Pakistan’s deepest crisis is no longer merely economic. Failing public finances are steadily lowering living standards, weakening the promise of citizenship and pushing society towards a deeper, potentially dangerous rupture.
We talk endlessly about foreign exchange reserves, IMF programmes, tax-to-GDP ratios, circular debt, exports and fiscal deficits, as if Pakistan were a functioning state with a difficult balance-sheet problem. That is a comforting fiction.
Behind the economic emergency lies a deeper breakdown: the citizen-state relationship has been degraded, while inequality, corruption, disorder and human deprivation have become routine.
A state that cannot finance basic services transfers its failure to households. Families pay more for electricity, gas, schooling, healthcare, transport and security, while wages and opportunities fail to keep pace. Hardship becomes a loss of dignity, patience and faith in the future.
When living standards fall year after year, society does not remain still. Frustration hardens, trust erodes and anger searches for targets. If adjustment continues to fall mainly on those least able to bear it, Pakistan risks a social crisis with deeply unpleasant consequences.
Pakistan has gradually become a hard state for the weak and a remarkably accommodating one for the powerful.For millions of ordinary citizens, the state appears mainly as a policeman, tax collector, electricity bill, bureaucratic obstacle or instrument of coercion. Those with money, influence or connections encounter another Pakistan: one where rules can be negotiated, files moved, taxes avoided, land acquired, police managed and consequences delayed.
Nowhere is this contrast clearer than in the lives of senior state functionaries. Deputy commissioners, secretaries and other powerful officials often inhabit a world of official residences, staff, cars, fuel, security, clubs, protocol and discretionary authority. The ordinary citizen, by contrast, waits outside offices, pays inflated bills, navigates broken services and pleads for decisions that should be routine rights. A civil service created to serve has too often become a privileged class insulated from the consequences of the system it administers.
This is not simply corruption in the conventional sense of bribes changing hands. It is a political economy of opportunism.Once rules are selectively enforced, influence matters more than compliance. If rule-breakers prosper while rule-followers struggle, dishonesty acquires an economic premium. Public office becomes a route to privilege, patronage replaces merit, and corruption becomes one of the ways the system works.
The consequences are visible everywhere. Pakistan enters the technological age with levels of deprivation that should be politically intolerable: roughly four in 10 children under five are stunted, a large share of the population lives in or near poverty, and millions of children remain outside school.
A stunted child is not simply shorter. Chronic malnutrition can impair cognitive and physical development. Across millions of children, Pakistan is damaging its future human capital before many of them ever enter a classroom or the labour market.
No country can neglect nutrition and education on this scale for decades and then wonder why productivity is low, the tax base remains narrow, exports fail to become sophisticated and growth repeatedly runs into structural limits.
The employment outlook is darkening too. Artificial intelligence may raise productivity, but it is also squeezing the entry-level and mid-tier jobs through which young people and ordinary professionals once built experience, confidence and mobility. When the first rung of the ladder disappears and middle careers become insecure, the damage is not only economic. It settles into the national psyche as anxiety, humiliation and a sense that the future is closing.
For decades, jobs in the Middle East acted as Pakistan’s social safety valve. They kept families afloat, absorbed workers the domestic economy could not employ and generated remittances that helped keep the country itself afloat. That outlook is now bleaker after the Iran war and continuing instability in the Gulf. As workers return and new jobs become harder to secure, remittances could fall rapidly, removing one of the few cushions that has protected households – and the state – from the full force of domestic economic failure.
The poverty is especially offensive because Pakistan is not uniformly poor. Islands of wealth exist beside extreme deprivation. Expensive SUVs pass children begging at traffic lights; gated communities with private security, generators, water and manicured landscapes coexist with settlements struggling for sanitation, clean water and secure shelter
The wealthy have purchased private substitutes for the state: private schools, private hospitals, solar power, water tankers, boreholes and guards. They need little from the public state beyond property protection and access to influence. The poor cannot opt out; they remain dependent on the institutions that function worst.
Energy shows how inequality is built into basic services. Only around 23 percent of households have piped natural gas; most rely on LPG, firewood, biomass, coal and other fuels. Yet public debate often treats piped gas as a universal entitlement. It is not.
The inequity is perverse. Households outside the gas network are often poorer than those connected to it, yet pay more for useful energy. LPG can cost several times more than regulated pipeline gas, while poorer rural and peri-urban families may burn wood, crop residues, dung or coal, exposing women and children in particular to damaging indoor air pollution.
This is not merely energy-policy failure; it is distributional failure. Where a household lives can decide whether it cooks with pipeline gas, pays multiples of that price for LPG, or burns dirty fuels because even LPG is unaffordable. The poorest often pay the highest effective price for the worst service.
A serious social contract would treat clean cooking energy as part of human dignity. The objective should be affordable access to clean energy for all households, including the majority that never had a gas connection.
Housing reveals the same divide. Formal urban housing has moved beyond the reach of much of the population, while land and property remain vehicles for speculation and wealth accumulation. The result is informal settlement, overcrowding and slums – after which we blame the poor for living in them.
Pakistan is fast becoming a country of land development rather than real development. Urban expansion is organised around plots, gated colonies and speculative real estate, leaving little room for the poor and too little planned commercial density where innovation, commerce and productive enterprise can thrive. Land becomes a store of wealth, not a platform for opportunity.
The mismatch is financial too. Massive savings are mobilised from rural Pakistan, yet only a fraction returns as credit. If nearly 80 percent of deposits are collected from rural areas but less than 10 percent is lent back to them, the banking system becomes another channel through which resources flow from villages and small towns to urban centres. Rural Pakistan supplies capital; urban Pakistan captures it.
Public space tells the same story. Garbage, sewage, broken pavements, encroachments, dust, polluted waterways and chaotic construction have become so common that many of us barely register them. This is not an aesthetic complaint. The condition of public space reveals the condition of the social contract.
When nobody believes the street, park, drain or pavement belongs to everyone, each person has an incentive to appropriate or neglect it. The wealthy retreat behind walls while the common realm deteriorates.
The crisis of the state is most serious in justice. A functioning society needs more than laws on paper; it needs credible enforcement and efficient dispute resolution. When litigation takes years, justice becomes prohibitively expensive. Delay becomes a weapon. The powerful can afford lawyers, influence and time. The poor cannot.
This contradiction is dangerous: a judicial system too often unable to deliver timely justice exists alongside coercive institutions capable of enormous discretionary power. Counterterrorism bodies perform an essential function in a country scarred by terrorism. But precisely because they possess exceptional powers, accountability, due process and external oversight are indispensable.
A state cannot demand obedience to law while its own institutions appear above meaningful accountability. That corrodes legitimacy.The same deterioration has infected politics and administration. Too much of Pakistan’s governing system revolves around access: access to the right politician, bureaucrat, police officer, businessman, journalist or intermediary.
Dynastic politics has become part of this norm. Public office is too often treated as family inheritance, constituency as private estate and party leadership as bloodline entitlement. When politics itself teaches that access is inherited rather than earned, it deepens the public belief that institutions exist to preserve privilege, not to serve citizens.
The citizen learns a destructive lesson: do not build institutions; cultivate relationships. Politicians seek rents, businesses seek exemptions, officials seek postings, professionals seek patronage, and citizens search for someone who “knows somebody”. Merit becomes subversive because it threatens networks built on discretion. It would be lazy to conclude that Pakistanis are culturally predisposed to corruption. Put the same Pakistanis insid ain confined to spreadsheets, budgets or negotiating roomsbut will spill onto the street.
-Business Recorder