The Inside Story Podcast How will Pakistan deal with the global energy crisis?
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Apr 4, 2026 Ali Salman, CEO of PRIME, advocates market-based economic fixes. Kaiser Bengali, economist and former Balochistan policy lead, warns of structural import dependence and fiscal waste. Michael Kugelman, South Asia expert, maps geopolitical and security risks. They discuss Pakistan's Middle East energy reliance, reform challenges, agricultural and social impacts, and grassroots solar resilience.
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Why Pakistan Is Especially Vulnerable To Middle East Shocks
- Pakistan is highly exposed to the West Asia war because it relies heavily on hydrocarbon imports from the Middle East and has limited domestic production.
- Michael Kugelman highlights remittance risks and chronic structural weaknesses like high debt and narrow exports that amplify shocks.
Import Dependence Undermines Recent Stabilisation
- Long-term import dependence has left Pakistan fragile across food, fuel and industry inputs, creating repeated crises when external prices rise.
- Ali Salman notes recent stabilisation from reforms but warns the current shock threatens those fragile gains and requires fiscal retrenchment.
Shrink Government Bloat To Stop Fiscal Hemorrhage
- Cut inefficient public spending and restructure ministries and departments to reduce fiscal hemorrhage.
- Kaiser Bengali recommended abolishing 17 ministries and 60 attached departments and running down non-essential defence expenses to plug budget gaps.