Beyond Riba: Reconstruction of Just Financial Orde…

For three decades, the prevailing narrative of the global economy was one of seamless integration. From the design studios of California to the high-tech assembly lines of Shenzhen, the world operated on the assumption that technology was a bridge, not a barrier. However, that era of “borderless innovation” is rapidly giving way to a more fragmented reality. As the United States and China engage in an intensifying rivalry over the foundational technologies of the 21st century artificial intelligence (AI), semiconductors, and 5G a “Silicon Curtain” is descending, reshaping global supply chains and forcing a difficult reckoning for developing nations. The shift marks a transition from a world defined by economic efficiency to one governed by national security. In Washington, the consensus has hardened around the idea that “de-risking” from China is essential to protect intellectual property and maintain a military edge. In Beijing, the drive for “technological self-reliance” has become a central pillar of national survival. What began as a series of trade disputes in 2018 has evolved into a comprehensive decoupling that threatens to bifurcate the global digital ecosystem. The Semiconductor Siege and the AI Arms Race At the heart of this decoupling is the semiconductor the “oil” of the digital age. Advanced microchips are the brains behind everything from smartphones to hypersonic missiles. In 2022, the U.S. Department of Commerce introduced sweeping export controls designed to prevent China from acquiring the high end chips necessary for training generative AI models. The “CHIPS and Science Act” further signaled Washington’s intent to reshore manufacturing, offering billions in subsidies to bring fabrication back to American soil. China has responded with its own set of defensive and offensive measures. Beijing has invested hundreds of billions of dollars into its domestic chip industry via the “Big Fund” and has imposed export restrictions on critical minerals like gallium and germanium materials essential for high-tech manufacturing. This tit-for-tat dynamic has profound implications for AI development. While the U.S. currently leads in algorithmic innovation and hardware design, China possesses a vast reservoir of data and a highly integrated industrial base. As the two powers diverge, the world faces the prospect of two distinct AI “stacks” each with its own standards, ethical frameworks, and hardware requirements. For global corporations, the cost of maintaining two separate supply chains is staggering, with some estimates suggesting a permanent 1 to 5 percent drag on global GDP. The 5G Dilemma: Infrastructure as an Ideology The rivalry is equally visible in the rollout of 5G telecommunications. As the backbone of the “Internet of Things,” 5G infrastructure is more than just a faster cellular network; it is the nervous system of modern cities. The U.S. campaign to exclude Chinese providers like Huawei and ZTE from Western networks, citing security vulnerabilities, has effectively split the world into two camps. Many European and “Five Eyes” nations have aligned with Washington, citing the risks of state-sponsored espionage. Conversely, many nations across Southeast Asia, Africa, and the Middle East have continued to embrace Chinese infrastructure, which is often more affordable and comes with flexible financing. This infrastructure divide creates a “path dependency”: once a country adopts a specific 5G standard, the subsequent software, security protocols, and hardware upgrades are likely to follow the same technical lineage. The “Digital Non-Aligned Movement” Perhaps the most complex fallout of this decoupling is felt in the Global South. Developing nations, many of which are in the midst of their own digital transformations, now find themselves in an uncomfortable position. They are being pressured to choose between the two technological poles, a choice that carries significant economic and diplomatic risks. For a developing economy in Africa or Latin America, U.S. technology offers high security and integration with Western financial markets. However, Chinese technology often provides a lower barrier to entry and a focus on state-led development goals. The danger, according to many economists, is that this “tech-polarization” will lead to a lack of interoperability. If a startup in Nairobi develops an app on a Chinese cloud platform, will it function seamlessly for a user in a market dominated by American standards? Furthermore, the “friend-shoring” of supply chains where production is moved to politically allied nations is creating new winners and losers. Countries like Vietnam, India, and Mexico have seen an influx of investment as manufacturers seek to diversify away from China. However, other developing nations that lack the infrastructure or political alignment to join these new “trusted” supply chains risk being further marginalized. A World of Redundancy and Risk Critics of decoupling argue that the process is not only expensive but potentially futile. The global tech industry is so deeply intertwined that total separation may be impossible without catastrophic economic damage. Apple, for instance, still relies heavily on Chinese assembly, while Chinese tech firms still utilize American software architectures. Moreover, the environmental cost of decoupling is often overlooked. As both superpowers race to build redundant factories and secure mineral supplies, the efficiency gains of globalized production are lost, leading to increased carbon footprints and resource competition. The “Green Transition” itself is at risk, as solar panels and electric vehicle batteries are caught in the crosshairs of trade restrictions. The US-China tech rivalry is no longer a peripheral trade dispute; it is the defining feature of modern geopolitics. The shift from a globalized market to a fractured one represents a fundamental change in how the world innovates and communicates. While “strategic autonomy” may offer a sense of security for the superpowers, it introduces a new layer of volatility for the rest of the world. As we move forward, the challenge for the international community will be to establish a “digital floor” a set of minimum standards and protocols that allow the world to remain connected even as political systems diverge. Without such a framework, the “Fractured Circuit” may not only slow the pace of global innovation but also deepen the divide between the connected and the disconnected, leaving the most vulnerable nations to navigate a world of incompatible systems and dwindling choices.

