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Pakistan needs deep-rooted economic transformation: World Bank

Pakistan needs deep-rooted economic transformation: World Bank

LAHORE: Pakistan urgently needs to invest more and better in its people if they are to be richer, better educated, and healthier when the country turns 100 years old in 2047, says a new report by the World Bank.

It recommends the essential reforms Pakistan needs now to accelerate and sustain growth. This means increasing and improving human capital investment, boosting productivity, promoting social and environmental sustainability, ensuring good governance, and leveraging its location to connect more with neighbours and the world beyond, says the report.

“There are steps Pakistan can take today to boost its economic performance and thereby ensure a better future for its people,” says Hartwig Schafer, World Bank Vice President for South Asia.

“These steps are ones that other countries have taken to open up their business sectors to competition and innovation and laying the foundations for growth, investment, and good jobs.”

The forward-looking report argues that Pakistan’s greatest asset is its people – a young population of 208 million. This large population can transform into a demographic dividend that drives economic growth.

To achieve that, the World Bank recommends that Pakistan must act fast and strategically to: (i) manage population growth and improve maternal health, (ii) improve early childhood development, focusing on nutrition and health, and (iii) boost spending on education and skills for all.

“Because the next generation is meeting only 40 per cent of its potential, it means that Pakistan is foregoing much of its economic growth, but this can change if women’s potential is unlocked,” says Annette Dixon, World Bank Vice President for Human Development.

“When women and girls are empowered to make their own decisions, they stay in school longer, they start families a little later, have fewer children, contribute more to the economy, and invest more in their children. It’s a virtuous circle that’s good for families and good for the whole country.”

In addition to human capital, the World Bank report calls for reforms in other key areas. To increase investment levels, the report recommends ways to make it easier to do business in Pakistan, as well as reforms to tax policy and administration to increase fiscal space and public investment in the country’s top priorities.

Strong governance would be crucial to implementing a difficult set of reforms. The report discusses the key elements of a strong governance environment, including the need for a stronger civil service.

“Accelerating and sustaining Pakistan’s growth over a 30-year period is ambitious, but possible,” says Illango Patchamuthu, World Bank Country Director for Pakistan.

“Many other countries have achieved economic transformations within a generation with the right set of policies. The World Bank is committed to working with the government of Pakistan and other stakeholders in the country to advance the necessary reforms so that Pakistan can significantly increase growth and sustain it, so it is an upper middle-income country by the time it celebrates its centenary.”