Pakistan can grow at a faster rate by doubling the investment rate in the private sector and sustained structural reforms, said Illango Patchamuthu, World Bank (WB) Country Director to Pakistan.
“The stabilization process will continue over the next 5 years and at the same time, structural reforms need to happen during 2025-30. Pakistan can grow at a faster rate of 7 percent”, said the WB official adding that for achieving this growth rate the country needs to double the investment rate especially in the private sector, which has been 10 percent for the last 20 years and needs to be 20 percent, which can result in a growth rate of 6-8 percent.
He stated this while addressing Pakistan’s second Human Capital Summit, building upon the ‘Girls Learn, Women Earn’ initiative launched in December 2019, co-hosted by the Japan International Cooperation Agency (JICA) and World Bank Pakistan.
The summit marked the progress being made in Pakistan in efforts to enable girls to excel in school, and women to thrive in the workplace. The participants highlighted the need to invest in girls’ education and women’s economic empowerment as crucial to Pakistan’s sustained growth.
Illango Patchamuthu said that by 2047, Pakistan could become an upper-middle-income country with an over $2 trillion economy by carrying out sustained reforms. The per capita income will also increase by more than 5 times.
This is one scenario and is even possible by 2042. The second scenario is business as usual like for the last 30 years and continuing with the same economy. By 2047 Pakistan but will have around 400 million people.
He identified constraints to accelerating and sustaining growth, which includes investment for human capital accumulation. Human capital is the core of Pakistan’s future. Pakistan is currently home to 210 million people and is projected to grow to 400 million by 2050.
Two major challenges are fertility rate and stunting, but Pakistan can deal with them easily. The first priority for Pakistan is to make the best use of its greatest asset, its people. The immediate interventions for human capital investments are to reduce fertility and stunting.
Illango Patchamuthu said that every additional year of schooling for a girl increases her future earnings by up to 10 percent.
Pakistan can use the untapped economic potential of women in the workforce and estimates indicate this can boost the economy by up to 30 percent, by empowering women and girls to expand their skills, access to information, mobility, and access to finance and assets.
Dr. Shinichi Kitaoka President of JICA and Human Capital Champion said that investments in human capital, such as education, health, and nutrition, are inevitable for building a progressive foundation for human security.
Learning from Japan’s experience, we know that countries can also enhance their Human Capital by thriving on trust and promoting the role of families and communities in national development. JICA will work pro-actively to build and nurture Human Capital by leading with trust and collaborating in the areas of education, health and nutrition as key building blocks of sustained Human Security for all.