What explains these problems in the Pakistani economy?

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Ironical as it may sound, Imran Khan actually wanted to build a team of credible economists when he assumed power in 2018. However, the entrenched fundamentalism in Pakistani polity prevented this from happening. Princeton economist Atif Mian was forced to resign from the Economic Advisory Council (EAC) led by Prime Minister Imran Khan due to pressure from religious hardliners because Mian was an Ahmadi. While Mian said that he resigned from EAC for “the sake of the stability” of the government, which was “facing a lot of adverse pressure regarding my appointment from the Mullahs…and their supporters”, Asim Ijaz Khawaja, a Sunni Muslim economist who teaches at Harvard Kennedy School, also quit EAC in protest against Mian’s ouster, HT reported in September 2018.

“He (Imran Khan) inherited a bad economy, but leaves it in even worse shape”, Mian said in a Twitter thread after Imran Khan’s government left office. “The larger failure was an incapacity to understand Pakistan's macro challenges. Pakistan Tehreek-e-insaf (PTI, Khan’s party) inherited a currency crisis that was already months in motion Yet the new government had done no planning. Precious time & reserves were wasted with silly schemes… because government policy went for the usual short cuts: open capital account for speculative portfolio investment, encourage unproductive real estate investment, continue to subsidize an elite-favoring rentier economy, go on foreign begging trips etc.”, Mian added.

One of the biggest problems facing the Pakistani economy has been a low investment rate, which basically means that the fruits of present growth are diverted instead of supporting future growth. “The combined effect of extremism and an unproductive rent-seeking elite is that Pakistan has one of the lowest investment rates in the world. Pakistan invests only 15% of its output compared with 30% for the rest of South Asia. This has led to diminished productivity. Pakistan’s total volume of exports has not risen since 2005. It has become a nation of consumers with limited capacity to produce and innovate”, Mian wrote in a 2019 New York Times article.