LAHORE/ISLAMABAD: As an unexpected rise in temperature has accelerated the start of cotton cultivation across most cotton-growing zones, a new study warned that the risk to the sector posed by climate change is being aggravated due to administrative weaknesses including poor pest surveillance, limited crop insurance and insufficient traceability systems.

Institutional fragmentation remains a major constraint, according to the study. There is no single accountable entity responsible for national cotton outcomes, resulting in limited data integration, weak risk-sharing frameworks, and inadequate export compliance systems.

The report, produced by EMPAK Strategies, dedicated to fostering a proactive, adaptive, and strategically sound approach to Pakistan’s foreign and security policies, highlighted that Pakistan was no longer self-sufficient in the sector as it has to import cotton worth US$2-3 billion annually, which could negatively affect Pakistan’s export competitiveness.

On the other hand, temperatures in Sindh’s coastal cities, including Thatta, Badin, Gharu, Golarchi, Mirpur and Tando Muhammad Khan, reached up to 35°C, prompting the rapid commencement of cotton sowing in these areas. Sowing is expected to begin in Sindh cities such as Sanghar, Mirpurkhas, Hyderabad and Umerkot, as well as in Punjab districts of Bahawalnagar, Bahawalpur, Vehari, Sahiwal, Pakpattan and Toba Tek Singh within the next eight to 10 days.

Sowing season arrives early as unexpected temperature rise accelerates cultivation in Sindh’s coastal cities

The Punjab Agriculture Department has set a target of cultivating early cotton on 700,000 acres for this season. The department designated Multan, Dera Ghazi Khan, Sahiwal and Faisalabad divisions for early cotton sowing. Surprisingly, Bahawalpur division, which has historically led Punjab in early cotton cultivation, has not been included in the campaign.

For several years, the Bahawalnagar district has recorded the highest acreage under early cotton in Punjab. Additionally, large-scale early cultivation takes place in Bahawalpur and in the Cholistan areas.

Despite this, these districts have been excluded from the early cotton initiative and instead categorised under regular seasonal cultivation, causing widespread concern among cotton stakeholders.

Cotton Ginners Forum Chairman Ihsanul Haq said that several sugar mills had decided to expand sugarcane cultivation in their respective areas. To incentivise farmers, they were offering fertilisers, agricultural chemicals, machinery, and even cash. This development has raised fears that increased sugarcane cultivation may reduce the area available for cotton farming.

Mr Haq urged the federal and provincial governments to sympathetically consider the demands of the textile and cotton industries to help reverse declining exports and strengthen the country’s trade performance.

Climate risk factor

In its report, EMPAK Strategies think tank identified climate change as a key risk factor, while also noting that administrative weaknesses intensified the crisis.

Weak seed quality regulation, inadequate extension services, poor pest surveillance, limited crop insurance, and insufficient traceability systems have increased farmers’ vulnerabilities, it said, adding that lack of coordination between federal and provincial authorities further hampered effective policy implementation.

The research report warned that if timely and comprehensive measures were not taken, Pakistan’s cotton sector could weaken further, with serious implications for the national economy and exports.

Without integrated governance structures that align environmental management, institutional accountability, and financial innovation, productivity recovery will remain temporary, the report said.

The EMPAK report proposed transitioning from fragmented, subsidy-driven farming towards an integrated Cotton-as-a-Service (CaaS) model based on cluster production, performance-linked service delivery, digital traceability, and yield-linked finance.

Supported by Development Finance Institutions and risk-sharing instruments such as first loss guarantees, this approach aims to improve productivity, strengthen climate resilience, enhance export compliance, and attract private investment.

Published in Dawn, February 16th, 2026

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JOB creation and the ‘future of work’ are now the renewed focus of multilateral organisations trying to make growth inclusive and resilient, and to combat domestic instability fuelled by joblessness.

World Bank President Ajay Banga says, “We’re trying to move the bank group as a whole from the idea of projects to the idea of outcomes.” He told Reuters that employment creation will remain “a binding constraint on growth over the long-term”, as such, “Job creation is the North Star”.

With the productive economy suffocated, Pakistan is heading towards a severe employment crisis, leaving millions of young people without visible job opportunities, says Chairman of the Federation of Pakistan Chambers of Commerce & Industry Businessmen’s Panel Mian Anjum Nisar; the country is losing its most valuable assets — its workforce.