South Korea is one of the most remarkable countries in the world. Shortly after the mid-20th century, South Korea was one of the poorest countries in the world. According to World Bank, it had a per-capita gross domestic product (GDP) of roughly 159 USD in 1960. The Helen Kellogg Institute For International Studies (University of Notre Dame) points out that South Korea’s per-capita income in early 1960 was lower than Haiti, Ethiopia and Yemen and over 40% of the South Korea’s population was suffering from absolute poverty. However, with right public policy actions implemented in the right direction, South Korea was among the most rapidly growing economies in the world by the start of 21st century. Do you know that South Korea had exponentially increased its per-capita GDP to 12,710 USD (in 2000) that then sky-rocketed to over USD 36000 in 2025? A question that one would ask is, what formed the basis of this rapid economic growth and a resulting reduction in poverty in South Korea? A World Bank report “Republic of Korea: Four decades of equitable growth” points out that South Korea has experienced rapid economic growth in 1990, where its real GDP grew by over 5 percent each year except 1998. Absolute poverty decreased incredibly in South Korea during 1975 – 2001. Those who remained poor were either had low educational achievements or were unemployed or underemployed. In 1975, South Korea earned USD 12.4 billion through trade that then skyrocketed to a trade volume of USD 314.6 billion in 2002. Thus, in a span of 27 years, trade volume of South Korea increased over 25 times which is nothing less than a remarkable success story. A journey that helped South Korea to achieve rags-to-riches status in 3 decades time. In my opinion, education made a significant difference in South Korean society and made it more socially resilient to meet the challenges of today and tomorrow. As we all know that with education and the use of common sense, we make better life choices that then helps us is attaining better results for us and our families. Do you know that South Korean society is one of the most educated societies in the world? As per Organization for Economic Co-operation and Development (OECD), over 58% of masses in South Korea has tertiary education. In-fact, South Korea performed better than Luxembourg, Australia, Norway, Netherlands and several other countries when it comes to percentage of masses (25 – 64 years) who have completed tertiary education in 2025. Highly educated masses mean highly qualified labour that can help any country in commencing sustainable social and economic development over a sustained period. We all are familiar with Samsung Electronics and the leading role it plays in connecting countries and people across the globe. Do you know that Samsung Electronics is a South Korean company? In 2025, Samsung Electronics declared a revenue worth a whooping USD 233.3 billion. Similarly, Hyundai Motor Co., Ltd is another South Korean motor vehicles and parts manufacturing company. According to Forbes, in 2025, Hyundai Motor Co., Ltd declared a financial revenue worth a whooping USD 128.4 billion including a profit of USD 9.1 billion. Hyundai Motor Company pointed out that it sold over 4 million vehicles worldwide out of which close to a million vehicles were electrified vehicles. Likewise, Kia Corporation is South Korea’s oldest motor vehicles manufacturing company and has a capacity to produce over 1.4 million vehicles each year. Kia Corporation has over 40,000 employees and normally reports an annual revenue of over USD 17 billion each year.  LG Electronics is another South Korean tech giant that reported a revenue of USD 62 billion in 2025. Finally, SK Hynix Inc is another South Korean company that manufactures semiconductor products and had reported an annual revenue of USD 51.2 billion in 2025 with profits over USD 18 billion. It is crucial to mention here that SK Hynix Inc is among the largest memory chip manufacturer’s in the world and acts as a rival to Samsung. Moreover, it is an important memory supplier to Apple and the components supplied by SK Hynix Inc are widely used in iPhone, iPad and MacBooks. Carnegie Endowment for International Peace reports that South Korea’s gross domestic product (GDP) was USD 1.71 trillion in 2023 and its per-capita GDP was USD 33,121. Do you know that in 2020, South Korea invested USD 112.9 billion on domestic research and development (R&D). Globally, it stood on fifth position when it comes to spending on R&D. Top spending on R&D in 2020 was commenced by United States with USD 720.9 billion, followed by China with USD 582.8 billion, Japan with USD 174.1 billion and Germany with USD 143.4 billion. Despite commencing rapid social and economic development, South Korea has not compromised on environmental conservation. According to The Korea Times newspaper, South Korea planted roughly 10 billion trees from 1960 to 1980. As a direct result of this, Korea Forest Service (KFS) reported that South Korea’s forest growth rate exponentially increased from 50 cubic meters per hectare in 1990 to 148 cubic meters per hectare in 2015. Thus, in a span of 25 years, forests in South Korea observed nearly 3 times increase in growth rate. It serves as an excellent example that we can commence economic growth, eradicate