Wasting potential

Published April 8, 2024

“Contradictions abound in a country of weak institutions and strong individuals, of economic growth without human development, of private greed and lack of social compassion, of election rituals without real democracy.” These words by the late Dr Mahbubul Haq from the 1997 book Human Development in South Asia sum up Pakistan’s challenges, which have continued since the country’s inception in periods of high growth and stagnation.

The recent years of recurring political crises, large-scale natural disasters and climate change events, and deteriorating global geopolitical and economic conditions have only exacerbated the life for 230 million citizens of the country and human development indicators, with worsening nutritional, health and educational outcomes as the poor continue to slip into even greater poverty.

Therefore, it is not surprising that the country was placed in the ‘low human development’ category by the latest United Nations (UN) Human Development Report released last month, ranking 164 out of 193 countries on the Human Development Index (HDI).

The new HDI ranking reflects a decline from the previous Index, when Pakistan was ranked 161, due to its insufficient education, health, and income indicators.

Pakistan’s new 161 HDI ranking reflects its silent, deep human capital crises, due to historic disregard of human development investments

The Index shows that some South Asian countries are making great strides in human development, others less so. But Pakistan isn’t at all, as it now trails far behind other regional countries. It is the only South Asian economy, along with Afghanistan, placed in the low human development category.

Sri Lanka — despite defaulting on its debt payments amid a large-scale economic and financial crisis — and the Maldives are placed in the high human development category and on top in South Asia. Bhutan, Bangladesh, India, and Nepal have all been categorised in the medium human development category. Only Afghanistan — at 182 on the HDI ranking — is a little worse off than Pakistan in the South Asian region.

Commenting on the dismal state of human development in a country of 250m, the former investment minister wrote on X (formerly Twitter) that it does not shame people at the helm of affairs. “They keep on giving contracts to build concrete structures. Will someone champion the delivery of quality education?”

The HDI is a measure of a country’s standard of living, health, and education, and it seeks to quantify a country’s level of prosperity based on economic and non-economic factors.

“Despite managing the Covid-19 pandemic well, Pakistan’s HDI and global ranking have suffered due to persistent social, economic and political pressures, including macroeconomic challenges as well as the lingering effect of the 2022 floods,” UNDP Pakistan Resident Representative Samuel Rizk said at a seminar in Islamabad last week.

He noted a notable 33 per cent decline in Pakistan’s inequality-adjusted HDI. In the Gender Inequality Index, the country’s rank remains at 135 out of 166 countries. The Multidimensional Poverty Index score also stays unaffected, indicating persistent challenges.

The countries that have improved their HDI the most since 1980 are mainly in Asia. Rapid GDP growth has helped China and India, but even slower-growing countries such as Sri Lanka, Nepal and Bangladesh have fostered human development by making progress in health and education.

The World Bank expects Pakistan’s economic growth to rise from the current fiscal year but remain well below 3pc for the next two years. Even these estimates hinge on continuous fiscal consolidations and a new bailout program from the International Monetary Fund, World Bank country economist Sayed Murtaza Muzafarri said in a briefing in Islamabad last week.

This means the government would be short of resources to boost its social sector spending, which has a direct bearing on human development.

However, past experience indicates that the country’s elitist ruling classes tend not to spend enough money in areas directly linked to human development, even during periods of higher economic growth.

Given the low priority given to human development, it is not surprising that Pakistan currently suffers some of the lowest rates of literacy, life expectancy, and infant and maternal survival in the world.

Speaking at a Pakistan Economists Round Table seminar organised by the World Bank to highlight the findings of the latest Human Development Report 2023-24, former state minister for finance, Dr Aisha Pasha, was reported to have said that the country does not have any resources left to spend on human development.

“I foresee further catastrophe in the human development index, and food insecurity is on the rise,” she noted, adding that the debt trap would unleash further human catastrophe. “The poor people have borne the brunt of economic reforms in the past two years, which has to be stopped. It is high time that the elites now take a hit,” she argued.

The World Bank described Pakistan’s deteriorating human development situation as a “silent, deep human capital crisis”. “Even Pakistan’s neighbours are performing better, as the country’s inequality-adjusted human development index is also worsening,” said Mr Rizk.

The UN Human Development report reinforces the findings of an earlier World Bank report, ‘Pakistan Human Capital Review,’ which quantified the crisis and found that the country’s human capital was the lowest in South Asia. It estimates that children born today in the country would only be able to realise 41pc of their potential.

The bank has also cautioned that over 10m additional individuals in Pakistan face the looming threat of descending into poverty. Two of every five persons are estimated to be living below the poverty line. The apprehension stems from a sluggish economic growth rate of 1.8pc coupled with soaring inflation at a staggering 26pc for the current fiscal year.

Pakistan’s human development crisis stems from the systemic political, economic, and social challenges it has avoided for the last several decades. If the country is to make strides in human development, it must redirect its priorities, undertake critical long-delayed reforms, and make significant investments in people.

The nation cannot hope to boost productivity, grow rapidly and graduate from a low-income country to a middle-income economy with a heavy disease burden and a very low literacy rate.

Published in Dawn, The Business and Finance Weekly, April 8th, 2024

Opinion

Editorial

Border clashes
19 May, 2024

Border clashes

THE Pakistan-Afghanistan frontier has witnessed another series of flare-ups, this time in the Kurram tribal district...
Penalising the dutiful
19 May, 2024

Penalising the dutiful

DOES the government feel no remorse in burdening honest citizens with the cost of its own ineptitude? With the ...
Students in Kyrgyzstan
Updated 19 May, 2024

Students in Kyrgyzstan

The govt ought to take a direct approach comprising convincing communication with the students and Kyrgyz authorities.
Ominous demands
Updated 18 May, 2024

Ominous demands

The federal government needs to boost its revenues to reduce future borrowing and pay back its existing debt.
Property leaks
18 May, 2024

Property leaks

THE leaked Dubai property data reported on by media organisations around the world earlier this week seems to have...
Heat warnings
18 May, 2024

Heat warnings

STARTING next week, the country must brace for brutal heatwaves. The NDMA warns of severe conditions with...