• Mon. May 22nd, 2023

Pakistan needs to invest in human capital: World Bank

The logo of the World Bank. — AFP/File
The logo of the World Bank. — AFP/File
  • Strong human capital essential for sustainable economic growth: WB VP.
  • Report claims Pakistan’s HCI of 0.41, lower than average in South Asia.
  • Long-term commitment, sustained human capital investments needed: report.

Pakistan needs to significantly increase investments in human capital to address the severe gaps it faces in education and health outcomes, a report published by the World Bank said Tuesday.

The report titled ‘Pakistan Human Capital Review (HCR), Building Capabilities Throughout Life’ stated that while the country has made significant progress in reducing poverty over the past two decades — reaching middle-income status — low human capital outcomes limit its progress, capping its growth and development prospects.

According to a statement released by the organisation, World Bank Vice President for Human Development Mamta Murthi said: “Strong human capital is essential for sustainable economic growth, to prepare the workforce for the more highly skilled jobs of the future, and to compete effectively in the global economy”.

Murthi further stated that investing in human capital can help the country build resilience and adaptive capacity to “withstand the effects of climate change”, while simultaneously “developing the skills and ingenuity needed for a green and inclusive economy and to reduce inequality”.

Furthermore, the report — through an analysis of new and existing data — documents and quantifies Pakistan’s human capital crisis.

According to the publication by the World Bank, Pakistan has a Human Capital Index (HCI) of 0.41 which means that a baby born in Pakistan today will only be 41% as productive as they could be if they enjoyed complete education and full health.

The average HCI in South Asia is 0.48. Bangladesh has an HCI of 0.46 while Nepal’s is 0.49.

“However, Pakistan’s human capital outcomes are more comparable to Sub-Saharan Africa’s, which has an average HCI of 0.40,” the statement stated.

The report also identifies that Pakistan’s human capital crisis is compounded by the country’s low female labour force participation.

“With over 20 million school-age children out of school, high levels of child malnutrition, and low empowerment of women, Pakistan’s human capital challenges are among the most serious in the world — it is a human capital crisis that is profound, silent, and with far-reaching negative effects on the potential of the country and its people,” said Najy Benhassine, the World Bank’s Country Director for Pakistan.

He further contended that if Pakistan brings its population growth rate under control, increases investment in the supply and quality of health and education, and brings women into the labour force, it can realise sub­stantial economic growth.

World Banks’ report also provides a wide-ranging assessment of the key challenges and opportunities for Pakistan to improve its human development outcomes, which it claims needs “a long-term commitment and sustained human capital investments”.

Moreover, the HCR puts forward several recommendations for Pakistan to boost its human capital.

These include the “need for long-term planning that goes beyond the tenure of any government and political cycle; making family planning a priority across all human development initiatives; investing more smartly in people and developing avenues for them to deploy their human capital more productively; making child malnutrition a national priority; and introducing measures to reduce out-of-school children and improve learning outcomes”.

Lire Ersado — the lead author of the report and World Bank’s Human Development Practice Leader for Pakistan — said: “Pakistan needs a healthy, skilled, and resilient population to ensure high economic growth that is both sustainable and inclusive.

“With the right policies and invest­ments, the growing working-age population can become healthier, more educated, more skilled, and more productive—and can earn more if the economy generates more and better jobs.”

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