absolute poverty and conserve environment simultaneously. The already discussed example shatters the paradigm that we must compromise and degrade environment to commence economic growth. A successful reforestation program in South Korea proves the fact that we can commence economic growth and protect environment simultaneously. Do you know that trees are the most inexpensive carbon capture and storage devices? Moreover, healthy forests help us to decrease the concentration of carbon dioxide gas in atmosphere, mitigate climate change, prevent biodiversity loss, avoid landslides and provide clean air and water by decreasing pollution. We must understand this basic fact that for our commenced economic growth to be sustainable, we must preserve and protect environment. In-fact, Sustainable Development has 3 pillars

“Shall we put an end to the human race; or shall mankind renounce war?”— Bertrand Russell and Albert Einstein, The Russell–Einstein Manifesto, 1955 War hysteria sweeping the world shows nothing more than absolute insanity on the part of all belligerent parties. Humanity can explore distant planets, communicate across continents within seconds and build machines capable of imitating human intelligence, yet it still appears incapable of resolving disputes without bombing cities, starving populations and producing generations of traumatised children. There are people struggling with poverty, food shortages, unemployment, high inflation, disease and homelessness. Then there are their so-called leaders—some elected, some imposed, some in uniform and others protected by manufactured democratic legitimacy—who remain obsessed with gunfire, drones, missiles, nuclear warheads and weapons of mass destruction. This is not leadership. It is organised madness presented as patriotism. Look at Gaza. Nearly 1.9 million of its 2.1 million inhabitants remain displaced, many of them repeatedly, while restrictions and operational constraints continue to obstruct humanitarian relief. Families are pushed from one devastated neighbourhood to another, carrying whatever they can salvage. For them, “strategic operations” mean ruined homes, unsafe water, inadequate food, fractured hospitals and children learning the geography of survival before they learn the alphabet. Look at Ukraine. During the first six months of 2026, the United Nations verified 1,396 civilian deaths and 7,978 injuries—a 37 per cent increase over the corresponding period of 2025. June recorded the highest monthly civilian casualty total since April 2022. Yet the war continues to be discussed through maps, territorial percentages and weapon packages, as though the dead were merely inconvenient entries in a military balance sheet. Look at Sudan, where a contest for power has become a war against the population itself. About 19.5 million people face acute hunger, five million are at emergency levels and an estimated 825,000 children under five are expected to suffer acute malnutrition during 2026. Several areas remain at risk of famine while humanitarian agencies struggle for access and resources. The world can finance bullets that arrive on time, but food and medicine are eternally delayed. Now look at the ever-expanding Middle Eastern conflict. What began as confrontation involving Israel, the United States and Iran has steadily drawn other states into its orbit. The latest joint military strikes by the United States and Saudi Arabia against Iran-aligned armed groups operating in Iraq demonstrate how quickly regional conflicts acquire new participants and new frontlines. Iraq, itself struggling to preserve its sovereignty and internal stability, has once again become a battleground for rival powers. Every new military operation is justified as retaliation or deterrence, yet each one merely widens the geography of destruction and pushes peace still further beyond reach. The consequences are not confined to the combatants. Energy infrastructure, shipping routes and humanitarian supply corridors remain vulnerable, while the risks of slower global growth, renewed inflation and economic instability continue to rise. Once again, decisions taken in heavily guarded capitals are paid for by ordinary families thousands of kilometres away. That is the cruel arithmetic of modern warfare. The latest strikes in Iraq also expose another dangerous reality. Countries that once claimed merely to support one side diplomatically are now becoming direct military participants. Every additional state entering the conflict reduces the space for negotiation while increasing the possibility of miscalculation. History repeatedly demonstrates that wars rarely remain confined within the boundaries imagined by those who initiate them. They expand geographically, economically and morally, dragging into their vortex nations and populations that neither sought nor desired confrontation. A missile is fired in the Middle East and transport and electricity can become more expensive in Pakistan. A shipping route is blocked and food prices rise in poor importing countries. Oil installations are attacked and workers whose wages were already inadequate are advised to “adjust” their household budgets. The poor neither declare wars nor negotiate ceasefires. They merely finance wars through taxes, inflation and deprivation—and