Opinion | The Bills Keep Coming: Inside Pakistan’s Governance Fatigue

Islamabad has spent much of 2026 talking about “stabilization.” The word shows up in almost every finance ministry statement and every IMF report this year. On paper, there is some truth to it. Inflation has dropped from the terrible levels of 2023, when prices rose by more than a third in a single year. But stabilization is a strange word to use in a country where weekly inflation was still above 15 percent in early May, where an electricity bill can double in a season, and where a university graduate has close to a one in three chance of not finding any job at all. The big economic numbers may be improving. Daily life has not caught up. For many Pakistanis, it may never catch up.

Start with taxes, because most other problems grow out of this one. Pakistan’s tax revenue has stayed below 10 percent of GDP for years. This is one of the lowest rates among major developing economies, and it is not a small technical detail. It is the main reason the country has needed more than twenty IMF bailout deals since 1958. That number is extraordinary. It does not point to bad luck. It points to leaders who kept choosing to borrow instead of fixing the system. The tax base is still narrow. It falls heavily on salaried workers and on consumption taxes that hit everyone, rich or poor. Meanwhile, large parts of retail, agriculture, and real estate still operate mostly outside the tax net. Even now, under an active IMF program, the government has struggled to hold firm. A recent review found that Islamabad broke a promise not to give special tax breaks, after quietly extending a tax exemption for sugar imports. It was a small case. But it says a lot about how political convenience keeps winning over the discipline the country claims to want.

Electricity is where this failure becomes something people can actually see, printed on a monthly bill. The core problem has a name: circular debt. It has been building since 2006, through a chain reaction that repeats itself almost automatically. Government subsidies go unpaid. Distribution companies fall behind on what they owe power producers. Power producers fall behind on fuel payments. The unpaid gap then gets passed forward as higher bills for ordinary households, who had no role in creating the problem in the first place. This debt has been reduced from a peak of more than five trillion rupees to about 1.6 trillion last year. Officials point to this as a real success, and in narrow terms, it is one. But most of that reduction has come from raising tariffs, not from fixing the deeper issues: power lost in transmission, electricity theft, and inefficient contracts with power producers. This means the cost of two decades of poor management is still being paid. It is simply being paid by different people than the ones who caused it. Energy costs have climbed by close to 30 percent a year in recent readings. For small business owners in particular, a fixed monthly bill that keeps rising no matter how much they actually produce has become one of the clearest signs that the system is broken.

Food prices carry their own kind of cruelty, because they hurt hardest exactly where people can least afford it. Transport costs, which drag food prices up with them since almost everything travels by road, jumped to 12.5 percent year-on-year in March, up from nearly zero the month before. A jump that sudden points to currency and policy pressure, not a normal seasonal shift. Pakistan imports most of its fuel, so a weaker rupee and unstable global oil prices turn into higher grocery bills within weeks, not months. During the 2023 inflation peak, food prices rose by almost half in a single year. The sharpest spike has eased since then, but the underlying risk has not gone away. A currency that weakens every time the current account comes under pressure will keep doing this to food prices, for as long as Pakistan imports far more than it exports.

Jobs are where the country’s biggest advantage turns into its biggest warning sign. About two-thirds of Pakistan’s population is under thirty. In most countries, that kind of age structure would be called a gift, a young workforce ready to drive growth. Instead, general unemployment sits near seven percent and is still rising, while unemployment among university graduates has reportedly passed 30 percent. That gap says less about a shortage of jobs overall, and more about how badly the education and training system has been matched to what the economy actually needs. Only a small share of young people get any formal vocational training, well below the regional average. The mismatch is stark: the country produces more graduates in fields like political science than the market can use, while employers say they cannot find enough trained technicians. Unemployment among women runs several points higher than among men nationally, and even higher in cities, a gap that points to structural barriers rather than a simple lack of jobs.

Public services complete this picture, and not in a good way. Education spending remains under one percent of GDP. Literacy sits around 63 percent. Infant mortality continues to run above the regional average, according to the government’s own economic survey. None of these problems are new, and no single government created them alone. But that is exactly the point. A country that has gone through more than twenty IMF programs, dozens of finance ministers, and repeated promises of reform still has not moved the needle on the basics that decide whether its youngest citizens grow up literate, healthy, and employable.

None of this happens in a vacuum, and it would be unfair to pretend otherwise. Global oil price swings, regional conflict risk, and climate disasters like the 2022 floods, which submerged a third of the country, have all made homegrown problems worse. The IMF’s own reviews do note real improvements in fiscal discipline and monetary policy over the past two years. But outside shocks explain the timing of Pakistan’s crises far better than they explain why these crises keep coming back. A country does not need twenty bailouts because of bad weather. It needs them because taxation, energy pricing, and public investment have been treated for decades as problems to manage around, rather than problems to actually fix. And the people paying the accumulated cost of that choice are, as always, the ones with the least say in making it.

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