Pakistan’s economic struggles are often blamed on poor governance, corruption, and political instability. However, one of the most overlooked yet crucial factors behind the country’s financial turmoil is the intervention of the judiciary in economic matters.
Over the years, judicial overreach has cost Pakistan billions of dollars, stalled critical development projects, and deterred foreign investment. The courts, instead of facilitating economic growth, have often acted as roadblocks, making Pakistan’s financial recovery even more challenging.
One of the most devastating examples of this interference was the Supreme Court’s decision to annul the Reko Diq agreement. This single verdict resulted in a loss of $6 billion—approximately 1680 billion Pakistani rupees. This was the largest financial setback Pakistan has ever faced in a single deal.
When the government tried to renegotiate the agreement, international companies demanded prior approval from the Supreme Court before engaging in any new contracts. Such judicial interventions have made Pakistan an unreliable investment destination, scaring away potential investors who fear sudden legal reversals.
The Supreme Court’s role in halting the privatization of Pakistan Steel Mills (PSM) is another example of economic sabotage. At the time of the judicial intervention, PSM was on track for a profitable sale. However, since the deal was blocked, the entity has incurred losses of over 500 billion rupees, a financial burden that Pakistani taxpayers continue to bear. This was not an isolated case—judicial rulings have repeatedly hindered much-needed economic reforms and privatization efforts.
Another shocking example is how the judiciary has held back an estimated 3500 billion rupees in tax-related cases. If these funds were released, Pakistan could potentially free itself from the clutches of the International Monetary Fund (IMF) and reduce its dependence on external borrowing.
However, court rulings in favor of large corporations and powerful lobbies have deprived the nation of this crucial revenue. The judiciary’s reluctance to allow fair taxation has only widened the fiscal deficit.
A more recent instance was when the government attempted to impose taxes on companies earning over a billion rupees annually. The courts quickly intervened, granting a stay order to these corporations, effectively allowing them to evade taxation. This judicial activism serves only the elite, while the common people continue to bear the brunt of rising inflation and economic instability.
The Chinese investment in Pakistan, particularly under the China-Pakistan Economic Corridor (CPEC), has also suffered due to judicial interventions. During Saqib Nisar and Imran Khan’s tenure, the judiciary issued stay orders against Chinese projects, causing delays and diplomatic tensions.
The situation escalated to the point where the Chinese ambassador had to personally meet with the Chief Justice to express concerns over the financial losses incurred due to these legal hurdles.
The case of the Orange Line Train project in Punjab is yet another instance where judicial delays disrupted development. During the PML-N government, Justice Asif Saeed Khosa deliberately withheld the verdict on the project for over a year and a half.
The primary reason? A political calculation that aimed to prevent the then-government from taking credit for its completion. The project was eventually launched but only after unnecessary delays and cost escalations, further burdening the national economy.
The judiciary’s economic interventions have turned it into an unofficial stakeholder in Pakistan’s financial affairs, a phenomenon rarely seen in other countries. Institutions like the IMF now consider the judiciary a key player when assessing Pakistan’s economic policies.
This level of interference has created an unpredictable business environment where policy decisions can be overturned at any moment, leading to long-term economic instability.
If Pakistan is to recover from its economic crisis, judicial reform is as essential as political and financial restructuring. The judiciary must confine itself to interpreting the law rather than dictating economic policy. A transparent and accountable system, free from judicial overreach, is the only way forward for a financially stable and prosperous Pakistan.
