In recent years, Pakistan has been steadily adopting neoliberal economic policies that promote privatization and reduce the state’s responsibility in delivering basic services. This shift has turned essential public goods like education and healthcare into private commodities, accessible only to those who can afford them. It raises an important question: is the government slowly walking away from its duty to serve all citizens equally?
To understand this trend, it’s crucial to define what public and private goods mean in economic terms. Public goods are non-excludable and non-rivalrous in nature. Everyone can access them, and one person’s use doesn’t stop another from using them too. In contrast, private goods are excludable and rivalrous. They are only available to those who pay, and their supply is limited.
Education and health have traditionally been treated as public goods in most welfare states, but in Pakistan, they’re gradually being handed over to the private sector. This contradiction is clearly visible in the government’s policies. On one hand, officials repeatedly emphasize the importance of education and health. On the other, their budget priorities tell a different story.
In the budget for the financial year 2025-26, the combined health budget including both development and non-development spending was cut by Rs8.77 billion, falling from Rs54.87 billion to Rs46.10 billion. This reduction comes at a time when 40 percent of children in Pakistan suffer from stunting, a clear sign of long-term undernutrition and lack of access to healthcare.
Furthermore, the education sector is in no better shape. According to the Economic Survey of Pakistan 2024-25, 38 percent of children are out of school. Public expenditure on education has steadily declined over the years. It was 2.0 percent of GDP in 2018-19, 1.9 percent in 2019-20, 1.4 percent in 2020-21, 1.7 percent in 2021-22, 1.5 percent in 2022-23, and finally just 0.8 percent in 2024-25. This shows a continued drop in investment in human capital, which not only limits future economic growth but also increases inequality of opportunity. Similarly, health spending fell from 1.0 percent of GDP in 2022-23 to 0.9 percent in 2023-24, and a large share of this goes toward non-development expenditures, mainly administrative costs rather than actual service delivery.
Now there exists a welfare paradox. The government continues to promote its Benazir Income Support Programme (BISP), which has been allocated Rs716 billion in the same budget. While BISP is meant to offer social protection to the poorest, it cannot replace the critical role of accessible public services. Relying solely on cash transfers while systematically underfunding schools and hospitals leaves the majority vulnerable and dehumanized, reducing welfare to short-term survival rather than long-term empowerment.
This trend reveals a deeper ideological shift from welfare maximization to profit maximization. Policymakers increasingly treat public goods as economic burdens rather than recognizing their crucial role in fostering social inclusion, building citizenship, and reducing structural poverty. Instead of fixing inefficiencies in public institutions, the solution offered is often simple: privatize it.
But privatization is neither a neutral nor purely technical solution. It is a political decision. When the government transfers public services to private entities, it effectively makes them excludable and conditional. This shift deprives millions of low-income citizens, who are already marginalized, of the essential tools they need to lead a dignified life.
Pakistan’s poverty statistics make this even more worrying. Almost half of the population lives below the internationally comparable poverty line, and 16.5 percent live in absolute poverty. Reducing state responsibility in such conditions does not improve efficiency. It increases inequality, creates social unrest, and weakens the state’s connection to its people. Therefore, the government must take steps that ensure social inclusivity and are aligned with Pakistan’s environmental and economic realities, rather than relying on externally adopted models.
