Boom in defense exports sparks call for economic recovery

As Pakistan enters a phase characterized by unprecedented defense export opportunities and equal opportunity to reposition itself in evolving global economic dynamics, business leaders are calling for a fundamental restructuring of the country’s external economic relations to achieve sustainable, self-propelled growth.

Former President of the South Asian Association for Regional Cooperation (SAARC) Chamber of Commerce and Industry, Iftikhar Ali Malik, urged the government and the private sector to prioritize competitiveness, investment and innovation as the cornerstones of Pakistan’s economic revitalization. He said the country is at a critical juncture where it can either continue a cycle of crisis management or break free towards true economic sovereignty. “For too long, we have been trapped in a foreign aid trap that has weakened our structural foundations and discouraged strategic planning,” said Malik. He added that the current global realignment, coupled with growing interest in emerging markets and regional connectivity initiatives, gives Pakistan a rare opportunity to redefine its economic priorities and pursue growth on its own terms.

The trade veteran stressed that attracting long-term foreign direct investment should take priority over short-term capital inflows linked to balance of payments pressures. Such investments, he said, would bring not only capital but also technology transfer, managerial expertise and critical access to global markets. Equally important is rebuilding confidence between domestic entrepreneurs and diaspora investors, who can form the basis for sustainable economic expansion, he added.

Another prominent businessman, who requested anonymity, pointed to Pakistan’s growing defense sector as a potential game changer for the wider economy. After the Pakistan-India conflict in May 2025, Pakistan’s defense exports increased to around $13 billion, although most of this volume remains in the pipeline, opening new avenues for economic diversification.

“The boom in defense exports is not just about military hardware; it represents a validation of Pakistan’s manufacturing capabilities and technical know-how,” the businessman said. “These export orders have created, and will continue to create, ripple effects in the private sector, helping manufacturers to identify new international markets and establish Pakistan as a reliable supplier. Beyond the immediate foreign exchange benefits, which are significant, this creates institutional capacity and global credibility that can be leveraged across multiple industries.”

He added that the success of the defense sector shows what Pakistani industry can achieve when it focuses on quality, innovation and compliance with international standards, lessons that should be applied to other sectors of the economy.

Malik, however, stressed that redefining Pakistan’s external economic relations requires a more balanced diplomatic approach, where trade deals and regional connectivity projects are driven by national competitiveness rather than urgent financing needs. Diversifying export markets and reducing over-dependence on traditional partners will strengthen Pakistan’s bargaining position globally, he said. Both business leaders said the future lies in leveraging innovation in all sectors, including digitization, fintech, agriculture and renewable energy. These regions, they noted, offer opportunities to bypass traditional development constraints and integrate directly into global value chains, while creating quality employment for Pakistan’s young population.

This transformation, they argued, requires sustained engagement, transparent governance and accountability. “This is not about quick fixes or cosmetic reforms. It requires genuine ownership of the reform process and a long-term vision that prioritizes resilience and sustainability over short-term expediency. If we can sustain this focus, Pakistan can emerge as a self-reliant and productive economy, integrated into the global system on an equal footing,” Malik added.