POLICY BRIEF Dr. Moeed Yusuf Lessons from the“Champions of the 21st Century” Executive Summary Pakistan stands at a critical juncture. Where the National Security Policy(NSP) envisions a pivot to‘cooperative geo-economics,’ the country’s decision-makers face a perennial implementation paradox. Despite a consensus on the need for reform, structural governance issues and a lack of political will have stalled progress, leaving policymakers unable to break through bureaucratic logjams. This brief presents findings from the“Champions of the 21th 2nd Century” project, which analyses countries in the Global South that achieved over 450% GDP growth be tween 2001 and 2020. By examining the specific economic, political, and social factors used by seven distinct“Champions” – China, Vietnam, Myanmar, Ethiopia, Bangladesh, In donesia, and India – this brief offers evidence-based strate gies to overcome the inertia holding Pakistan back. The goal is to move beyond standard prescriptions and identify the operational“how” that allowed peer nations to succeed where Pakistan has lagged behind. The Context: Pakistan’s Implementation Crisis The genesis of this study lies in the observation that while Pakistan possesses exceptional potential, it has been surpassed by peers like India, Bangladesh, and Vietnam, who have transformed into economic powerhouses. • The Problem: Pakistan’s policy landscape is characterised by an abysmal implementation track record. Even well-intentioned policymakers are frustrated by deeply entrenched perverse incentive structures. • The Gap: Standard prescriptive analyses calling for‘better governance’ or‘transparency’ seldom work in practice. • The Opportunity: The NSP offers a clear vision; to actualize it, Pakistan requires‘out of the box solutions’ derived from comparable cases that successfully navigated similar bottlenecks. Comparative Analysis: Mechanics of Success The project examined seven countries that met the criteria of>50 million population and>450% growth. The analysis reveals that success was not dependent on a single political system but on specific, actionable reforms across three pillars. Lessons from the“Champions of the 21st Century” 1

i. Economic Engineering: Crisis as a Catalyst Data indicates that for many“Champions,” reforms were not organic but forced by crisis or a deliberate break from failure. • Trigger Points: India’s reforms were born from a Balance of Payments crisis and the Soviet collapse; Vietnam shifted due to the failure of central planning; China pivoted to integrate into the global economy. • Fiscal Discipline: Successful countries aggressively broadened tax bases. Bangladesh digitised tax collec tion, while India implemented cross-checking mecha nisms to reach‘hard-to-tax’ factions. • Financial Sector Revamp: A common thread is the reduction of state dominance. Vietnam allowed foreign in vestment in banking; India abolished industrial licensing and reduced public sector industries; Ethiopia and My anmar granted autonomy to their Central Banks. ii. Political Drivers: Decentralisation and Continuity Contrary to the belief that only authoritarianism yields growth, the data shows that policy continuity and decentralisation are the true drivers. • Devolution: China empowered local governments with control over revenue and expenditure, creating competition for growth. Ethiopia utilized ethnic federalism to manage diversity while driving development. • Policy Continuity: Vietnam and China utilized one-party systems to ensure long-term planning, while democratic India and Indonesia relied on‘consensus on economic logic’ across regime changes to maintain momentum. iii. Social Dynamics: The Human Capital Foundation Growth was sustained by heavy investment in social cohesion and human capital. • Education& Health: Vietnam prioritized universal prima ry education; Bangladesh focused on inclusive policies for vulnerable groups and gender parity in education. Key Data Matrix: Strategies of the Champions Appendix 1(at the end) is the table showing the list of countries studied for this project and the common themes that contributed to the Champion economies’ remarkable growth. The table covers the economic, political, and social factors that have contributed to the growth. Strategic Implications for Pakistan To implement the Geo-Economic pivot envisioned in the NSP, Pakistan must replicate the underlying mechanisms of these Champions. i. Break the“Logjam” via Deregulation(The Indian/ Vietnamese Model) The research highlights‘bureaucratic logjams’ as a primary failure. The data shows India succeeded by abolishing in dustrial licensing and reducing public sector industries. • Recommendation: Launch a regulatory reform to eliminate permission-based governance in key export sectors, mirroring Vietnam’s export-led approach. ii. Incentivise Implementation via Fiscal Decentralisation(The Chinese Model) Pakistan’s center struggles to push reforms. China solved this by giving local governments control over revenue generation. • Recommendation: Align the National Finance Commission(NFC) awards with performance indicators, empowering provinces to retain wealth generated through specific development milestones. iii. Enforce Policy Continuity(The Indonesian/Bangladesh Model) Pakistan suffers from policy reversals. Bangladesh and In donesia maintained economic trajectories despite political shifts. • Recommendation: Establish a cross-party“Charter of Economy” specifically ratified to protect the NSP’s geo-economic roadmap from political cycles, ensuring the policy continuity identified as a gap in Pakistan’s literature. Conclusion This preliminary investigation confirms that the“Champions of the 21st Century” did not rely on magic, but on breaking the status quo of their own administrations. Whether through the shock therapy of crisis(India) or the systematic devolution of power(China), these nations successfully dismantled the implementation bottlenecks that currently paralyse Pakistan. This brief serves as the foundation for a more detailed roadmap to operationalise the National Security Policy. Lessons from the“Champions of the 21st Century” 2

