I'd disagree. I think we have better prospects in red ball cricket than white ball. You have the likes of Azan, Zaryab, Huraira, Saad, Shahzaib, Shamyl and Maaz who can all play the long game. As far as pacers are concerned, Khurram is a high quality option. Salman Mirza can be groomed as a good opening bowler. I'm really glad to see that Karachi's Muhammad Umar is back this season, he is a pretty decent long format bowler and someone the management must track. There is also Ali Raza. Spinners, especially wrist spinners take a lot of time to develop which is why players like Faisal Akram should get as much game time as possible. The issue isn't that we don't have talent, the issue is the management's persistence with tried and tested options and marquee names who just aren't interested in the long format.
Domestic cricket in Pakistan is not an accurate judge of a batters ability because of multiple reasons
1. The pitches are lottery
2. Our international test cricketers hardly play domestic cricket due to overlapping schedules
3. Our domestic fast bowlers are not able to extract bounce from the pitches.
Most of our domestic batters crouch before they face the ball as there's no bounce. Huraira, Shahzaib, Shamyl, & Maaz I have seen and even though some of them are topping the scoring charts, they are in no way ready to play red ball cricket. About Azan I have only heard good stuff so I'll give you that.
Pakistan does not have any test class fast bowler and those who have a bit of potential are not focused on red ball cricket. Ali Raza was injured and post injury, he decided to partake in T20 cricket instead of focusing on his recovery. Umar is relatively taller but he does not have the pace that is needed at the highest level. Mirza is not a test bowler.
Faisal Akram is a good prospect if his priorities remain red ball cricket.
We do have a talent crisis when it comes to test cricket and we should admit that. Our last great all-rounder retired in the 90s. Our last great fast bowler retired in 2011. Post Younus we have been struggling to have a dependable middle order player. Our record in every foreign country is so terrible that it's not even worth looking at.
No series win in England since 96. No series win in Australia ever and we last won the test there in 95. Consistent whitewashes in South Africa. Even the team that we bashed for fun New Zealand is now a dreaded test location for us.
I do agree that there's management failure as well but the onus to prepare yourself for test cricket is on the player as well. We can say that Pak public doesn't really want to watch test cricket so the players have no incentive to play it as they get neither fame nor money and we play so little red ball cricket that it's useless for the player anyway. I mean look at Shan Masood, he was the test captain of Pakistan but he makes 3 appearances in a year and then he's gone. Saud, Noman, etc. are also the same where you just see them for 10 days in the year and then they are just left on their own. Compare that to Root or Smith who are literally the faces of cricket even though they are also only active mostly for test cricket.
Test cricket is a labor of love and in this day and age of instant gratification, our players, management, & fans have no time for this & it shows in our results over the last one and a half decade.