then provide their bodies. The scale of this moral collapse is evident from global priorities. Military expenditure reached a record US$2.887 trillion in 2025, marking the eleventh consecutive annual increase. In the same world, approximately 645 million people faced hunger during 2025 and around 2.7 billion could not afford a healthy diet. There is no global shortage of money. There is a shortage of conscience, political courage and human decency. Governments insist that military expenditure ensures security. Security for whom? What security does a mother possess when she cannot feed her children? What security is enjoyed by an unemployed graduate, a patient unable to afford medicine or a farmer crushed by fuel and fertiliser prices? Of what use are supersonic aircraft to citizens living without clean water, functioning schools or basic healthcare? Even more frightening is the renewed worship of nuclear weapons. At the beginning of 2026, the world possessed an estimated 12,187 nuclear warheads. About 9,745 were held in military stockpiles for possible use, while between 2,100 and 2,200 deployed warheads remained on high operational alert. Leaders speak of deterrence, escalation ladders and tactical nuclear options as though they were discussing pieces on a chessboard rather than devices capable of extinguishing cities and contaminating generations. The language of war has also been deliberately sanitised. Bombing becomes an “operation”; dead civilians become “collateral damage”; starvation becomes “food insecurity”; demolished homes become “infrastructure losses”; and children torn apart by explosives become “unintended consequences.” Such expressions do not explain reality. They hide it. They allow those ordering violence to sleep peacefully while others search for their loved ones through rubble. Responsibility in every conflict is not necessarily equal. International law distinguishes aggression from self-defence, occupation from resistance and military targets from civilians. But no invocation of history, religion, national security or territorial ambition can justify treating innocent human suffering as politically useful or morally irrelevant. Every party that deliberately attacks civilians, blocks essential relief, uses starvation as leverage or prolongs war for domestic political survival must be held accountable. Citizens must also confront their own complicity. War hysteria cannot survive without

For much of the past half-century, the Middle East was described in binaries: Arab and Israeli, Sunni and Shia, American ally and adversary. That framework is no longer sufficient. In the span of 18 months, two events have forced a fundamental reassessment of regional order: a Chinese-brokered handshake between Saudi Arabia and Iran in March 2023, and the eruption of war in Gaza in October 2023. Together, they have set in motion a realignment that is testing old alliances, elevating new mediators, and leaving the future of American-backed normalization efforts deeply uncertain.   The significance extends well beyond the region. How power is distributed between Riyadh, Tehran, Ankara, Cairo and Tel Aviv shapes global energy markets, maritime security in the Red Sea, nuclear non-proliferation, and great-power competition between the United States and China. What emerges is not a new stable order, but a fluid period of transactional diplomacy in which ideology is increasingly subordinated to regime survival and economic interest.   A Rapprochement Brokered in Beijing   The agreement announced on March 10, 2023, that Saudi Arabia and Iran would restore diplomatic relations after a seven-year rupture was remarkable less for its content than for its venue. The deal was negotiated over four days in Beijing, with China acting as guarantor.   The context was pragmatic. For Saudi Arabia, under Crown Prince Mohammed bin Salman, foreign policy has become inseparable from Vision 2030, an ambitious plan to diversify the economy away from oil. That vision requires regional calm. The years preceding the deal saw drone and missile attacks on Saudi oil infrastructure at Abqaiq and Khurais, a costly and inconclusive war in Yemen where Tehran backed the Houthi movement, and rising oil price volatility. De-escalation with Iran offered a path to contain those risks.   For Iran, the calculus was equally material. Facing stringent international sanctions, inflation above 40 percent at the time, and domestic unrest following the death of Mahsa Amini in 2022, Tehran sought diplomatic breathing room and economic openings, particularly with Gulf states that could provide investment and trade channels.   China’s role was both opportunistic and strategic. As the largest buyer of both Saudi and Iranian crude, Beijing had unique leverage and a direct interest in the stability of Gulf shipping lanes. The mediation allowed China to present itself as a responsible alternative to the United States, a power broker capable of delivering outcomes Washington could not, given its lack of diplomatic ties with Iran. Analysts in Washington and Brussels were quick to note the limits of this shift: China did not replace the U.S. security umbrella that Saudi Arabia and the Gulf states continue to rely on, nor did it offer a framework for resolving deeper sectarian and strategic rivalries. The agreement did not settle disputes over Yemen, Syria, Lebanon, or Iran’s nuclear program. It did, however, establish that regional rivals were willing to manage competition through dialogue rather than direct confrontation, and that Beijing was willing to facilitate it.   