I have no idea how this can be eradicated. I've meet good people who will be mannered, civil, come from good families, no deprivation whatsoever but still become inherently dishonest in their dealings. I have never understood how this works? I always thought that people who have a challenging past are dragged into these habits but there have been instances where almost a near perfect case turns out to be someone who isn't honorable.
Someone needs to find out why this is happening in the country otherwise we won't excel anywhere whatsoever. How can a person who has zero handicaps turn evil? It doesn't make sense at all!!
A few of my thoughts on this are below
1. My personal feeling is that we humans by default have a tendency to break rules but when we live within societies there's peer pressure to follow the mainstream values of honesty and sharing. For a society to function normally, the majority population must maintain the moral code and implement it at all times without external policing. This however doesn't work in our country.
For example, superstores in Europe let shoppers check-out on their own. People are believed to carry out transactions honestly and then pay on their own without any dishonesty. Such a system in Pakistan is unthinkable because there's a risk that people will misuse it. There's no peer pressure in our system to do the right thing, to stand properly in queues, to follow traffic rules even if no one is watching, etc. while in developed countries there's peer pressure to do the right thing as a major chunk of society follows the rules.
It's not saying that there are no negative elements in other cultures, there are, but they are few and sparse as compared to our culture where we have this mentality that if I didn't do it, someone else will, so it better be me. What we have is a few good people, what we need is a lot more for them to be in majority and kickstart a behavior change.
2. Our society intrinsically has developed into a hotbed of hypocrisy. No matter which way we slice a cross-section subsegment, it will be overloaded with individuals with a central trait of overarching hypocrisy as their central core belief system.
This factor alone is visible in every aspect of our society. Some of this stems from religion, some from social values, some from the clash of cultures that we see every day in front of us on our screens. All of that creates an identity that is neither here nor there.
3. The systemic spread of corruption and the trickle-down effect of the said corruption destroying the moral fiber of beings within our society. We are a materialistic society where the only parameter of success so far is the acquisition of goods. How we get goods is irrelevant.
The social evolution and empathy that we need are missing from society as a whole. Even the educated in our country laugh at corruption and downplay it. It's hideous to think that people at powerful places have such thoughts and they find no qualms laying it out in the open. Societies cannot move forward without empathy and even if they do, they tend to tear themselves apart. That's why certain empires never rise, and that's why certain fall despite having tonnes of resources.
4. We also tend to feel this pain more because we understand our people. I've traveled the world and lived in a few places and I've realized that most people that I've dealt with aren't reliable. But when it comes to my people, it feels bad and hurts more because there's a sense of betrayal attached to it.
Lastly, I don't think that the moral dishonesty of our people can be eradicated completely but I think we can try to do our part to ensure that there's at least some segment within our community that understands that there is a problem. Delving too much into a problem and only caring for it also leads to hopelessness which in itself is dangerous. One thing that is clear is that we won't be excelling unless we get rid of these flaws and the first step of getting rid of a problem is realizing that there's a problem. Unfortunately, many of us as you said aren't willing to accept the problem and start attacking the messenger personally instead of paying attention to the message.
It'll take time, or it may never happen, but one has to keep trying and that's I think the bottom line of this.