Middle Class
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News Analysis |

Long ago, it was established that Pakistan’s middle class is going through an expansion after the economic upheaval in 2002.

Perhaps a more weightage was given to this fact in the light of the recent statistics released by the State Bank of Pakistan. In these statistics, it was ascertained that Pakistan’s middle class is expanding at a much faster rate, which now makes up 84 million out of the total population.

On the surface, with such a naïve interpretation, the news is more than enough to be a symbol of increased employment, leading to increased demands and spending.

Also, this particular segment of Pakistan’s population is much higher than the total population of Turkey and Germany.

The economic report also mentioned that the rise in the demand and purchase of consumer durables and increased spending particularly on electronic items are indicative of the growing middle class. The trends of increased spending are thus associated with the economic takeoff.

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On the surface, with such a naïve interpretation, the news is more than enough to be a symbol of increased employment, leading to increased demands and spending.

But deep analysis exposes that another perspective is altogether ignored. Though multinationals and mass -market industries are benefitting with this alteration in demographics, the implications ought to be much more grave than anticipated.

A counter-interpretation of the same statistics has not been entertained much, had it been realized before, the country would have been struggling less to cope with the situation.

If applying the same mechanism of demand and supply, with the expanded middle class, there comes with greater intensity the need for more electricity, water, gas, and food. These problems have indeed intensified for the economy to feed the needs of the greater population with the limited resources in hand.

A counter-interpretation of the same statistics has not been entertained much, had it been realized before, the country would have been struggling less to cope with the situation.

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A critical analysis suggests that the increased consumer spending is the reflection of increased consumption per capita.

To an extent, the first two concepts can accredit since the improvement in these is directly linked with the inflow of foreign investments.

Also, the increased number of migrating Pakistanis in search of better prospects abroad also raises questions about the viability of such claims.

The narration of Pakistan’s economic growth is dragged up on the three interlocking concepts; political stability, improved security environment and the growing middle class.

To an extent, the first two concepts can accredit since the improvement in these is directly linked with the inflow of foreign investments. The linking of increased spending with the increased consumer capita income of middle class and above all taking this as the beacon of economic stability is mistaken.

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Myth Vs Reality 

Though the middle-income group accounts for 25% impressive returns for the large multinational companies, and indeed there has been an increase in the consumption of steel, automobiles, and cement.  Taking the size of the population as an indicator for an economic take off is synonymous to undermining the potentiality of the sound economic policies on part of the government.

They are also bearing the maximum burden to feed the economy. The taxes levied by the governments experiencing a shrink in their real incomes, the middle class ends up paying the utility bills for the ones who don’t pay at all.

In fact, if taken in real the account of middle-class population, they are perhaps bearing the burden of that major part of the population that is living below the poverty line. The middle class to upper middle class makes up the major part of taxpayers in the country, which in turn, is used to accommodate the underprivileged class.

They are also bearing the maximum burden to feed the economy. The taxes levied by the governments experiencing a shrink in their real incomes, the middle class ends up paying the utility bills for the ones who don’t pay at all.

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The oppressive economic policies of the government too are squeezing the middle class. The focus should rather be to uplift all the classes in Pakistan to provide a balanced course of economic development.

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