The Abraham Accords on Hold   If the Saudi-Iran détente represented one vector of realignment, the Abraham Accords represented another. Signed in 2020, the U.S.-brokered agreements that normalized relations between Israel and the United Arab Emirates, Bahrain, and Morocco marked a paradigm shift. They rested on the premise that shared concerns over Iran and shared economic interests could advance Arab-Israeli normalization even without resolution of the Israeli-Palestinian conflict.   By mid-2023, attention had turned to the potential prize of Saudi-Israeli normalization. U.S. officials pursued an ambitious package that would have linked a Saudi-Israel deal with U.S. security guarantees for Riyadh and support for a civilian nuclear program, alongside concessions toward the Palestinians.   The war in Gaza, triggered by Hamas’s attack on Israel on October 7, 2023, which killed approximately 1,200 people and led to the abduction of more than 250 hostages, and followed by Israel’s military campaign in Gaza, which Gaza health authorities report has killed tens of thousands, has fundamentally altered that trajectory.   Saudi Arabia has not abandoned the idea of normalization, but it has recalibrated its public conditions. Riyadh has stated repeatedly that any deal now requires a credible, irreversible path toward a Palestinian state. This position reflects both genuine concern over the humanitarian situation in Gaza and a reading of domestic and wider Arab public opinion, where images from the war have generated widespread anger.   For the UAE and Bahrain, which maintained their embassies in Israel throughout the war, the Accords have endured but become more subdued. Economic and security cooperation, particularly on technology, trade, and air defense against Iranian drones, has continued behind closed doors. Public-facing celebration of the accords, however, has largely been suspended. The experience has highlighted a duality: the Accords have proven resilient as state-to-state security arrangements, but fragile as instruments of broader regional integration without progress on the Palestinian question.   Gaza and the Redistribution of Influence   The prolonged conflict in Gaza has accelerated several regional trends. First, it has restored the centrality of the Palestinian issue to Arab diplomacy, after a period when many policymakers assumed it could be sidelined.   Second, it has empowered non-state actors and redefined deterrence. The near-daily exchange of fire between Israel and Hezbollah until a late-2024 ceasefire, attacks on international shipping by the Houthis in the Red Sea that disrupted an estimated 12 percent of global trade at its peak, and direct Iranian-Israeli missile exchanges in April 2024 demonstrated that escalation management has become the defining security challenge of the region.   Third, it has created space for middle powers to mediate. Qatar, alongside Egypt and the United States, emerged as a central mediator in hostage and ceasefire negotiations due to its channels to Hamas. Turkey has sought to leverage its political support for the Palestinian cause while maintaining economic ties with Israel. Oman has continued its quiet role as a back-channel facilitator.   For the United States, the war has illustrated both its indispensability and its constraints. Washington remains the only power capable

The recently published PRIME Plus report, An Assessment of the FY2026–27 Federal Budget Through the Lens of Economic Freedom, deserves appreciation for shifting the debate beyond conventional budget arithmetic. Rather than asking merely whether taxes have increased or decreased, it examines whether the budget enlarges or restricts the freedom of individuals and businesses to produce, invest, trade and innovate. That alone makes it a valuable contribution to Pakistan’s policy discourse. The report of Policy Research Institute of Market Economy (PRIME) correctly observes that Pakistan’s formal economy bears a disproportionate tax burden while much of the informal sector remains outside the effective tax net. It questions tax expenditures exceeding Rs 2.35 trillion, highlights the crowding out of private investment by government borrowing, welcomes tariff rationalisation and criticises regulatory uncertainty. These issues deserve much wider public attention. PRIME’s analysis also points towards a deeper weakness in Pakistan’s reform discourse: we discuss economic freedom without first securing constitutional governance. The distinction is fundamental. International indices commonly measure economic freedom through taxation, trade openness, government spending, financial markets and regulatory efficiency. These indicators matter. Lower barriers to enterprise can promote investment, innovation and competition. They answer only part of the question. Why do countries with similar tax rates produce very different economic outcomes? Why do investors accept higher taxation in some jurisdictions while avoiding countries with lighter tax burdens? Why do some economies