The Deadly Cycle of Stagnation: How Political Instability Systematically Disables the Lower and Middle Classes in Pakistan:

Pakistan, a country teeming with talented people, is mired in a "vicious cycle of political instability" that results in disastrous economic meltdowns.   The "lower and middle-class families" are the ones most affected by this chronic political unrest, systemic disease, which saturates the whole economy and includes regime changes, institutional disputes, and a debilitating lack of policy continuity.   For most families, consistency is a precondition for financial survival rather than a luxury.  And in its absence, living costs soar upwards, life quality nose-dives, and—above all—their children face a blighted future.

I. Political Volatility's Deep Roots and Past Policy Failures:

The current predicament is the accumulation of decades of shaky institutions and democracy. Since its inception, Pakistan's political environment has created a rapid alternation between civilian and military regimes, creating a pattern of government upheaval. A modern economy does need stable, predictable governance, which was hard to establish given the history of "constitutional conflicts" and the high rates of change in prime ministers.

A. Populism, Protectionism, and Inconsistency: the Trilogy of Policy Failure:

Because of the history of instability, it has not been possible for Pakistan to maintain a cohesive economic agenda for well over a decade. These mistakes are divided into three main categories of systemic policy errors that still inflict its economy with negativity:

1. The Failure of the Populist Policy Cycles (The 1970s and Later):

Fast but often unfair growth under military rule - such as during the Ayub Khan period, when growth averaged around 7% in the 1960s - was typically succeeded by populist policies and politically motivated economic nationalization following transitions to democracy.   In a scheme for political consolidation and income redistribution, the government nationalized banks, schools, and other key enterprises in the 1970s.   It eventually undermined the efficiency of key productive sectors and promoted bureaucracy, thereby slowing industrial growth and leading to the creation of large, financially troubled SOEs, which continued to drain the national budget.   Averse to political backlash, successive governments have largely avoided selling these enterprises, condemning the state to absorbing huge annual SOE losses and crowding out funds from social and development spending.

2. The Inability to Implement Tax and Fiscal Reform (The Enduring Crisis):

For many years, Pakistan has kept a notably very low tax-to-GDP ratio, normally in the range of 10%.   Governing authorities anxious to retain the confidence of powerful political factions of large businessmen, industrialists, and feudal lords do not take the necessary steps to broaden the tax base, which is a direct consequence of political weakness.   The lion's share of the cost must then fall on the existing taxpayers, who bear it through indirect taxes like sales tax and gas levies.

* The Inequity of Indirect Taxation:   Indirect taxes hurt the poor and middle class more than the rich, since they spend a larger part of their incomes on buying things.   Every time the government needs money, it increases the price of petrol and electricity because instability creates a fiscal hole.  The easiest way for the rich to get what they want is by taxing the poor.

* The Power of the Untaxed Elite: The inability to tax large amounts of agricultural and retail income allows powerful political players to avoid paying taxes, solidifying a structural deficit that guarantees continuous budget deficits and reliance on foreign debt.

* The Inconsistency Trap in Policy (Investment Deterrence): The frequent and abrupt resignations of prime ministers in Pakistan, and the consequent shifting of cabinet members, have made its policy environment unsuitable for long-term investments. Major economic initiatives like foreign trade agreements, privatization plans, and even regulations for large energy projects are frequently stalled, changed, or reversed with every change of government. Due to the lack of sovereign consistency that has kept serious FDI away, Pakistan's FDI as a proportion of GDP has remained consistently low compared to its neighbors. The economy was thus unable to find the funding needed for formal job creation and industrial expansion.

B. The Economic Reaction to Instability: A Chain Reaction:

This long history of inconsistent policy has directly contributed to the grave crises of the present day:

* IMF Dependency and Unsustainable Debt: Pakistan has had to participate in 24 IMF programs or more due to borrowing funds to compensate for budget deficits instead of levying taxes. Through hyperinflation and increased utility prices, the poor and middle classes bear the brunt of elite political failure, and every program begets austerity.

* Currency Collapse: The result of weakened international confidence brought about by the political uncertainty and the massive structural trade deficit-which is another historical failure to build high-value exports, is the rapid decline in the value of the Rupee. This is indeed the source of imported inflation, which does not allow the buying of energy and essentials.

II. The Serious Burden on Lower and Middle Class Families:

Without financial safety nets, the families have to confront real-life problems arising from macroeconomic and political uncertainty.

A. Hyperinflation: The Poor's Silent Tax:

The most disagreeable outcome is that the middle class is becoming poorer on purpose because of the growing cost of living.

* Food Security Crisis: Increasing food prices, especially of staples like rice, wheat, and pulses, push poor households into caloric poverty.   Unable to afford nutritious and diverse meals, growing numbers of children are stunted and malnourished.  Political avarice in the short term is the root of this long-term calamity.

* Savings End: The perpetually high inflation, often reaching double digits, actually eliminates the liquid savings of the middle class. In fact, retirement accounts, fixed deposits, and small nest eggs have all disappeared, destroying financial stability that was earned through decades of hard work. Unfortunately, their financial stability is crumbling, and many families are forced to take high-interest informal loans only from nearby lenders or shops-simply to pay their monthly utility and grocery bills.

* Energy-related shocks and increasing utility prices:  Rising gas and electricity prices force families to make large changes in spending. Due to their fiscal losses to repay debts accumulated by SOEs, price increases for these utilities force families to make large changes in their spending. This is also because a family cannot choose between food and school, and light when utilities cost as much as, or more than, their groceries.

