Regarding this statement:
"That can only mean the capacity of the state to protect its citizens has lost much of its credence."
I think the phrase "has lost much of its credence" is not semantically appropriate nor logically valid as a description of the state's capacity to protect its citizens. Capacity in this case is not measured in terms of "credence," which is a measure of credibility; instead, it is measured in terms of "power" or "capability." For clarity, I would therefore suggest restating that sentence as follows:
"That can only mean that the state has lost much of its capability to protect its citizens."
or:
"That can only mean that the state has lost much of its power to protect its citizens."
If we want to focus instead on the credibility of the state as a protector of its citizens, then that sentence could perhaps be restated as follows:
"That can only mean that the state has lost much of its credibility as a protector of its citizens."
or:
"That can only mean that the state has lost much of its credence as a protector of its citizens."