The World Bank has stated that Pakistan is at a critical juncture of thecrisis, where it must decide whether to continue with policies favoring theelite and decisions influenced by military, political, and business leadersthat keep 40% of the population living below the poverty line or changecourse for a more sustainable future.
This clear warning from the World Bank comes ahead of the upcomingelections, emphasizing that international lenders and development partnerscan only provide advice based on global experiences and some financialassistance, but the difficult choices and implementation decisions liewithin the country.
In Pakistan, the Country Director of the World Bank, Najy Benhassine,issued a set of policy notes for debate and discussion before the newlyelected government takes office. He mentioned that it is a positive signthat countries with strong and sustained economic growth, such as India,Indonesia, and Vietnam, have made correct decisions during crises andsuccessfully managed challenges. Pakistan has the opportunity to makepolicy changes in this direction.
He pointed out that Pakistan is facing multiple economic challenges,including inflation, increased electricity prices, weather shocks, andinsufficient funding for development and climate adaptation. He furtherstated that Pakistan’s economic model is not reducing poverty but isinstead experiencing an alarming rise in child malnutrition, poor learningoutcomes, and increased child mortality, primarily due to food insecurity.
Najy Benhassine also highlighted that Pakistan’s poverty rate, as measuredby the $3.20 per day threshold, had dropped to 34.3% by 2018 from 37.5% twodecades ago but had now risen to 39.4%, with more than 12.5 millionadditional people falling below the poverty line, measured at $3.65 dailyincome.
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According to the World Bank, Pakistan’s average real per capita incomeincreased by just 1.7% from 2000 to 2020, while South Asia as a regionwitnessed a 4% increase in per capita income, causing Pakistan to lagbehind its neighboring countries.
The World Bank further stated that Pakistan’s per capita income ranking inthe region has declined from being a top country in South Asia in the 1980sto now being among the lower-ranked countries in the region. The World Banksuggests that through reforms, immediate spending reductions of about 1.3%and medium-term reductions of approximately 2.1% can be achieved, resultingin funds that should be used for healthcare, education, and sanitation.