Appendix 1 Factors Why reforms? Fiscal Management Industrial Policy Revamping the Financial Sector Agricultural Reforms Decentralisation SEZs Ecosystem Privatisation China Globalisation + cultural revolution More powers to the local govt+ VAT replaced business tax Greater competition+ private sector financing encouraged Household ownership replaced collective ownership Transfer of decision making to local govts. Major contribution in GDP, FDI, exports, and employment Joint ventures encouraged Vietnam Socialist economy+ globalisation Expansion of tax net Attract foreign investment+ increase exports Partial privatisation + allowed foreign investment in Banking Sector Liberalised household farming autonomy+ land laws Power devolved to lower tiers of govt. Govt‘s inclination toward SEZs + tax incentives Simplified valuation process+ allowed IPOs + SOEs reduced Myanmar Ethiopia Economic Factors Realisation to achieve sustainable economic growth Budgetary management + sales tax replaced commercial tax+ raised income tax threshold PPPs+ technology and vocational training encouraged Agriculture led industrialisation Banks were given permits to open LCs+ Foreign banks opened Allowed private investment in the banking sector+ granted autonomy to the Central Bank Increased access to credit+ built supporting infrastructure Encouraged agro-based industrialisation Decentralisation after 2011 SEZs law enacted in 2014 Centralised SEZ manage ment Reduced state controlled in telecom and finance sectors+ profit making encouraged Introduced SAPs+ SOEs privatised Bangladesh Nationalisation failed IMF program mes+ broadened tax base+ progressive taxation+ digitized tax collection system Privatisation + SOEs returned to original owners Privatisation of state-owned banks+ allowed foreign banks + inclusive policy for vulnerable groups Access to high-yield seed varieties + improved irrigation+ credit facilities Power devolved to lower tiers of govt. Govt. encouraged new SEZs Returned SOEs to original owners+ privatised loss making SOEs Indonesia Tax Amnesty Schemes+ removal of oil subsidies Capital markets developed+ reduced power of state-owned banks Govt‘s priority to attract FDI through SEZs India BoP crisis+ globalisation Fiscal disciplinary measures+ tax net broadened on ‚hard-to-tax‘ factions Reduced public sector + industrial licensing abolished+ bureaucratic hurdles removed Market-based interest rates + encouraged competition in banks+ empowered stock markets Credit facilities+ curtailed the power of large landlords Power decentralised to state govts. A part of 1991 reforms Divestment after 1991+ privatized SOEs+ performance evaluation+ PPPs encouraged Lessons from the“Champions of the 21st Century” 3

Attracting Foreign Direct Investment (FDI) Remittances Small and Medium-sized Enterprises (SMEs) Infrastructural Development Corruption Type of Government Type of Party Political Dynamics Manufacturing and construction sectors attracted FDI Significant in value but contributed less to GDP growth SMEs were the actual engine that employed the workforce and increased exports Land, water, energy, and rail projects Strict control with the help of Central Commission for Discipline Inspection One-party socialist state Left wing Political crisis and economic reforms pre-1978 showing negative results Foreign investments protected Stabilised the economy+ ranked 10th highest recipient Govt. led investment+ increased lending Strict ministerial scrutiny+ frequent anti-corruption crackdowns Single-party autocracy Communist Strict control of CPV on media, public opinion and society Foreign entities allowed to own enterprises+ tax breaks and lengthy land leases introduced Improved investment climate+ offered greater incentive packages Defensive shield for the economy as funds were spent on basic survival and debt service Invisible stabiliser+ provided critical safety net for state-led growth Critical role+ one stop centers+ startups facilitated Enhanced competition+ ensuring continued rural development Legal framework for PPPs instituted+ upgraded public transport Increased govt investment in infrastructure The Good Governance and Clean Govt. initiative+ anti-bribery bill introduced Political Factors Multi-party praetorian state Federal Parliamentary Republic with multiparties USPD Nationalist Censorship relaxed+ prisoners released but military dominated Suppression prevailed Removed bureaucratic hurdles+ investment protected+ tax exemptions Second largest source of foreign exchange Sub-contracted RMG orders+ financing available+ VAT exempti ons Legal frameworks for PPPs+ improved transportation networks No strict control+ misappropriation of funds + institutionalised corruption Military-dominated rule Center right & center left Opposition suppressed+ arbitrary arrests+ strict control on media Manufacturing, agriculture, natural resources, and tourism sectors attracted FDI Evolved from chaotic, widespread bribery to sophisticated, systemic embezzlement Presidential Republic PDI-P (Centre-Left) Continued process of reforms Allowed foreign investors 100% equity + simplified investment procedures Main source of foreign exchange+ better skilled workers+ govt subsidies and tax breaks encouraged investment Improved access to finances+ encouraged innovation Increased investments by state govts and private sector + PPPs very successful Endemic feature+ huge scams+ TI rankings worsened Democracy Congress (center-left) and BJP (center-right) Soviet disintegration + Rise of BJP+ Mandal Commission Report+ Babri Masjid Lessons from the“Champions of the 21st Century” 4