Jobs are created when factories run on full capacity with value-addition, without which job creation will be limited and vulnerable to external shocks, he explained, listing the various factors eroding the country’s economic competitiveness.

‘The future of work does not simply happen; it is shaped by choices governments, employers and workers make together’

Explaining that the government is fully aware of the economic challenges, Finance Minister Muhammad Aurangzeb acknowledged that, “There are firms which are leaving the country that is true. If the taxation is high or the energy cost is high or its financing cost is always moving in the right direction, those have been real issues,” he said while addressing the Pakistan Policy Dialogue in Islamabad.

However, Mr Aurangzeb stated that “it takes two to tango” and firms still relying must reconsider their practises as old, state-dependent business models are simply “not going to work in the New World Order”.

Some of the multinational firms switched to local sourcing which has helped their margins, “They are now able to export, therefore they stay, and if another firm has not been able to do that, then that’s something we know they need to think through.”

Local firms have invested in Pakistan International Airline’s privatisation, and 20 new foreign investors, including Google, Aramco, Wafi Energy, Turkish Petroleum, and others had entered the Pakistani market in the last 18 months, he highlighted.

Yet, Pakistan still needs to generate 2.5–3 million jobs a year — roughly 25–30m over the next decade — as millions of young people come of age, Mr Banga said, adding that failure to do so could fuel illegal migration or domestic instability.

However, “Equally troubling is the interaction between weak employment growth and declining real incomes,” says a Dawn editorial, further writing, “Cumulative inflation in recent years has outpaced income gains, resulting in a fall in real per capita household income and a rise in poverty risks. At the same time, inequality trends suggest that whatever limited growth has occurred has been unevenly distributed.”

To take care of this issue on the global scale, the International Labour Organisation (ILO) has redefined the “future of work”.

Calling for a shift in labour standard, ILO Director-General Gilbert F. Houngbo emphasised: “Modern labour governance must move beyond job-centred approaches towards worker-centred systems, where rights, social protection, skills development and workers’ voices accompany people across increasingly diverse and mobile careers, including in platform and digitally managed work.”

“The future of work does not simply happen. It is shaped by the choices governments, employers and workers make together.”

Speaking at the Summit’s Future of Work Forum in a session Mr Houngbo said, “Strong labour governance is not a barrier to growth; it is what makes growth inclusive and resilient.”

On Feb 9, Moody’s forecast Pakistan’s real GDP growth of around 3.5pc for 2026, up from 3.1pc in 2025, and said easing policy rates and lower inflation should support credit demand. It added that margins are expected to remain steady after declining following rate cuts.

The agency revised Pakistan’s banking sector outlook to stable from positive, citing that the operating environment is recovering “but only gradually” as the economic and fiscal outlook improves and the external position strengthens.

The move signals that volatility has eased without a strong growth push behind it, says Komal Kenneth Shakeel, Head of Partnerships and Collaborations at Ignite.

A biannual State Bank Monetary Policy report projected real GDP growth in the range of 3.75–4.75pc for FY26.The report also underscored evolving risks to the improved macroeconomic outlook —sources of vulnerability involve inflation, external account and GDP growth. It is important to speed up the progress on structural reforms to increase the economy’s resilience to adverse shocks, and to improve productivity and plug losses of state-owned enterprises, the report added.

Moreover, the utilisation of annual Public Sector Development Programme funds has inched up to 27pc in first seven months of FY2025 — well behind the approved disbursement schedule, but relatively higher than the 20pc recorded for the same period of the last fiscal year.

Under the mechanism announced by the Ministry of Finance for FY26, the PSDP spending should have crossed at least Rs443bn (43pc) of the allocation by Jan 31.

Published in Dawn, The Business and Finance Weekly, February 16th, 2026

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AS Islamabad seeks to deepen trade and transit linkages with the Central Asian region, a clear statistical bifurcation between Afghanistan and the five states of the region is essential for accurate policy assessment.

The five Central Asian republics distinct from Afghanistan are Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. This grouping is recognised in international economic and geopolitical frameworks and forms the basis upon which Pakistan`s broader Central Asia strategy is measured.

Pakistan`s exports to Afghanistan plunged to $219.5 million in July December 2025 from $505.8m from the same period of 2024. Similarly, imports from Afghanistan that have long remained small, amounting to only $6.3m in July-December 2025 against $10m in July-December 2024, according to the State Bank of Pakistan.

