Ayesha Mudassar

Pakistan needs to invest in its human capital to enable its people to contribute positively to the growth of economy, says a renowned economist. "Human development is essential for sustainable economic growth, to develop prudent health system, to prepare a skilled workforce, and to compete effectively in the global economy," said Dr Nadeem-ul-Haque, Vice Chancellor of Pakistan Institute of Development Economics (PIDE). He said enormous investment in human development has boosted employment, encouraged technological adaptations, and improved the quality of life in the developed world. However, he said, the human development process is not encouraging in Pakistan. Pakistan had been performing weakly in all three components of human development – per capita income, education, and health.

As per the United Nations Human Development Report, an average Pakistani receives only eight years of schooling. Life expectancy at birth is 66.1 years, and gross per capita national income is just $4,624. Years of inconsistent economic policies have resulted in the deteriorating quality of education, weak health infrastructure, and declining per-capita income. Dr Nadeem mentioned that education has remained one of the highly neglected sectors in Pakistan. He said the allocated expenditure is insufficient and is utilised inefficiently. Teacher absenteeism, inadequate school infrastructure, and lack of access to technical and vocational education are the major problems. The country's health system is also witnessing several challenges including the highest infant mortality rate in South Asia, with the lowest life expectancy, and largely unequipped infrastructure – six hospital beds per 10,000 people, doctor to patient ratio of 1:1,300.

The World Bank’s recent report ‘Macro Poverty Outlook for Pakistan' illustrated a decline in gross domestic product (GDP) per capita income for Pakistan, from $1,613.8 in 2021-22 to $1,399.1 in 2022-23. Another World Bank’s report, “Pakistan Human Capital Review (HCR), Building Capabilities Throughout Life,” stated that the country's human capital index (HCI) value of 0.41 is lower than the South Asia average of 0.48, and human capital outcomes are more comparable to those in Sub-Saharan Africa, which has an average HCI value of 0.40. Dr Nadeem said Pakistan needs to significantly increase investment in human capital to address these issues. “The implementation of a comprehensive social protection system along with the creation of a business-friendly environment will bring visible change in the economic outlook of the country,” he said.

Credit: INP-WealthPk