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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

ISLAMABAD:

Fortinet, the global cybersecurity leader driving the convergence of networking and security, presented its Sovereign SASE (Secure Access Service Edge) solution on its third Fortinet Security Day on September 16, 2025 in Pakistan.

Through SASE solution, Fortinet demonstrates how organisations can address data residency, privacy and operational requirements without compromising security, user experience or scalability.

Besides, Fortinet’s Sovereign SASE solution enables businesses to securely connect and protect users, applications and data, regardless of location. It aims to guarantee that data resides and is processed within specific geographical boundaries, giving organisations complete control over their sensitive information while respecting their compliance of regional and local regulations.

According to Fortinet spokesperson and Senior Regional Director Shadi Khuffash, SASE is envisaged for a range of industries and is ideal for organisations operating in highly regulated verticals with sensitive data like government, finance and healthcare, or any business that handles classified information and critical infrastructure.

Fortinet Regional Director for Pakistan Saqib Ishfaq commented: “In today’s interconnected global economy, organisations face a growing and constantly evolving array of cybersecurity threats and compliance complexities. At the same time, local data protection regulations create strict requirements around data governance that organisations in Pakistan must navigate. Fortinet’s Sovereign SASE helps organisations to proactively detect and respond to threats.”

LAHORE:

The passage of the Motor Vehicle Industry Development Act 2025 has alarmed Pakistan’s auto sector. Stakeholders fear the legislation will disrupt the industry’s fragile recovery and criminalise legitimate business practices.

The Pakistan Automotive Manufacturers’ Association (PAMA), the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), and independent analysts argue the Act was drafted in haste without proper consultation. They say the government should focus on supporting growth instead of adding hurdles.

“This law appears to criminalise manufacturing and trade without justification,” said PAMA Director General Abdul Waheed Khan in a letter to the Ministry of Industries. He added that “involving the FIA is especially troubling” and that the bill does not strengthen consumer protection beyond the Auto Industry Development and Export Policy (AIDEP) 2021-26, already in effect until 2026.

PAAPAM also criticised the Act, saying vendors were ignored despite forming the backbone of the supply chain. A senior representative said rising costs, volatile exchange rates, and falling demand already strain parts makers. “Instead of support, this bill creates fear and uncertainty. The industry needs facilitation, not penalisation,” he said.

Independent analysts noted the Act introduces strict penalties when the sector is shrinking. One expert, speaking on the condition of anonymity, said auto industries worldwide need long-term policy stability, but in Pakistan, recovery is disrupted by sudden changes. “The Act reflects short-term thinking and may scare away investors,” he warned. The data paints a grim picture. Car sales plunged 52% in three years, from 234,180 units in FY2021-22 to 112,203 in FY2024-25. Tractor sales halved to 29,192 units, while two- and three-wheeler sales dropped 17%.

KARACHI:

Pakistan’s large-scale manufacturing (LSM) sector showed a recovery, increasing by 9% year-on-year and 2.6% month-on-month in July 2025, primarily due to a low base, along with improved domestic demand and sector-specific gains that boosted industrial output.

Analysts attribute the rebound to strong performances in automobiles, garments, cement, and petroleum products, alongside stable — though elevated — energy prices and easing interest rates.

The LSM Index climbed to 115.68 points in July 2025, compared to 106.14 points in July 2024 and 112.75 points in June 2025, according to provisional data released by the Pakistan Bureau of Statistics (PBS).

The LSM recorded 8.99% YoY growth and 2.6% MoM growth.

The performance was largely driven by robust growth in key industries including automobiles (+57.8%), garments (+24.8%), cement (+18.8%), and petroleum products (+13.2%). Furniture production surged by 86.8%, while other transport equipment jumped by 45.8%. Meanwhile, food and paper & board contributed positively, rising by 6.6% and 15.0%, respectively.

On the other hand, some sectors showed contraction. Beverages (-6.2%), chemicals (-2.6%), iron and steel (-3.7%), and fertilisers (-1.6%) weighed on overall growth. Machinery and equipment also reported a sharp decline of 22.8%.

According to PBS, the major contributors to overall LSM growth in July were wearing apparel (3.80 percentage points), automobiles (1.33 ppts), petroleum products (1.01 ppts), non-metallic mineral products (0.96 ppts), and furniture (0.91 ppts). In contrast, beverages and chemicals dragged the index down by 0.39 ppts and 0.24 ppts, respectively.

Sana Tawfiq, analyst at AHL, while speaking to The Express Tribune, said the recent rise in the Large-Scale Manufacturing index is partly due to a low base effect, as overall productivity had declined significantly last year. She noted that the policy rate, which stood at 19.5% in July 2024, has now come down to 11%.

However, the business community has criticised the State Bank of Pakistan’s (SBP) recent decision to keep the rate unchanged at 11% despite inflation easing to around 3%.

According to Tawfiq, Pakistan has recently emerged from an economic slump, and with rising domestic demand, much of the LSM growth is being driven by internal consumption. While energy prices remain high, their stability has kept the cost of doing business in check. Looking ahead, Tawfiq emphasised that productivity growth could face short-term disruptions due to floods, but lower interest rates are expected to support LSM expansion and contribute to overall economic growth. She added that if the current momentum continues, the LSM sector, which carries around 8% weight in GDP, could significantly boost growth.

Meanwhile, the SBP in its latest monetary policy projected GDP growth in the range of 3.25% to 4.25%, with risks tilted towards the lower end.

Industrial activity posted strong growth, driven by notable increases in production across garments, refineries, cement, and automobiles, said AKD Securities Director of Research Mohammed Awais Ashraf.

Garments output rose on the back of higher US orders ahead of tariff implementation. Cement production benefitted from stronger exports and a favourable low base, as last year’s output was impacted by traders’ strikes following the imposition of withholding tax.

Meanwhile, automobile production recorded significant growth, supported by improved economic activity, lower interest rates, and the absence of plant shutdowns that constrained production during the same period last year.

Gold prices in Pakistan surged to a historic peak on Tuesday, mirroring gains in the global market. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola climbed by Rs4,700 to a record Rs391,000, while 10-gram gold rose by Rs4,030 to Rs335,219.

A day earlier, the yellow metal had remained steady at Rs386,300 per tola. Internationally, gold also advanced, with prices hitting $3,692 per ounce (including a $20 premium), reflecting a $49 increase.

Silver followed suit, with its price per tola rising by Rs53 to Rs4,496. The global rally was driven by a weaker US dollar ahead of the Federal Reserve’s policy meeting this week, where an interest rate cut is widely anticipated.

The Pakistani rupee extended its upward trend against the US dollar on Tuesday, posting a slight gain in the inter-bank market.

By the day’s close, the rupee settled at 281.51 per dollar, inching up by Rs0.01 and marking its 28th consecutive session of appreciation. A day earlier, it had closed at 281.52.

On the global front, the US dollar hovered near a two-and-a-half-month low against the euro and approached a 10-month low versus the Australian dollar, as investors reinforced expectations of a Federal Reserve rate cut this week followed by further easing.