The contemporary Pakistani state stands at a complex intersection of economic recovery and escalating hybrid warfare. As Balochistan Chief Minister Sarfaraz Bugti stated recently, Pakistan is engaged in an “intelligence-driven war” orchestrated by India’s Research and Analysis Wing (RAW), with Indian proxies stoking militancy and undermining national stability. Parallel to this volatile security environment, Finance Minister Muhammad Aurangzeb unveiled the Economic Survey 2024–25, projecting a rejuvenated macroeconomic landscape—marked by a $411 billion GDP, 2.68% growth, and robust investor confidence. This juxtaposition of economic momentum with persistent external aggression defines Pakistan’s “twin front challenge”: sustaining economic gains amid hybrid threats.
The term hybrid warfare aptly encapsulates the evolving nature of conflict that Pakistan faces. No longer confined to conventional borders or battlefield engagements, India’s use of proxies—evident through evidence presented by both the Chief Minister of Balochistan and Inter-Services Public Relations (ISPR)—underscores the tactical shift from open hostility to covert destabilization. The activation of militant networks post-Pahalgam, alleged Indian misinformation campaigns regarding Karachi port, and RAW’s technological support to proxies point towards a sophisticated campaign of fifth-generation warfare.
Within this hostile environment, the state’s economic performance offers an encouraging counter-narrative. The rebound in GDP, fiscal surplus of Rs 1,896 billion in the first quarter, record foreign reserves, and the lowest inflation rate in decades (0.3% in April 2025) are not merely statistical milestones; they are indicators of policy coherence and institutional resilience. Pakistan’s successful completion of IMF reforms under the Standby Arrangement (SBA) reflects the government’s commitment to structural adjustments, fiscal consolidation, and market confidence restoration.
However, the strategic paradox is inescapable: economic progress is perennially vulnerable to geopolitical disruptions. India’s asymmetric tactics—militant proxies, digital disinformation, and psychological operations—are designed to erode state credibility, undermine investor confidence, and exploit internal dissent. The choice of Balochistan as a primary theatre is no coincidence; the province, rich in natural resources and a linchpin of the China-Pakistan Economic Corridor (CPEC), is both economically strategic and ethnically sensitive. India’s narrative framing of militants as “freedom fighters” rather than foreign-sponsored agents contributes to international confusion and domestic unrest.
This leads to a vital policy question: can economic development insulate a state from hybrid warfare? The answer lies in how integrated the economic and security frameworks are. Pakistan’s response, thus far, has included small-scale kinetic intelligence-based operations (IBOs), legislative measures to rehabilitate radicalized youth, and a narrative correction effort that delinks terrorism from Baloch identity. But this approach must now be institutionalized through a broader national resilience architecture that includes economic, security, digital, and cognitive domains.
For instance, the unprecedented rise in FBR collections (25.9% growth), coupled with cuts in the policy rate from 22% to 11%, reflects macroeconomic dexterity. Yet, economic planners must also anticipate fiscal shocks caused by security escalations—especially in provinces under direct threat. Sectoral investments in education (Rs 61.12 billion to HEC) and youth skill development are crucial, but these must include programs aimed at preventing radicalization and integrating conflict-affected youth into the productive economy.
Moreover, the launch of Pakistan’s first carbon market policy, the issuance of the Green Sukuk, and the $1.4 billion IMF Resilience and Sustainability Facility (RSF) signify a pivot toward sustainable and climate-resilient growth. However, green development is especially vulnerable to geopolitical sabotage, particularly when it intersects with energy infrastructure or water diplomacy. Any future sabotage of eco-projects in Balochistan, for instance, could derail both environmental and economic targets, lending strategic urgency to their protection.
Pakistan’s external economic linkages, especially with China, Saudi Arabia, the UAE, and the United States, must also serve dual functions: economic enablers and diplomatic buffers. These partners, while primarily trade allies, should be engaged in intelligence-sharing and regional counterterrorism coordination—particularly given that instability in Pakistan directly impacts regional connectivity and investment flows.
In tackling the issue of missing persons, the government has taken a notable step by passing legislation to set up judicially supervised rehabilitation centres. While this move seeks to correct a long-standing grievance, the political and human rights implications must be carefully managed. The distinction between “self-disappearance” and enforced disappearance, as highlighted by CM Bugti, needs to be handled with transparency and independent oversight to avoid further narrative weaponization by adversaries.
In sum, Pakistan’s current trajectory is one of cautious optimism. The economic rebound signifies recovery not just in numbers but in national confidence and institutional capability. Yet, without a unified national doctrine that binds economic stability with internal security and external defense, gains remain fragile. The coming months are pivotal. If the state succeeds in translating its current economic momentum into long-term inclusive growth while neutralizing hybrid threats, Pakistan could redefine its strategic identity—from a security-focused state to a resilient, forward-looking economy that deters through development and unites through vision.