We live in an era of immense technological and fiscal challenges, where the convergence of artificial intelligence (AI) and governance is poised to redefine traditional bureaucratic structures.
At the same time, global debt has reached an unprecedented $315 trillion, placing developing nations like Pakistan in a precarious position due to alarmingly high debt-to-GDP ratios. This economic reality has forced governments worldwide to confront dwindling public finances and rethink how best to allocate resources while maintaining effective public services.
The fiscal pressures that were intensified in the aftermath of the COVID-19 pandemic have not fully subsided. Massive stimulus packages helped avert deeper economic collapses, but they have also introduced persistent inflationary pressures in many economies.
In Pakistan, these pressures translated into a 38 percent inflation rate in 2022, coupled with a policy rate of 22 percent in 2023 that severely restricted private-sector investment. By 2024, gradual policy adjustments and improved fiscal discipline allowed the policy rate to come down to 13 percent, offering limited respite, yet the broader challenges remained.
Against this backdrop, political discourse, particularly in developed nations, has increasingly centered on reducing public expenditure.
In the United States, President Donald Trump recently proposed establishing a Department of Government Efficiency (DOGE), led by Elon Musk, aimed at eliminating wasteful spending and cutting USD 2 trillion through extensive downsizing of federal jobs.
Although the rationale behind such measures is to ease the strain on public finances, these initiatives often place bureaucracies under intense scrutiny and risk collateral damage if not implemented carefully.
Pakistan is well acquainted with similar pressures. The federal government’s decision to abolish 150,000 vacant posts and consolidate ministries underscores a desire to rein in administrative costs.
Yet, as history has shown, downsizing without addressing the structural inefficiencies that plague service delivery can create a piecemeal solution. Simply laying off staff or merging departments in the name of austerity may deliver short-term savings, but it risks fostering long-term inefficiencies if not accompanied by genuine reforms and technology-driven restructuring.
It is here that artificial intelligence and large language models (LLMs) present a compelling opportunity. Thanks to their capacity for rapid data processing and automated handling of repetitive tasks, AI systems like ElizaOS can drastically streamline administrative layers.
Many current bureaucratic functions — encompassing legions of stenographers, clerks, section officers, and additional secretaries — could be replaced by AI-driven processes that free up human workers to focus on high-impact roles.
In Pakistan’s context, this would mean fewer bureaucratic tiers in federal ministries, concentrating instead on strategic domains such as defense, foreign affairs, and finance, while devolving responsibilities for health, education, and other citizen-oriented services to provincial and local levels.
The urgency of such reform becomes evident when examining Pakistan’s current public spending priorities. According to the Public Sector Development Programme (PSDP) for 2023-24, more than half (52 percent) of the funds are channeled into infrastructure, while education and health receive only 8.6 percent and 2.5 percent, respectively.
Governance itself accounts for a mere 1.2 percent, indicating that the financial benefit from simply slashing bureaucratic positions may be modest unless those reforms are complemented by better resource allocation. Indeed, the focus should be on investing in field-level operations — doctors, teachers, engineers, and revenue officials — who directly engage with the public, rather than perpetuating top-heavy administrative structures.
Yet, while AI offers a robust solution to inefficiency, one cannot ignore the potential pitfalls of over-automation. Governance, at its core, involves empathy, strategic thinking, and nuanced decision-making.
Automating routine clerical and analytic tasks is undoubtedly beneficial, but it should not erode the critical human presence in policing, healthcare, revenue collection, and public administration. Ideally, AI would serve as a force multiplier: freeing field officers from mounds of paperwork and enabling them to concentrate on specialized services, innovative policy initiatives, and community engagement.
The resultant savings could be significant. By cutting through redundant layers, governments would reduce costs and lessen the time currently spent on operational micromanagement.
However, a part of the funds salvaged through such reform must then be channeled into the professional development of civil servants—both those who remain in the system and new entrants—to ensure that the public sector workforce remains equipped for an AI-centric future. In tandem with investing in training and upskilling, an equally pressing need is to review and enhance the salaries of remaining officials.
Aligning compensation packages with private-sector standards can help retain top talent and boost motivation, ensuring that a leaner bureaucracy is also a highly productive one.
As AI technology matures, so too will the pressures and opportunities it brings.
Balancing technological efficiency with the human core of governance will define the future of public administration. For Pakistan, the time to initiate that transformation is now, not by simply reducing headcounts but by embracing AI to reimagine and reinvigorate the public sector.
The objective is not just to save money; it is to create a more responsive, dynamic, and future-ready bureaucracy—one that can meet pressing economic challenges and still retain the empathy and strategic thinking that lie at the heart of good governance. In this sense, it is crucial to use a scalpel rather than a hatchet in streamlining the bureaucracy, ensuring that reforms eliminate genuine redundancies while preserving the vital human expertise where it matters most.
Copyright Business Recorder, 2025