Devolution of Power Role of Opposition Policy Continuity Transparency in Reforms Education Health Social Safety Nets Access to Information Provincial governments implement policies set by central govt No serious opposition Policies consistent due to same govt. Strict control The literacy rates improved Universal health system+ New Medical Reform Plan 2009 Basic income + pensions+ funded child-care Online portal for budget and financial reports Negligible opposition Regime stability led to policy continuity Strict control National curriculum more responsive to market demands Strengthening of health insurance system Limited and highly controlled The 2008 constitution allows for top-down approach Opposition onboard Moderate opposition ParliamentaStrict control ry debate Social Factors A 10-point education policy+ a 20-year plan No fees from grade I-X Universal health care is being developed Health care financing mechanisms Social Protection Strategic Plan Draft Right to Information Law was released in 2017 Decentralised power to local govt+ more autonomy over planning and budgeting Big bang decentralisation Negligible+ fragmented opposition Successive regimes followed a similar trajectory Strong opposition+ active role of civil society groups Some degree of continuity + long-term vision Strict control Elite could influence policy-making States opposed reforms for political gains but deep down those could foresee more autonomy and FDI No organised movement+ opposition only from Bombay Club Overall direction remains same Urban educated class knew of reforms+ congress suffered in elections Inclusive compulsory education policies+ food for education program+ teacher training Communitybased delivery System+ Nutrition program of 2003-10+ NGO‘s significant contribution Poverty alleviation and rehabilitation program+ National Social Security Strategy An online portal to access a wide range of government information The literacy rates improved Universal health coverage+ improved infrastructure Conditional cash transfer program+ non-cash food assistance+ subsidized fuel Online portal for govt information Key component in 5 year plans+ govt spending improved+ large contributions by state govts and private sector No universal health coverage+ expenditure is less than recommended Post reform poverty alleviation programs More emphasis after 1991 reform Lessons from the“Champions of the 21st Century” 5

Freedom of Press Violence Civil Services Reforms Strict control Limited Low Moderate Media reforms instituted+ social media considered enablers of democratisation Violence and illicit activities have been a constant irritant Extension of CSC to other bodies+ reduced red tapism Career-based to a working position-based model Civil Service Reform Strategic Action Plan+ emphasis on decentralization and meritocracy Gender Gender equality laws + highest women participation Low workforce participation of women Limited Press law provides freedom of speech, with some limitations recently Relatively free but dissenting voices quashed after 2014 Violence and agitation have been prevalent. Highly varies across regions Violence has increased since 1990s Limited success due to corruption and lack of accountability Women empowerment+ highest participation in the workforce Reforms to streamline civil services + One-Stop Service Centers+ E-Govern ment Initiatives Huge salary bills+ introduction of IT+ deregulation + one window mechanism Imbalanced gender ratio + female participation still very low Lessons from the“Champions of the 21st Century” 6

About the author Dr. Moeed W. Yusuf is the Vice Chancellor of Beaconhouse National University, Pakistan. Yusuf is also a Senior Fellow at the Belfer Center for Science and International Affairs at Harvard University’s Kennedy School. He previously served as National Security Adviser(NSA)/Special Assistant to the Prime Minister of Pakistan with the rank of Federal Minister. He was Pakistan’s youngest NSA and is credited with leading the process of formulating the country’s first-ever National Security Policy. As NSA, Yusuf was responsible for advising the Pakistani leadership on all aspects of national security and was engaged in conducting national security dialogues with counterparts around the world. Imprint Publisher Friedrich-Ebert-Stiftung(FES), Pakistan Office 25, Street 29, F-8/1 P.O. Box 1289, Islamabad, Pakistan Responsible Felix Kolbitz, Counry Director Hamayoun Khan, Programme Advisor Contact Tel:+92 51 2803391-2 info.pakistan@fes.de Design/Layout Faisal Rashid, IT and Communication Assistant The views expressed in this publication are not necessarily those of the Friedrich-Ebert-Stiftung(FES). Commercial use of the media published by the FES is not permitted without the written consent of the FES. FES publications may not be used for elec tion campaign purposes. January 2026 © Friedrich-Ebert-Stiftung(FES) Pakistan Office Further publications of the Friedrich-Ebert-Stiftung can be found here: ↗ pakistan.fes.de/publications Pakistan Office Lessons from the“Champions of the 21st Century” 7