Pakistan is in state of war. Going by that, situation could have been a lot worst. But the way Pakistan Armed Forces have handled the situation is nothing but commendable. Pakistan, therefore is no where close to a failed state. It has a growing economy, and increased amount of graduates. That being said.. i am going to end with a great quote of the so-called MILITARY DIKTATOR of Pakistan.
It's true that Pakistan is in a state of war. But so is India with its Maoists and multiple other insurgencies being fought by hundreds of thousands of Indian troops in central, eastern, and Northeastern India, and Kashmir.
The big difference is that the war has come to the cities of Pakistan, while in India it has remained confined to the rural areas so far.
The net result is that war in Pakistan is badly affecting economic activity, and India's economy has so far been unscathed.