flourish with relatively large governments while others stagnate despite repeated concessions? The answer lies primarily in institutions. James Buchanan argued that public finance cannot be analysed independently of the constitutional rules under which governments operate. Douglass North demonstrated that long-term development depends upon institutions that reduce uncertainty, enforce contracts and create predictable incentives. Centuries earlier, Ibn Khaldun linked prosperity with justice, moderation in taxation and restraint upon arbitrary power. Excessive intervention, unpredictable fiscal demands and rent-seeking, he observed, ultimately weaken both economic activity and state revenues. These intellectual traditions converge on one central proposition: economic freedom is not created simply by lowering tax rates. It emerges from constitutional governance. Pakistan’s experience illustrates this clearly. Successive governments have offered tax holidays, created special economic zones, reduced customs duties and announced investment facilitation mechanisms. Investment nevertheless remains subdued. Investors do not merely compare tax rates; they compare legal systems. They ask whether contracts will be enforced within a reasonable time, whether regulations will survive political transitions, whether tax liabilities can be altered retrospectively and whether executive discretion outweighs parliamentary certainty. These are questions of constitutional governance rather than fiscal engineering. The same principle applies to taxation. Pakistan’s problem is frequently described as one of high taxation. That diagnosis is incomplete. The deeper problem is unequal taxation. The salaried class in formal sector is fully documented, its tax is deducted before income reaches employees, and its compliance burden continues to rise. Large segments of commerce, services and agriculture operate under very different fiscal realities. The issue is not merely how much tax is collected, but whether equal citizens are governed by equal fiscal rules. A system built around withholding taxes, presumptive taxes, minimum taxes and sector-specific exemptions creates unequal citizenship before the law. It also encourages informality. Businesses do not remain undocumented only because rates are high. Formal participation imposes greater compliance costs while offering few institutional benefits. Documentation without trust becomes compulsion rather than reform. The PRIME report also notes that government borrowing crowds out private investment because banks prefer sovereign lending over commercial risk. This is not simply a banking failure. When governments repeatedly finance deficits through domestic borrowing, banks act rationally by purchasing government securities. Financial markets are responding to distorted fiscal incentives created by public policy. Interest payments and defence together consume nearly 94 percent of net federal revenue, leaving little fiscal space for education, healthcare, scientific research, digital infrastructure, justice administration and productive public investment. The challenge is not merely that government spends too much; it is that public priorities have become distorted. Expenditure that strengthens courts, education, digital infrastructure, research, public health and efficient regulation expands future economic freedom because it reduces uncertainty and lowers transaction costs. Spending absorbed by debt servicing and institutional inefficiency does not. Constitutional Political Economy therefore distinguishes between the size of government and the quality of government. Fiscal federalism is another neglected dimension. The Constitution (Eighteenth Amendment) Act, 2010 reshaped the distribution of fiscal powers. Provincial sales taxes, fragmented administrations and overlapping jurisdictions now influence business decisions daily. Economic freedom cannot be assessed through the federal budget alone. The constitutional structure governing taxation matters as much as the annual Finance Act itself. Pakistan’s economic challenge is consequently larger than budget reform. Markets flourish where laws are predictable, taxation is neutral, contracts are enforceable, property rights are secure and governments remain subject to constitutional restraints. These conditions cannot be created through a single Finance Act. They require a durable commitment to constitutional governance. The value of the PRIME report lies in encouraging this broader conversation. The next step is to recognise that economic freedom rests upon a stronger constitutional foundation. Where constitutional governance is weak, economic reforms remain temporary. Where it is strong, markets can generate prosperity without constant discretionary intervention. Pakistan’s recurring fiscal crises are symptoms rather than the disease. The underlying ailment is institutional. Budgets can redistribute resources, but only constitutional governance can establish equality before law, predictable taxation, secure property rights and meaningful limits on arbitrary state power. Economic freedom, therefore, is neither the starting point of development nor a concession to be distributed through annual Finance Acts. It is the outcome of a constitutional order in which taxation rests on representation, public borrowing is subject to accountability, contracts and property are protected, and executive power remains bounded by law. In a rent-distributing state, freedom is rationed through exemptions, influence and discretion; in a constitutional state, it is secured for all through equal rules. Unless Pakistan reforms the institutions that determine who is taxed, how public money is spent, who bears the cost of debt and how state power is

