September 4, 2003	Thursday	Rajab 6, 1424

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WASHINGTON, Sept 3: Pakistan’s economy has grown much more than other low-income countries, but the country’s social progress lagged behind its economic growth, says the World Bank annual report released on Wednesday.

It says the educated and well-off urban population in Pakistan lived not so differently from their counterparts in other countries of similar income range. However, the poor and rural people are being left behind. For example, access to sanitation in Pakistan is 23 per cent lower than in other countries with similar income.

Despite the recent economic improvements, Pakistan’s external and public debt are both quite large, and there are concerns over the fragility of its external position and future growth prospects, the report says. Perceptions about security risks and political instability also continue to dampen investor interest and prospects for exports, and foreign direct investments, the World Bank warns.

“In addition, a greater challenge faces Pakistan: that of its transformation — politically, economically, socially, and with respect to gender — to a modern state.”

Poverty, according to the report, remains a serious concern in Pakistan. With a per capita gross national income of $420, poverty rates, which had fallen substantially in the 1980s and early 1990s, started to rise again towards the end of the decade.

According to the latest figures (for 1998-1999), as measured by Pakistan’s poverty line, 33 per cent of the population is poor. More importantly, differences in per capita income across regions have persisted or widened. Poverty varies significantly among rural and urban areas and from province to province, from a low of 16 per cent in the northeastern areas to 44 per cent in the NWFP.

The report acknowledges that Pakistan has made significant development in its 56 years since independence, as measured by some key social indicators.

It states that health and education services have expanded and improved, and life expectancy has increased from 59 years in 1990 to 63 in 2001, adding that infant and maternal mortality rates have dropped, as have illiteracy rates.

It says that in the late 1990s Pakistan was in a position of extreme vulnerability and after a decade of inward-looking policies, in November 1999 the country embarked on a significant economic reform programme and has since achieved considerable improvements.

“Pakistan has turned around a deteriorating macroeconomic situation to a rapidly improving one. In 2002/2003 GDP grew by an estimated 5.1 per cent while inflation remained low at 3.3 per cent. The budget deficit was contained at 4.6 per cent of GDP,” the report adds.

The World Bank, however, warns that despite these favourable developments, Pakistan still lags behind countries with comparable per capita income in most social indicators. Only 44 per cent of its population is literate, compared to an average of 64 per cent in countries with similar income per capita.

The government’s economic reform programme has renewed hope that these development challenges can be tackled seriously, the report says. “But this will not be achieved without fully developing human capital, improving the investment climate, and increasing productivity growth to sustain the five or six per cent annual growth rate needed to significantly reduce poverty.”

“There are also significant gender gaps in both literacy and health status in Pakistan. Gender disparities in education remain significant. While the male population completes an average of five years of schooling, the female population in Pakistan completes only two-and-a-half years. The enrollment rate for boys is 77 per cent as opposed to 60 per cent for girls. Maternal mortality remains high at 200 per 100,000 live births.”