt to boost exports often results in a disproportionate increase in imports, leading to a widening trade deficit. The result is a vicious cycle: rising deficits followed by balance-of-payments crises, leading invariably to an IMF bailout. Pakistan is currently on its 24th program with the IMF, a staggering statistic that speaks volumes about our failure to break this cycle. Adding to this complexity is a scathing analysis from the IMF in its October 2024 country report. The Fund criticized Pakistan’s long-standing approach of intervening in price setting — from agricultural commodities to fuel and power tariffs — and offering high protection through both tariff and non-tariff barriers. These policies, while politically expedient, have stifled competition and trapped resources in inefficient, infant industries that never seem to grow up. The business sector has consistently failed to transform into an engine of productivity and exports. The IMF rightly noted that such incentives have weakened competition rather than bolstering it. Against this backdrop, the government has pledged MEFP submitted to the IMF to roll back fiscal incentives, avoid distortionary tax breaks, and ensure that the SIFC does not favor specific companies or sectors. This is a step in the right direction, but it comes with a caveat: can such a commitment withstand the lobbying pressures of entrenched interest groups ahead of the upcoming budget? Moreover, the issue goes deeper than incentives. Pakistan’s exports are often residual — surplus production sold abroad, not the output of export-dedicated industries. The time has come to accept that export-led growth, in its current form, is no longer a viable development path for Pakistan. A new model grounded in competitiveness, innovation, and institutional reform is needed. This means: Investing in human capital and technology to build globally competitive industries, enabling a market-driven exchange rate regime to reflect true export competitiveness, creating a predictable policy environment free from discretionary incentives, and reorienting fiscal policy towards productive public investment rather than subsidies. We should harness remittances more effectively as a development tool channeled through formal mechanisms, invested in small and medium enterprises, and supported with diaspora bonds or investment vehicles. The government must focus on building an export base that is efficient, self-sustaining, and not hostage to imports. The Finance Minister and the Governor of the State Bank must show the political will to implement it — even when it is unpopular. With reserves propped up by rollovers from friendly countries and global lenders growing impatient, the window for meaningful reform is rapidly closing. Pakistan does not need more IMF programs. It needs a new direction. One rooted in structural transformation, not stopgap fixes. Anything less will be a continuation of the past — and we already know how that story ends.