The Need for National Oversight in State Decisions
Pakistan has suffered more from its own poor decisions, hasty agreements, and weak institutional systems than from any external enemy. Over the past several decades, numerous national level agreements have been signed whose consequences were not limited to a single government’s tenure but rippled across the entire economy, crippling industry, depleting foreign exchange reserves, and burdening the common citizen. Sadly, many of these critical decisions were made not through broad institutional consultation but by a handful of individuals or a narrow political circle. The result has been mounting conflicts and billions of dollars in losses to the national exchequer.
Perhaps the most glaring example is the rash of contracts signed with independent power producers. Promoted as a solution to Pakistan’s electricity crisis, these agreements included capacity payment clauses that obligated the government to pay for electricity whether it was generated or not. Over time, these contracts became a crippling burden on the economy. The circular debt ballooned into trillions of rupees, foreign exchange reserves came under severe strain, and electricity prices in Pakistan soared above those of several regional countries. Industrial production costs rose, exports suffered, factories shut down, and the ordinary citizen was crushed under the weight of unaffordable electricity bills. Today, Pakistan finds itself hostage to a system where expensive power is slowing the very engine of economic growth.
Pakistan’s liquefied natural gas agreement with Qatar has also been a subject of intense debate. While it is true that the country faced an urgent energy shortage at the time, serious questions were later raised about whether the terms were fully in Pakistan’s favor. The deal compelled Pakistan to purchase a fixed volume of gas regardless of domestic demand. Consequently, the government was sometimes forced to offload surplus gas at lower prices in the local market, incurring significant financial losses. Interestingly, Bangladesh entered into nearly identical contracts, while India secured relatively better terms, though India’s larger market and higher purchasing power certainly gave it leverage. In Pakistan, however, the agreement became a lightning rod for political controversy, with the public feeling that decisions were being made in isolation rather than through national consensus.
The Reko Diq case has come to symbolize Pakistan’s legal and administrative frailties. This project, involving vast gold and copper reserves in Balochistan, saw its contract and subsequent cancellation embroil Pakistan in international arbitration courts. The foreign company alleged that Pakistan had violated the agreement, exposing the country to billions of dollars in potential penalties. Estimates ranged from six to twelve billion dollars. Though the matter was eventually settled to some degree, the controversy left a lasting stain on Pakistan’s legal and policy framework, eroding investor confidence worldwide.
The Iran-Pakistan gas pipeline project has been a persistent source of diplomatic and legal pressure on Pakistan. Originally conceived as a trilateral venture involving Iran, Pakistan, and India, with India later withdrawing, critics argue that the agreement failed to adequately account for the fraught relationship between Iran and the United States, given that Pakistan’s economy remains deeply intertwined with Western financial systems and American influence. Legal experts have pointed out that the original trilateral framework had effectively become obsolete and a fresh bilateral agreement was needed under the changed circumstances. Yet certain Iranian quarters have continued to make claims of penalties against Pakistan, with figures cited in the billions of dollars.
Pakistan has also faced a complex situation regarding water resources. Under the Indus Waters Treaty, Pakistan was granted primary rights over the western rivers, the Indus, Jhelum, and Chenab. However, in subsequent years, India expanded its presence on these rivers through various hydropower projects. In the arbitration and international legal proceedings facilitated by the World Bank, Pakistan was unable to secure the diplomatic and legal edge it had hoped for. Experts believe that Pakistan should have fielded a stronger team of technical, legal, and water experts in these matters, as water is fundamentally critical to both future conflicts and the national economy.
The real issue is not a handful of agreements but the system under which such decisions have consistently been made. In Pakistan, political parties are often personality centric, so even major national decisions tend to be shaped by narrow political considerations rather than robust institutional consultation. The time has come to establish a strong, transparent, and efficient mechanism whereby no major international agreement is left to the discretion of a single individual or administration. Every major accord affecting national security, the economy, energy, water, or mineral resources must be ratified through a comprehensive national forum.
In developed countries, major agreements are subject to parliamentary oversight, independent legal review, detailed economic impact assessments, and mandatory input from national security institutions. In the United States, Congress scrutinizes such deals. In European nations, parliamentary committees play this role. Many Asian countries have established national economic councils for the same purpose. Even in China, strategic projects involve collective input from the party, state institutions, and experts. Pakistan needs a similar framework, one that brings together legal experts from the judiciary, economists from trade and industry bodies, relevant technical agencies, the Establishment Division, national security institutions, and parliamentary representatives to evaluate every major agreement against the yardstick of national interest.
Pakistan can no longer afford experiments whose consequences will be borne by future generations. Cases like Reko Diq, the independent power producers agreements, the Qatar LNG deal, the Iran pipeline, and water disputes are clear evidence that national decisions cannot be made on the basis of short term political expediency or individual judgment. Only a strong, transparent, and participatory decision making system can safeguard Pakistan from the economic, legal, and diplomatic pitfalls that lie ahead.
