Dr Shabana Safdar Khan
The release of the World Bank’s latest report, Reclaiming Momentum Towards Prosperity, has sent a sobering message across Pakistan’s policymaking and development circles. It forcefully reminds us that the country’s current growth and development model is no longer capable of sustaining progress in poverty reduction and equality. What once supported modest gains has now eroded two decades of advancement, as poverty rates climb back to alarming levels.
According to the World Bank, Pakistan needs a new trajectory—one that prioritizes inclusive growth, equity, and sustained investment in human capital. The report highlights that poverty, which once declined from 64.3 percent in 2001-02 to 21.9 percent in 2018-19, has begun a steep upward reversal. By 2023-24, poverty surged to 25.3 percent, erasing years of progress in just a short span. If confirmed by the ongoing Household Integrated Economic Survey, this would signal not just an economic slowdown but a structural collapse of the very model Pakistan has relied upon.
The causes are manifold—Covid-19, devastating floods, inflation, political uncertainty, and macroeconomic instability. Yet the deeper failure lies in the country’s consumption-driven growth model, which creates cycles of fragility. While such growth may briefly lift numbers, it does not generate resilience, sustainable jobs, or equitable outcomes. The World Bank warns that progress in poverty reduction is fragile and easily undone by structural vulnerabilities.
The report does acknowledge that Pakistan’s social protection programmes have shielded many families from absolute destitution. Initiatives like the Benazir Income Support Programme (BISP) remain crucial lifelines. However, handouts cannot substitute for deep, structural reforms. Without reforming fiscal policies, improving service delivery, and investing in resilience, poverty will continue to reassert itself.
Human development indicators underscore the depth of the crisis. Nearly 40 percent of Pakistani children are stunted due to malnutrition. One in four primary-school-age children remain out of school, while three out of four attending cannot read or write after five years. Health spending remains meagre, with safe drinking water unavailable to nearly half of the population and safe sanitation denied to a third. How can a nation aspire to prosperity when its foundations—education, health, and human security—remain so weak?
The labour market offers no relief. More than 85 percent of jobs are informal, providing little security, benefits, or upward mobility. Women and youth—the country’s potential demographic dividend—remain excluded from opportunities. At the same time, regressive fiscal policies, reliant on indirect taxation, continue to erode household incomes. The poor pay disproportionately more, while elites escape meaningful contribution. This entrenches inequality and fosters elite capture of state resources.
The World Bank’s call for reforms is clear: expand access to quality services, create decent jobs, and protect households from shocks. Pakistan must realign its priorities toward equity and inclusion. That means investing in education systems that work, strengthening healthcare, ensuring clean water and sanitation, and making labour markets more inclusive. Without these, growth will remain superficial, and poverty will keep rising.
The lesson is unambiguous. Pakistan cannot rely on short-term consumption-driven spurts of growth or piecemeal handouts to break cycles of poverty. Structural imbalances must be confronted, elite privileges curtailed, and fiscal regimes made progressive. Only then can Pakistan reclaim momentum towards prosperity. The warning has been delivered; the choice is whether the state will act decisively to reform—or continue to drift while millions slide back into poverty.