B. The Damaged Generation of Young People and Unemployment:

This constitutes a strong social burden, as Pakistan's demographic dividend involves young people and teens who are the most impacted by an economic downturn caused by instability.

* Unemployment and Lack of Formal Employment:   Political unrest reduces growth in high-value service and manufacturing industries.  These are the only companies that can absorb millions of newly educated people.   Because youth unemployment is very high - up to three times the national average - this generation is optimistic, as a result of their education, yet depressed because they are without work.

* Young People Are Made to Work Too Soon:  It is often economically imperative that a low-income family have a child work when they are experiencing hyperinflation. Middle and high school students are taken out to work in the dangerous and unregulated "informal economy" of small businesses, workshops, and transportation. This would mean giving up, for the sake of the family, their potential for income in the future. This guarantees that the next generation will remain poor.

* Brain Drain of Educated People: The economic hardship and political unrest have facilitated the departure of very capable, educated young Pakistanis. Several professions are migrating, which include engineers, doctors, IT professionals, and others. This brain drain is the last straw that shows a lack of hope for the future of the nation. It takes away those people who are needed to help Pakistan get stabilized, develop, and build its way out of this crisis.

III. The Strategy for Economic Justice and Stability:

What is needed to break the self-destruction cycle is a shift in emphasis from political gamesmanship to fundamental structural and institutional reform that champions economic justice for the masses, accountability, and continuity. This requires an institutional commitment to a nonpartisan economic charter.

Building Institutional Protections and Political Consensus:

1. An Economic and Political Consensus Charter:

 *The Need:  Fundamental economic policy must be depoliticized as the primary objective.   The "Charter of Economy," which is based on the successful "Charter of Democracy" from 2006 but is more economic in nature, must be signed by the major political parties and significant institutional stakeholders.   A 15-year, unchangeable framework for structural improvements would be agreed upon by all members.  This would include a coherent energy policy, tax targets, and timetables for the privatization of state-owned businesses.

 The Central Bank's autonomy, expansion of the tax base, and international financial commitments, as in the case of IMF conditionalities, must be constitutionally enshrined against reversals with a mere change of government or majority in the legislature.

To make monetary policy (interest rates, exchange rates) based on economic stability and not on political expediency, the State Bank of Pakistan (SBP) has to be fully autonomous.

* Electoral and Judicial Reform: Fair elections and a just judiciary are what link stable politics. If we want people to believe in democracy again, we have to make far-reaching reforms in the method of conducting elections. The court should define and stick to its constitutional role. It should avoid disputes about economic or political policy that sharpen confrontations among institutions.

B. Changes in government and economy that pertain to the middle class:

1. Taxing the Elite:

 Revolutionizing Tax Administration:

   * Broadening the Base: Adopt a progressive but compulsory process of bringing untaxed sectors into the tax net, especially large retail and wholesale dealers and large landowners.   One of the key goals of the nonpartisan economic charter needs to be this.

* Digitalization and Accountability: Formalize the economy, track transactions, and reduce avenues for tax collections—where harassment and corruption start—through the use of digital technology and e-governance. The focus should be more on expanding the base and collecting income tax from the richest rather than charging those who are already paying.

 2. State Efficiency Enhancement and Reduction in Populist Expenditure:

 * Privatization of Public Sector Enterprises:  Draw up a clear, time-bound program for the privatization or restructuring of all large loss-incurring public sector enterprises, including railways, airlines, and power distribution companies. These losses need to be clearly diverted into social development funds every year, as they are now higher than the entire government health budget.

  Civil service reform:   The federal and provincial bureaucracy needs reorganization and downsizing to enhance efficiency and cut expenditure that is non-developmental in nature. 

C. Youth-oriented aid and financial support: 

Skills-First Education Reform:

* Market-Driven TVET: More government funding is needed for high-quality, market-responsive Technical and Vocational Education and Training (TVET), which should be developed in close partnership with private sector industry associations.   This should be focused on digital literacy, IT services, and export-oriented skills. Establish legal and financial frameworks to assist companies in funding and incentivizing them to provide formal, compensated apprenticeship and internship programs for recent high school and college graduates.  This will facilitate the shift from education to employment.

 • Empowerment of Local Government:

 Establishing the Youth Sector:  Article 140A of the Constitution provides for strengthening the local governments at the district as well as the tehsil level. By giving more power to the local governments, they can spot more local business opportunities, reduce regional imbalances, and promote the creation of small enterprises and jobs at the local level that can help absorb the large number of unemployed youth. Indeed, this long-term commitment is the only viable way to break the intergenerational poverty trap. 

 VI. Conclusion:

 Crisis of Will: The political instability in Pakistan is not a short-term issue but rather a structural ailment that is actively destroying the nation's economic prospects and pushing its middle and lower classes into a state of continuous poverty. A trend of policy discontinuity and populist short-termism directly explains the debt crisis, youth unemployment, and hyperinflation seen today, according to a historical study. It is no longer a question of which party is in power but how the government works.  The educated teen searching for his first job and the family struggling to pay for a bag of grain both show this. Only a long-term Charter of Economy with its underpinning of institutional stability, fiscal honesty, and long-term investment in the youth can restore the promise of economic upward mobility for all Pakistani citizens and heal the deep wounds caused by policy failure.  It is not a question of whether a strategy for stability exists, but rather, if the political will to implement it can ultimately prevail.