Pakistan is once again grappling with a severe energy crisis, a challenge that has become both structural and urgent.

Frequent power outages, rolling blackouts, and an overstressed national grid are disrupting daily life, industrial production, and essential services. Despite repeated government interventions, the country continues to struggle with persistent circular debt, high reliance on imported fuels, and inefficiencies in transmission and distribution systems.

These long-standing weaknesses have made the electricity supply vulnerable, particularly during peak demand seasons, leaving households and businesses facing uncertainty and frustration.

In response to this escalating crisis, policymakers are exploring the concept of a “smart lockdown” — a targeted approach designed to curb electricity consumption without shutting down the entire economy. Unlike the comprehensive lockdowns imposed during the Covid-19 pandemic, this strategy aims to limit operational hours of businesses, adjust industrial schedules, and scale down energy-intensive activities selectively. While the proposal is intended to prevent the collapse of the power system, it raises pressing questions about its economic, social, and educational consequences, making it crucial to weigh potential benefits against far-reaching risks.

There is no denying that Pakistan’s energy sector is under immense strain. Persistent circular debt, transmission inefficiencies, and reliance on costly imported fuels have created a fragile system that struggles to meet demand, especially during peak seasons. In such a scenario, demand management appears to be a logical, even necessary, step.
However, economic realities paint a more troubling picture.

The harshest impact of a smart lockdown will fall on millions of daily wage earners across Pakistan.

These individuals rely on daily income to feed their families, pay for basic necessities, and survive from one day to the next. A large proportion of the workforce — over 80 percent — is engaged in informal employment, lacking formal job protection, contracts, or social safety nets, which makes them extremely vulnerable to disruptions in work. Any reduction in business hours, temporary closures of markets, or slowdown in small enterprises would directly translate into lost earnings, forcing households deeper into poverty and hunger. For a country where tens of millions depend on daily wages, a smart lockdown risks creating a humanitarian crisis alongside the energy crisis, making it not just an economic issue but a social emergency as well.

Equally concerning is the potential impact on Pakistan’s already fragile economy. According to the Labour Force Survey 2024–25, the national unemployment rate has risen to approximately 7.1 percent, up from 6.3 percent in 2020‑21, signalling growing stress on the job market and limited new employment opportunities.

Meanwhile, informal employment dominates the labour market and limits access to job security and benefits, compounding economic vulnerability.

Although average nominal wages have increased over recent years — from around Rs 24,000 to more than Rs 39,000 per month — persistent high inflation has eroded real purchasing power, leaving many workers worse off in practical terms. Interruptions in business operations, even if temporary, can disrupt supply chains, reduce production, and undermine investor confidence. Small and medium enterprises, which form the backbone of the economy, are particularly vulnerable to income losses and operational setbacks. The cumulative effect of these disruptions may slow economic recovery, exacerbate poverty, and widen social inequalities, turning a short-term energy management strategy into a long-term economic challenge.

Another critical consequence of smart lockdown measures is the likely decline in productivity across formal workplaces.

Even employees who remain on duty may adopt a more casual approach, knowing that operational hours are restricted or that the business itself is partially slowed. This relaxed work behavior can lead to missed deadlines, delays in decision-making, and reduced efficiency across sectors. For an economy already struggling with low industrial output and operational inefficiencies, such a drop in workforce discipline can further compound economic losses, slow project execution, and undermine overall business performance. In essence, the effects of a smart lockdown extend beyond energy savings, potentially disrupting the very mechanisms that keep the economy running.

Another critical area of concern is education. Online learning, while somewhat effective at higher degree and postgraduate levels, is largely ineffective for school and college students. The vast majority of learners — nearly 90% of total enrollment — are at the school and college level, where students are not familiar with digital learning methods. For these students, online classes often become a perfunctory exercise, with little meaningful engagement or knowledge retention. In practice, this mode of education adds minimal value and risks being a significant waste of time, failing to fill the learning gaps or advance students’ understanding.
Small and medium enterprises (SMEs) would also bear the brunt. Operating on tight margins, these businesses are ill-equipped to handle interruptions in operations. Delays in production, reduced customer flow, and rising costs could force many to scale down or shut operations altogether.

Equally important is the psychological effect. The very notion of a “lockdown” — regardless of its qualification as “smart” — revives memories of economic paralysis and uncertainty. This perception alone can dampen business confidence and discourage investment.

Yet, the government’s predicament cannot be ignored. With limited generation capacity and rising demand, maintaining the status quo is not sustainable. The challenge, therefore, is not whether action is needed, but how it is designed and implemented.

Instead of relying primarily on restrictive measures, policymakers must focus on structural solutions.

Reducing transmission losses, curbing electricity theft, incentivising energy-efficient technologies, and accelerating investment in renewable energy are critical steps that address the root causes of Pakistan’s energy crisis. Encouraging industries to shift toward off-peak operations through incentives rather than compulsion could yield far better results without disrupting economic activity. Implementing a smart lockdown without first tackling these systemic weaknesses is nothing short of putting the cart before the horse — it may provide fleeting relief, but it does nothing to solve the underlying structural problems. Such an approach risks creating a cycle of recurring blackouts, prolonged economic disruption, and social discontent. By focusing on temporary fixes while ignoring fundamental reforms, the government could inadvertently deepen public frustration, undermine investor confidence, and push small businesses and daily wage earners into greater hardship. A smart lockdown, in isolation, is not a solution; it is merely a Band-Aid on a gaping wound, and without comprehensive energy sector reforms, Pakistan will continue to face chronic power shortages and mounting economic instability.

If a smart lockdown becomes inevitable, it must be accompanied by protective measures. Targeted financial support for daily wage earners, relief for SMEs, and clear, transparent communication will be essential to minimise economic damage.

Without such safeguards, the policy risks doing more harm than good.
Ultimately, a smart lockdown may offer temporary relief, but it is not a cure. Pakistan’s energy crisis is deeply structural and requires long-term reforms, not short-term fixes. Policymakers must ensure that in their effort to manage electricity shortages, they do not inadvertently deepen the country’s economic challenges.

Dr Alamdar Hussain Malik
Advisor Veterinary Sciences, University of Veterinary and Animal Sciences, Swat
Former Financial Advisor, Finance Division, Government of Pakistan