The forecast by Economic Intelligence Unit predicted Pakistan’s default on its external debt in 2024. Needless to say and judging by the political and economic events of the past year, one can see that the year 2024 is going to be eventful. Numerous challenges plague Pakistan’s economic situation and one of the major factors contributing to these challenges is extensive government intervention in various sectors. The extensive government footprint in the country is exhausting the nation and its resources. with over 200 state-owned enterprises (SOEs), Pakistan is burdened with over two trillion financial liabilities in these entities. The economic challenges faced by Pakistan are deeply intertwined with the government’s footprint in various sectors. The extensive government intervention, characterized by policies, regulations, and bureaucratic obstacles, has significantly impeded the growth and efficiency of industries in the country. This has resulted in a lack of innovation, reduced productivity, and a detrimental impact on the overall business environment. In looking to the future, policymakers must address these challenges and implement strategies that facilitate economic growth, alleviate the burden of state-owned enterprises, and establish an environment conducive to innovation and productivity. By doing so, Pakistan can pave the way for a more robust and sustainable economic landscape. Pakistan has also miserably failed to increase its foreign direct investment in the country, despite an ideal geographical location, abundant natural and human resources. The investment rate in Pakistan stands at 15 percent – less than the half of average investment rate in South Asia. According to recent studies, private investment in Pakistan is lower than 10 percent of the GDP. In order to understand the poor foreign direct investment situation in Pakistan, it is essential to delve into the root causes and the challenges that have impeded the inflow of foreign investment into the country. Pakistan has also miserably failed to increase its foreign direct investment despite an ideal geographical location, abundant natural and human resources. One of the primary reasons for the low FDI in Pakistan is the governance environment and regulatory framework, which is characterized by weaknesses and challenges. Repeatedly, economic studies have empirically documented the weaknesses in the country’s governance model. Therefore, it comes as no surprise when the latest World Bank Report outright rejected Pakistan’s Economic Model. These weaknesses have created an environment that is not conducive to foreign investment. Then there is a long history of challenges faced and posed by Independent Power Producers in Pakistan which illustrate the hindrances within the energy production sector. The extensive government intervention in this sector has led to challenges in energy production, liquidity, and transmission. These challenges once again reflect the overall gravity and impact of government intervention on different sectors, including the energy sector, which is crucial for economic growth. On the other front economic challenges such as high tax rates, inadequate infrastructure, and low-skilled labour, also play a role in deterring foreign investment. The tax regime is complex and ineffective due to continuous arbitrary changes to it in the form of SROs. Addressing these challenges and creating a more conducive environment for foreign investment requires a comprehensive approach that involves not only economic reforms but also governance reforms and improvements in regulatory frameworks. Simultaneously, the lack of innovation and reduced productivity due to extensive government intervention has also hindered the business environment, making it less attractive for foreign investors. The brain drain phenomenon over the last decade is not an isolated event. it has stemmed as a result of continuous disregard for corrective measures in the economic framework. Addressing the challenges of poor foreign investment in Pakistan requires a multi-faceted approach that involves addressing governance weaknesses, improving the regulatory framework, and undertaking economic reforms to create a more favourable environment for foreign investors. Finally, the quality of education in Pakistan has experienced a decline, further compounding the economic struggles the country faces. While a large government footprint in the public education system is something that countries take pride in, Pakistan’s public education system is plagued by red-tapism, redundant curricula, and the hiring of unqualified teaching staff. As a developing nation, it is crucial to address these educational challenges to equip the workforce with the necessary skills for driving economic growth and development. The issue of low investment levels coupled with the deteriorating quality of education is a complex one and is further compounded by increasing illiteracy rates. The need for strategies that focus on increasing access to education, especially in primary and secondary education, is crucial in addressing this challenge. Developing countries often face evolutionary studies related to educational fields, and Pakistan is no exception. Improvement in educational infrastructure and curricula is essential for the economic development and prosperity of the nation. Furthermore, there is a pressing need for the government to create policies that facilitate the development and implementation of quality technological infrastructure. The availability of internet services, bandwidth, and networks, as well as the quality of hardware and software, plays a pivotal role in successfully implementing e-governance in the country. An ICT-oriented SME policy that underscores the importance of technology in creating value within businesses is essential for fostering economic growth. Despite Pakistan’s aspirations to become a digital economy, its existing digital infrastructure requires significant improvements to fully realize its potential. The negative impact of the inadequate implementation of digital government policies has been evident, especially during unprecedented challenges such as the COVID-19 pandemic. The year 2024 will not be any different from the last seventy-six years if we continue to ignore the need for urgent remediation of the economy. Only through concerted, targeted efforts can the country hope to overcome these obstacles and pave the way for sustainable economic growth and development. The writer is Foreign Research Associate, Centre of Excellence, China Pakistan Economic Corridor, Islamabad.