CONFRONTING a polycrisis mostly of its own making, the state’s governing capacity has gravely weakened and is wobbling between distress and failure.

There are increasing signs that degeneration has set in, with the capability to deliver on the social contract between the citizenry and the rulers compromised — even when it comes to the primary function of providing security to life and property. An attempt is made below to identify the manifestations of the polycrisis.

The country is teetering on the brink of financial insolvency, as the economy is hard-pressed to bear the burden of a bloated, predatory and extractive state machinery and its key functionaries’ lavish perks and privileges. The privileged segments, state functionaries and those well-connected with decision-makers have arrogated to themselves increasing shares of the pie.

Representative and supporting institutions lack moral legitimacy and general public ownership. Disenfranchised, people are discontented; they are not able to participate freely, openly and transparently in the political process, and are also hurt by the absence of the rule of law.

There is a deepening sense of vulnerability due to growing terrorism, the nature of the governing class, and the failure of administrative governance. The gap between diminishing state capability and the challenges being faced makes the task formidable.

Civilian institutions, which serve as pillars on which the structure of the state rests, are largely dysfunctional and in a condition of utter disrepair. The institutions are fragile, with a disempowered executive, an inadequately functioning bureaucracy with limited capability, a rubber-stamping parliament, and a judiciary unable to operate a grievance redressal system, especially against the state. All of them also suffer from a lack of internal stability and unity, having depleted their professional independence.

The growing gap between state capability and challenges has made the task formidable.

The reasons are several: political and establishment interference, mismanagement, non-merited appointments to decision-making positions driven by a culture of loyalty and patronage, sheer incompetence as an outcome of inadequate resource allocations for decent quality education and skill development, and ‘entrenched institutionalised corruption’. The challenge is how to remedy this situation by making these institutions ‘normal’ through orderliness, harmony, and consistency.

Then, there are self-serving definitions of national interest. A rational view of engagement with the world is missing. While harbouring a victim syndrome, we also entertain an exaggerated view of our own importance. In the past, this assessment was fed by fortuitous global events, coupled with an institutionally ingrained belief that the establishment was better equipped to address the country’s multifarious challenges, while holding a poor opinion of the capability of civilian institutions to deliver on such a mission.

It is difficult for the vast majority of the labour force, with limited education and skills, to participate meaningfully in the modern economy, which is also constrained by suffocating regulations.

The education and skill development systems have failed to enable this participation. Even university education is not producing knowledge and skill — nor the ability to acquire it — to meet the market demands of an economy growing at barely 2.5-3 per cent. The latest Labour Force Survey reveals that 31pc of graduates are unemployed and 34pc of 15-to-29-year olds have simply dropped out of the labour force.

Social indicators have not been allocated adequate funds for investments and operational spending. While spending on education and health was 1.7pc of GDP in the 1980s, 3pc of GDP in the 1990s, and 2.3pc of GDP in the 2000s, the comparatives for defence have been 6.5pc of GDP, 5.6pc of GDP and 3.6pc of GDP respectively, enabling establishment-related institutions to strengthen their capabilities significantly. To their credit, they deployed these resources to create and embed a culture of discipline and internal cohesion and a meritocratic system for career progression. They also brooked no civilian interference in their institutional affairs, jealously guarding their independence.

The economy is not growing at a pace to absorb the high population growth rate. But thanks to the internet and cable television, the youth is exposed to global developments, magnifying the challenges of managing expectations.

The state’s huge footprint on the economy distorts markets, blocks opportunities and raises the cost of doing business through excessive, obsolete and flawed regulations — with little clarity about why activity needs regulation. All this is presided over by a generalist, cadre-dominated civil service with a 19th-century mindset.

A highly protected industrial structure is producing low productivity and low value-added goods. The growth of one such industry has created markets for others (each flourishing with varying degrees of inefficiencies). The economy’s competitiveness is being eroded by a power sector beleaguered by poorly negotiated contracts, incompetence and misgovernance.

While there is deep-seated mistrust between Islamabad and the smaller provinces, widening regional disparities in growth rates, quality of physical infrastructure and social and economic services have contributed to ethnic and intercommunal strains and stresses. Even the much-referred to monolithic category of the youth as an emerging vocal stakeholder is alienated along national/ ethnic/ values lines, with little by way of a sense of shared identity, shared values and moral compasses between, say, the youth of Punjab and those of Balochistan and KP.

Society is fractured and polarised, both horizontally and vertically. Social divides are deepening, the space for talks is narrowing and hampering possibilities of coexistence, which is critical to social cohesion.

The result of all this is an unfair socioeconomic structure.

Social cohesion built around a set of values requires a holistic approach to our sociopolitical and economic affairs. It needs reconfiguration of state and society. This is a huge challenge. Tackling it would be overwhelming for the most capable leadership anywhere in the world. And what are we blessed with? Subsequent articles on the key issues will attempt to propose the structures, policy actions, instruments, and institutional arrangements on the way forward.

The writer is a former governor of the State Bank of Pakistan.

Published in Dawn, August 10th, 2024