It is the year 2035. In Punjab’s fields, AI-powered drones guide farmers on the exact day to plant and harvest. Driverless trucks move goods from Karachi’s port to markets without a single driver.
In rural AJK, a young doctor uses an AI diagnostic tool that detects diseases even seasoned specialists once missed. In Islamabad, the tax authority quietly collects revenues using predictive AI, without harassing honest taxpayers. And in our universities, AI tutors teach every student in their own language and at their own pace.
This is not science fiction. These technologies existed in 2025, but only in scattered pilots. The real story is how Pakistan chose to mainstream them. Looking back from 2035, the key lesson is simple: AI was not destiny. The outcomes were shaped by choices.
Between 2025 and 2035, Pakistan faced three critical forks in the road. The first fork was productivity. One possible future was disappointing: AI adoption confined to elite firms, used mainly for automation rather than innovation. Productivity stayed flat, GDP growth stagnated at 3.0 per cent, and displaced workers slipped into the informal sector. The other path was transformative. AI complemented workers, amplified creativity, and accelerated breakthroughs in agriculture, medicine, and education. In this world, Pakistan’s GDP grew by six to 7.0 per cent annually, driven not by debt or remittances, but by productivity.
The second fork was inequality. In one scenario, AI hollowed out the middle class, replacing clerks, accountants, call centre workers and pushing them into low-wage service jobs. The result was an ‘hourglass economy’: a fat top of elites, a fat bottom of the poor and a thin, vanishing middle. But another future was possible. AI tools empowered less-skilled workers to perform like seasoned professionals. A junior coder in Lahore, supported by an AI assistant, produced work comparable to a senior engineer. Call centre workers doubled their productivity with AI tools. In this inclusive future, inequality narrowed, female labour force participation doubled and poverty halved.
The third fork was industrial concentration. Without reforms, AI risked entrenching monopolies. Only giant corporations could afford billion-dollar models, and countries like Pakistan would remain consumers, locked into dependency. But an alternative was open-source AI, which was accessible to startups, SMEs and universities. By 2035, Pakistan had built local Urdu and regional-language AI models, SME-driven AgriTech and EdTech exports. Innovation was decentralised. These forks showed that AI could either deepen our challenges or unlock our potential. The deciding factor was not technology itself, but policy design and institutional reform.
To appreciate the transformation, we must remember where Pakistan stood in 2025. The country had a massive youth bulge – 65 per cent of Pakistanis under 30. That could have been a demographic dividend, but without jobs, it was a ticking time bomb. The economy was services-heavy and 70 per cent informal, with low productivity and no safety nets. Growth hovered below 3.0 per cent, while educated unemployment rose sharply. Human capital was weak. Less than 10 per cent of graduates had technical or digital skills relevant to the AI economy. R&D spending was just 0.3 per cent of GDP, among the lowest globally. Pakistan risked being permanently reliant on foreign technologies. The risks were clear: unemployment, exclusio, and stagnation. But so were the opportunities: global freelancing markets, agricultural modernisation and AI-driven governance reforms.
In 2025, Pakistan launched its first National AI Policy. The vision was ambitious: a hybrid ecosystem where humans and machines worked together to drive inclusive innovation, governance reform, and prosperity. But a more comprehensive Pakistan AI Framework 2025 soon emerged, structured around four pillars. Education and training aimed to reduce inequality by spreading AI literacy, building lifelong learning, and targeting women and marginalised groups.
Regulatory and institutional reforms focused on preventing monopolies through internet access, one-click business registration, and an AI Governance Authority. Inclusive innovation and SME growth created space for village economic zones, AI vouchers for small businesses and university-led AI hubs. Productivity transformation sought to raise long-term growth with the Digital Rupee, AI-powered agriculture, AI-managed taxation and procurement, and AI-enabled climate resilience. Together, these four pillars converged into one goal: Pakistan as an AI Creator Nation by 2035.
The transformation was gradual, but deliberate. In 2025, Pakistan launched Internet for All, scrapped the NOC culture for business, and established Village Economic Zones. In 2026, high-tech labour export to GCC countries and private sector partnerships accelerated. In 2027, AI curricula were integrated into schools and teachers trained with EdTech tools.
In 2028, Pakistan launched the Digital Rupee and enabled AI-driven microfinance. In 2029, agriculture shifted to AI-powered irrigation and predictive monitoring. In 2030, taxation and procurement went digital with AI oversight, reducing leakages and corruption. By 2031, a Lifelong Learning Fund will empower citizens to reskill. By 2032, every province had AI hubs in universities, and local governments adopted AI in urban planning and budgeting. In 2033, AI helped predict and mitigate climate shocks. By 2034, Pakistan was exporting AgriTech, EdTech and GovTech solutions. In 2035, the country emerged as an AI Creator Nation.
By then, the reforms were visible in everyday life. Agriculture became smart farming, with yields up 30 per cent and water use down 20 per cent. Manufacturing shifted to smart factories, using predictive AI for quality control and supply chain optimisation. Healthcare saw rural clinics utilising AI diagnostics and telemedicine, thereby reducing the rural-urban healthcare gap.
Education has adopted AI tutors, tailoring lessons in Urdu and regional languages, which has reduced dropouts and improved quality. Finance became transparent and inclusive with the Digital Rupee and AI-powered microfinance. Governance itself became smarter, with AI managing taxation, subsidies and disaster response.
The macroeconomic impact was profound. By 2035, AI contributed 1–2 per cent annually to GDP growth. Pakistan sustained 6-7 per cent growth, with total factor productivity contributing three per cent annually. Poverty fell by half, inequality narrowed, female labour participation doubled, and the digital economy grew to 20 per cent of GDP. Industrial concentration was checked: over 50,000 AI SMEs operated, and 5,000 patents were filed domestically. Pakistan became known not as a consumer, but as a creator of AI solutions for the Global South.
The critical lesson is this: AI is not destiny. The same technology can entrench inequality and stagnation or unleash growth and inclusion. The difference lies in policy choices. In 2035’s Pakistan, the AI decade showed that bold reforms, consistent investment and inclusive policies can turn potential into prosperity. Without them, the outcome could easily have been the opposite.
The question for 2025 remains urgent: will Pakistan be remembered as a consumer of AI, or as a creator of AI? The next decade is ours to shape.
The writer is associate professor at the Pakistan Institute of
Development Economics (PIDE). He can be reached at: dr.iqbaln@gmail.com