There is a particular kind of exhaustion that sets in when a war refuses to end on schedule. Five months into the conflict between the United States and Iran, we are living through it. Ceasefires are announced and collapse within weeks. Strikes are billed as decisive and are followed, days later, by more strikes. Each side insists the other will soon come to its senses, and each side is wrong. What we are watching is not a war moving toward resolution. It is a war that has become self-sustaining, and the longer it runs, the more countries get pulled into its logic whether they wanted a role in it or not. Saudi Arabia is the clearest example. For nearly four years, Riyadh had quietly extracted itself from the Yemen war, treating the 2022 ceasefire with the Houthis as one of the few unambiguous foreign policy wins of Crown Prince Mohammed bin Salman’s tenure. That restraint is now gone. When the Houthis resumed missile fire at Israel in solidarity with Tehran, and then began striking Saudi oil infrastructure directly, Riyadh had no real choice but to respond. It bombed Hodeidah. The Houthis retaliated against Aramco facilities in Yanbu and Jizan. A conflict Saudi Arabia spent years trying to bury is now, again, live on its border, not because Riyadh chose it but because a war between Washington and Tehran left no room for neutrality. This is the pattern worth naming plainly: nobody in this conflict is fighting the war they intended to fight. Washington launched its campaign framed around Iran’s nuclear program, wagering that decisive strikes would force capitulation or collapse. Instead it has strikes running past the two-week mark with no clear terminus, American service members killed in Jordan and Iraq, and a president publicly conceding that the exit could be “diplomatic or military” — which is another way of saying nobody currently knows how this ends. Iran, for its part, has responded to devastating strikes on its cities not with capitulation but with exactly the kind of asymmetric, proxy-driven defiance its doctrine was built for, activating fronts in Iraq, the Gulf, and now Yemen that cost it little and cost everyone else a great deal. The Strait of Hormuz tells the same story in economic terms. Daily vessel traffic through one of the world’s most important oil chokepoints has fallen to a small fraction of its prewar level. That is not an abstraction. It shows up in tanker insurance premiums in Piraeus and London, in fuel costs in Mumbai and Rotterdam, in the balance sheets of countries that have precisely nothing to do with this fight. War aims that once seemed narrowly bilateral — Washington versus Tehran, over centrifuges and missile stockpiles — have metastasized into a tax on global trade that nobody voted for and nobody can opt out of. It is tempting, watching this unfold, to look for a single culprit. Commentators sympathetic to Washington will point to Iran’s decades of proxy warfare, its nuclear ambiguity, its crackdown on its own protesters, and argue the current campaign is simply overdue accountability. Commentators sympathetic to Tehran will point to a US-Israeli strike that killed Iran’s Supreme Leader and ask what state, faced with the assassination of its head of state, would not treat that as an act of war demanding a response. Both arguments contain real grievances. Neither survives contact with what has actually happened since: a conflict that both sides insist is about narrow, defensible aims but that neither side has been able to keep narrow. Wars rarely stay the size their architects intend. What should worry observers most is not any single strike or retaliation but the absence of an exit ramp anyone believes in. Ceasefires here have not functioned as steps toward peace; they have functioned as pauses for rearmament, evidenced by how quickly each one has collapsed back into nightly bombing. That is the signature of a conflict without a theory of victory — one where both governments can inflict real pain on the other indefinitely, but where neither can convert that pain into a settlement it can sell to its own public. In that kind of war, the fighting does not stop because someone wins. It stops, if it stops, because the costs finally exceed what either government’s domestic politics can absorb — and on the evidence of the past five months, that threshold keeps receding rather than approaching. Saudi Arabia’s reluctant return to the Yemen battlefield should be read as an early warning rather than a footnote. It shows how a conflict that both Washington and Tehran describe as fundamentally about themselves keeps finding new participants who never agreed to join. If this war continues on its current trajectory, the question worth asking is not which superpower prevails, but how many other countries, currencies, and shipping lanes get quietly conscripted before it does.