A new contract: how Pakistan can end politics of poverty

Business Recorder

21 hours ago

'There is always more misery among the lower classes than there is humanity in the upper.' Victor Hugo, Les Misérables.
Let's be honest: we don't need another diagnostic. We already know the patient is bleeding. What Pakistan needs now is a surgical plan—practical, bold, and morally sound.
For too long, we've accepted poverty as collateral damage in the pursuit of elite consensus and IMF appeasement. But poverty is not an economic inevitability. It's a political choice; we have the tools. The question is: do we dare use them?
It begins at the source: revenue. Not just collecting more—but collecting fairly and intelligently. Three big fissures need closing. First, agricultural income: time to stop pretending. We must tax progressively above subsistence thresholds, synchronized across provinces.
Digitize land records, use satellite imagery to estimate yields, and enforce returns based on real output. Second, the retail-wholesale sector — our country's backbone — remains untaxed. Use utility, mobile, and point-of-sale data for automatic registration, offer simplified compliance pathways, and blacklist evaders.
Third, exemptions: eliminate the alphabet soup of favours. Every tax break must have a limited time-frame or a sunset clause. Any system people don't understand breeds mistrust. The tax code should not be a maze for the honest and a playground for the connected.
But it's not just about how much we collect—it's about how we spend. We must flip the budget. Instead of rewarding glossy overpasses, we reward outcomes. Tie provincial transfers to performance on health, literacy, nutrition. Double down on girl-focused primary education—stipends, not just schoolbags. Fund preventive healthcare—immunisation, clean water, maternal support. And if we must borrow, let it be for people, not concrete. That debt pays dividends for decades.
The deeper issue is how we define development. We remain stuck in an outdated metric. GDP was never designed to measure human welfare. Nobel laureates like Joseph Stiglitz and Amartya Sen have long argued that a country's economic output is not the same as its people's well-being.
Pakistan needs to budget with a dashboard: track HDI by district, inequality via the Gini index, and deprivation through the Multidimensional Poverty Index. Real reform starts when budgets ask, 'How many children ate today?' instead of 'How many bridges did we build?'
There's no way forward without confronting what we're doing to our youth. We call it a 'youth bulge,' but without investment, it's more like a ticking bomb. What we need is a national skills guarantee—every Pakistani under 30 should have access to one of three paths: vocational training, digital certification, or an apprenticeship.
No excuses. Every district should have youth entrepreneurship hubs—public-private incubators to build solutions in climate tech, fintech, creative services. We should have a Youth Civic Corps that mobilises thousands for literacy drives, urban greening, disaster response. This isn't idealism—it's strategic insurance. If we don't create opportunity, we'll be dealing with unrest.
Meanwhile, we must build on what works. The Benazir Income Support Programme remains the country's most robust safety net. But it's frozen in its original form. We need to evolve it. Link payments to real outcomes: school attendance, vaccination, skills completion.
Digitally integrate it with NADRA, Sehat Sahulat, Ehsaas, and microcredit channels to build a universal social registry. Add tiers: long-term unconditional support for widows, persons with disabilities, and the elderly. Conditional, time-bound transfers for those who can and want to move up. The goal is not permanent welfare—it's dignity with an off-ramp.
But even as we talk reform, let's address the elephant in the drawing room—protocol. We're trying to build a welfare state while financing a spectacle of privilege. Convoys, VIP perks, public security as personal entitlement. Every rupee spent on ceremonial power is one less rupee for public good. Strip it back. Limit police convoys to verified high-risk individuals.
Publish the protocol budget of every ministry. Cap perks. All the big-wigs in the state apparatus can fly economy—if they want comfort, they can top up from their own pockets. This isn't about symbolism. It's about credibility.
Yet all this will still fall flat without trust. No reform survives without it. The state must show it sees its citizens. Start small but start strong. If you paid for a government service like passport or ID card, and it doesn't arrive within time, it's free. If the passport office has no power, escalate, the portal allows you to complain to next HQ. Create real-time redressal.
Provide free legal aid to women, bonded labourers, minorities. A welfare state does not begin with charity—it begins with predictability. With justice.
Everything we're proposing here isn't just economic. It's deeply moral. Thomas Piketty, in his work on capital and inequality, showed how unregulated wealth accumulation creates systemic instability. The longer you let inequality fester, the more corrosive it becomes—to social cohesion, to democracy, to the very idea of merit. It's not about punishing the rich—it's about protecting the country, the republic.
Richard Wilkinson and Kate Pickett's landmark work 'The Spirit Level' makes a shocking case: unequal societies are not just unfair—they are dysfunctional. They do worse across everything that matters: crime, education, trust, health, productivity.
Pakistan must understand that inequality is not just a side effect. It is the engine of dysfunction. When one class is hoarding plots in gated suburbs while another queues up for food rations, it's not just a fiscal problem—it's a fracture in the national soul. We can either have elite consensus or we can have inclusive development. But we can't have both.
What we need is a new contract. A contract that says: if you work hard, you can feed your family. If you pay your taxes, your kids go to school. If you obey the law, the law protects you. That's not utopia. That's Republic 101.
The elite will not sign that contract willingly. But history shows that when the middle class and the marginalised demand it together — it becomes inevitable.
Pakistan does not lack resources. It lacks resolve. It does not lack intelligence. It lacks intent. Let this be the decade we chose differently. Let this be the decade we turned the page. Let this be the decade we ended the politics of poverty—and began the practice of justice.
Copyright Business Recorder, 2025