Arshad Mahmood Awan

In Pakistan, economic policy debates often revolve around macroeconomic indicators—fiscal deficits, GDP growth, interest rates, and exchange rates. While these numbers dominate the discourse, the deeper and more critical issue of human development is frequently overlooked. Policymakers’ focus on short-term economic metrics often neglects the real engines of sustainable growth: human capital, productivity, and competitiveness.

As economist Javed Hassan astutely points out, “The problem is not that GDP growth is irrelevant; it’s that it’s a lagging indicator, an effect, not a cause.” The true foundation of a thriving economy lies not in short-term indicators but in the long-term development of human resources. However, the elite who shape Pakistan’s national discourse largely ignore the country’s alarming human development indicators. While some may voice concern over air pollution, which directly affects them, the more pressing issue remains the systematic failure to nurture and invest in human capital.

The Stark Reality of Human Development in Pakistan

Human development in Pakistan is not only poor but also deeply inequitable. According to the World Bank’s Country Partnership Framework, Pakistan’s Human Capital Index (HCI) stands at a dismal 41 out of 100, significantly lower than expected for a country at its income level. This reflects the reality that economic growth is not only sluggish but also inequitably distributed, leading to severe disparities in access to health, education, and other key development indicators.

One of the most distressing figures that emerge from these statistics is child stunting. An astounding 38% of children under the age of five suffer from stunting, with the figure rising to a shocking 60% in the poorest rural districts. Stunting is primarily caused by poor nutrition, inadequate dietary diversity, and unsafe water—factors that are unfortunately prevalent across the country. In fact, nearly a quarter of Pakistan’s population lacks access to clean water and sanitation, and this deficiency is most acute in impoverished areas.

The First 1,000 Days: A Critical Window of Opportunity

The first 1,000 days of a child’s life are crucial in preventing stunting and ensuring optimal physical and cognitive development. Yet in Pakistan, basic needs like hygiene and access to clean water remain largely neglected. While finance ministers discuss abstract concepts like macro hygiene and fiscal health, the focus must shift to literal hygiene. Ensuring access to clean water and sanitation, as well as improving child nutrition, could have a profound impact on the country’s human capital.

Without addressing these foundational issues, Pakistan cannot build a healthier, more productive workforce—one capable of driving the economy forward. The neglect of this vital area means that millions of children are being denied the opportunity to grow into productive, capable adults.

The Education Crisis: A Generation Left Behind

Education in Pakistan presents another dire challenge. The country’s learning poverty rate stands at 78%, meaning nearly four out of five children cannot read age-appropriate texts by the time they turn 10. This statistic highlights the crisis in the country’s educational system, where millions of children are not just out of school but also receiving subpar education.

At present, over 25.6 million children, or roughly one-third of children aged 5 to 16, are out of school. Among those who are enrolled, two-thirds fail to acquire even basic literacy. This is a staggering figure. Out of 77 million children in Pakistan, only 17 million are receiving even the most minimal education. In a world that increasingly values education and skills, how can Pakistan expect to compete in the global economy with 60 million children left behind?

The situation is even more dire for girls. Only 26% of girls aged 14-15 are enrolled in secondary school, a reflection of the significant gender gap in education. Pakistan ranks 142nd out of 146 countries in the World Economic Forum’s 2023 Gender Gap Report. With female labor force participation standing at just 25%—one of the lowest in lower-middle-income nations—half of the population is being sidelined. This exclusion from education and the workforce stifles Pakistan’s potential for growth.

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The Education System: A Failing Structure

Pakistan’s education system remains riddled with inefficiency, corruption, and a misguided focus on infrastructure over quality. While schools are built on paper, the reality is often far less promising. Many teachers are either ghost employees or under-qualified, further deepening the crisis. To address the fundamental problem of human capital, Pakistan must prioritize learning outcomes over physical infrastructure. More schools are not the answer if the education provided does not equip children with the skills and knowledge needed to succeed in a rapidly evolving global economy.

What Pakistan urgently needs is a national strategy to address the educational neglect faced by 60 million children. Moreover, the existing system must focus on equipping children with skills relevant to the modern world. In the digital age, Pakistan cannot afford to rely on an unskilled, illiterate workforce.

Climate Change: A Looming Existential Threat

Beyond the education crisis, Pakistan faces another existential challenge: climate change. The country ranks among the top 10 nations most affected by climate change and natural disasters. PM2.5 pollution levels in cities like Lahore are five times higher than the World Health Organization’s safe limit, shortening life expectancy by 4.3 years.

While there is seasonal outrage over Lahore’s smog, meaningful, long-term action to mitigate the effects of pollution and climate change remains absent. The country needs a concerted effort to combat environmental degradation, not just for the sake of the planet but also for the future of its people.

The Way Forward: Prioritizing Human Development

The economic future of Pakistan is not just about GDP growth or fiscal adjustments. As Nobel laureate Amartya Sen argues, “Human capital formation is the key to long-term economic growth.” No country has managed to ascend the economic ladder without prioritizing the well-being and development of its people—whether through education, healthcare, or overall human development.

Pakistan’s policymakers need to shift their focus from short-term economic indicators to long-term investments in its people. The country does not need another “charter of economy” or “charter of democracy.” What it desperately requires is a Charter of Human Development—a national commitment to investing in its human capital. This should be the central agenda for the government and the country’s political and economic leaders.

Conclusion: A National Commitment to Human Capital

The sooner Pakistan realizes the importance of human development, the better. The country’s economy cannot thrive if half of its population is excluded from the educational system and if millions of children are denied access to the basic necessities of life. By focusing on improving human capital through education, health, and access to basic services like clean water, Pakistan can build a more sustainable, inclusive, and prosperous future.

In the end, economic success depends on more than just numbers. It depends on people—their health, their education, and their ability to contribute to society. If Pakistan is to truly fulfill its potential, it must invest in its greatest asset: its people.