MY previous article on the rise of Pakistan’s middle class (which appeared in this newspaper on March 23), elicited a surprising response. It was the most ‘face-booked’ and ‘tweeted’ of all my op-eds since last year, and I received numerous comments via text message and e-mail as well.

Overwhelmingly, the response was euphoric and celebratory in nature, with many friends, especially from Karachi, suggesting that I had finally “seen the light”, and hoping that this would mark the start of more “positive” thinking and writing from me! Indeed, the purpose of the article was to balance the narrative, and tell a story which also needed to be told: that the only way to explain the consumption and affluence visible in some parts of Pakistan was by the rise of a sizeable middle class. However, the attempt to balance the narrative may have an unintended consequence. It could reinforce the complacency that has been exhibited — and articulated — by senior government figures and policymakers, regarding the ‘true’ state of the economy and the socioeconomic circumstances of most Pakistanis.

This complacency is set to increase further if reports regarding the results of the latest official poverty assessment, as yet unreleased, are true — that Pakistan is likely to record another sharp fall in the poverty headcount ratio, from the controversial figure of 17.2 per cent that was estimated in 2008.

In the wake of some recent disturbing developments and findings, it is important to re-balance the narrative. While it is important to recognise the emergence of a large middle class in Pakistan, it is imperative not to forget that an unacceptably large number of our countrymen are falling through the cracks.

The first of these ‘counter narratives’ pertains to rising food insecurity and overall vulnerability in the country. While estimates of the size of the middle class are open to methodological questioning, on the other side of the equation, the estimates of the food-insecure and vulnerable population are perhaps relatively more ‘firm’. An UN inter-agency assessment mission, for example, had placed the food-insecure population in Pakistan at 77 million people — in 2008, at the start of the global food crisis. It is almost certainly likely to be the case that this cohort has grown in number since, given that food inflation has totalled 75 per cent between 2008 and 2011.

The second of these comes from the findings of the official National Nutrition Survey, 2011 (NNS, for short). While the results of the survey have not been officially released, a reader associated with this exercise has shared some of the grim findings. The two most important ones include:

— An across-the-board increase in malnutrition in children, with 67 per cent of this cohort falling in this category, across the whole of Pakistan (mothers have fared poorly as well);

— An across-the board increase in ‘stunting rates’ in children in Pakistan, with Sindh faring particularly poorly on this score.

According to this researcher, given that there are no discernible patterns in the findings and the results are fairly evenly distributed across different regions and sub-groups (male/female, rural/urban, by province), the most plausible explanation for the results is that “the underlying cause is poverty, which according to this survey would be very pervasive and extant”.

The third disturbing development relates to the re-emergence of polio in the country, with Pakistan amongst three countries in the world where this deadly debilitating disease has made a comeback. While this is perhaps more related to conflict than directly to poverty, it does underscore an increase in vulnerability for large sub-groups in Pakistan, not a decrease.

Finally, and perhaps the most depressing: the recent suicide by not one, but two school-going teenagers, in quick succession and in separate events, but with ostensibly one common factor — the root of their desperation was largely economic in nature, going by media accounts.

These four developments should be enough to focus our minds on how successive policymakers and policies are failing Pakistan, even as a sizeable middle class takes root. The conundrum of the emergence of Pakistan’s middle class even as the economy has weakened in terms of a long-run, secular trend is perhaps explained quite significantly by the atrophying of the state and its institutions — the ability to collect taxes, duties and other dues (such as utility bills), and in more broad terms, by enforcing obligations — and not by the success of any deliberate economic policy per se.

In addition to the foregoing, given the context of the speech from which my article on the middle class was adapted, the downside of the consumption boom was not touched upon. The sharp and sustained pressure on the balance of payments is partly explained by a steep rise in imports of ‘non-essential’ products to sustain the lifestyle wants of the affluent in Pakistan.

The other, more disturbing element is that despite the boom in consumption, it remains largely outside the tax net, and hence, is not contributing to Pakistan’s economic stability and well-being to the extent it can and should.

Here, it would be instructive to ponder over the estimate provided by the Asian Development Bank for the total consumption spending by the middle class in Pakistan as of 2005: $75bn a year. Given that a fairly large chunk of this would be at ‘superstores’, designer boutiques, trendy restaurants and retail outlets in swank malls, well above the turnover threshold of mom-and-pop corner shops, it would be right to assume that this consumption spending should attract sales tax — but it does not. Hence, hundreds of billions of rupees are escaping from the tax net from the large, organised retail sector each year.

In sum, while we have every reason to celebrate the rise of Pakistan’s middle class, we should also be clear of its origins, and the persisting distributional issues it highlights.

The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.