This marked decline in bilateral trade is attributed largely to sustained border closures in the wake of the recently increased terrorist activity in May 2025 For FY25, total trade between Pakistan and the five Central Asian States was recorded at approximately $442.15m.

This aggregate comprises Pakistani exports of $197.06m down 31.63pc from the preceding year and imports of $245.09m, which surged more than four-fold.

Although the INSTC’s potential remains significant on paper, geopolitical strains have slowed cooperation, raised transit uncertainties, and underscored the need for renewed diplomatic engagement

Among the individual republics, Kazakhstan remained Pakistan`s foremost regional trading partner, with exports of $97.96m and imports of $129.63m. Uzbekistan followed with exports of $63.65m and imports of $79.23m. Tajikistan, Turkmenistan, and Kyrgyzstan registered comparatively smaller volumes, with exports to Kyrgyzstan contracting most sharply.

It is pertinent to note that the frequently cited figure of $2.41 billion in Pakistan Central Asia trade for FY25 includes Azerbaijan alongside Afghanistan and the five Central Asian republics. That broader regional aggregate, while accurate in its own context, is not suitable for a strict bifurcation between trade with Afghanistan and the standalone Central Asian states.

The dynamics of trade engagement with the Central Asian region, however, vary considerably across different partners, reflecting both opportunities and structural challenges. Kazakhstan, for instance, has emerged as one of Pakistan`s most rapidly expanding trade partners.

Bilateral trade with Kazakhstan remains much larger compared with the trade with other four Central Asian countries, largely fueled by massive increase in Kazakhstan’s exports to Pakistan. The surge in Pakistan imports from Kazakhstan remains concentrated into crude oil, wheat and legumes where Pakistan`s exports to Kazakhstan, which recorded a decline in the last fiscal year, are driven by food products and light industrial goods, with remarkable increases in potato exports and knitted garments.

Pakistan is pursuing an ambitious medium-term goal of raising bilateral trade with Kazakhstan to $1bn. High level discussions have emphasised moving beyond fragmented initiatives to a structured implementation mechanism, with cooperation proposed in sectors including agro-industry, petrochemicals, metallurgy, and pharmaceuticals.

Pakistan’’s aspirations to become a pivotal Eurasian trade hub, however, are complicated by infrastructure and geopolitical competition. The International North-South Transport Corridor (INSTC) represents a significant alternative to Pakistans traditional routes, connecting India, Iran, Azerbaijan, Russia, and Central Asia via ship, rail, and road.

Studies suggest the INSTC is approximately 30 per cent cheaper and 40pc shorter than the Suez Canal route, reducing transit times from Mumbai to Moscow from 40-60 days to 25-30 days. Recent developments along the INSTC, including the Kazakhstan-Turkmenistan-Iran railway link and the expansion of Iran`s Chabahar Port, have created an efficient gateway for Central Asia that bypasses South Asian corridors.

Simultaneously, Afghanistan’s diversification efforts via Iran’’s Chabahar Port and other overland routes, China’s Belt and Road Initiative, and Russia’’s shifting focus due to the Ukraine conflict have reshaped the regional connectivity landscape, presenting both opportunities and formidable challenges for Pakistan.

Since the conflict between India and Pakistan in May 2025, which led to theclosure of Pakistani airspace and broad regional tensions, the operational environment for the INSTC has become more complex and uncertain. The escalation disrupted overland and air links in South Asia, creating political and logistical obstacles for multilateral connectivity initiatives, including the INSTC, which relies on broad cooperation among Iran, India, Pakistan, and Central Asian states.

Although the corridors potential remains significant on paper, the current geopolitical strains have slowed cooperation, raised transit uncertainties, and underscored the need for renewed diplomatic engagement and practical confidence-building measures among all corridor participants to unlock INSTC promise as a reliable trade route.

To translate geographic advantage into tangible economic benefit, Pakistan must address multiple structural and operational challenges. Growing trade deficits, exemplified by the massive increase in imports from Kazakhstan, underscore the need for export diversification beyond traditional sectors. The declining trade with Afghanistan further highlights the vulnerability of economic relations to political disputes.

Pakistan`s corridors must compete not only on geography but on reliability, efficiency, and value-added cooperation.

Implementation of existing transit agreements, customs harmonisation, and predictable cross-border protocols are essential for Pakistan to emerge as a credible transit hub rather than merely an aspirant.

Published in Dawn, The Business and Finance Weekly, February 16th, 2026

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