publication March 18, 2019

Pakistan@100: Shaping the Future

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Read the full report at worldbank.org/pakistanat100 

World Bank



REPORT HIGHLIGHTS

  • Pakistan will soon turn 72 years old. Looking ahead, it has important decisions to make if it is to become an upper middle-income country by 2047, when it turns 100 years old.
  • Accelerating and sustaining growth over a 30-year period is ambitious, particularly given Pakistan’s most recent track record, but it is possible. Other countries such as China, South Korea, and Malaysia have achieved similar economic transformations.
  • What will Pakistan look like when it turns 100 years old? A World Bank report titled "Pakistan@100: Shaping the Future" articulates the reforms that are necessary for Pakistan to accelerate and sustain growth, and boost shared prosperity for all.

Pakistan@100: Shaping the Future builds on a comprehensive framework including essential elements for a growth strategy that other countries have successfully followed:

  1. Accumulation of physical and human capital, which will require both increasing public and private investment;
  2. Allocation of resources to their most productive use, through structural transformation and openness to trade and investment;
  3. Environmental and social sustainability, to ensure that the unsustainable use of finite resources does not constrain growth in the future, and that everybody can benefit from and contribute to growth; and
  4. A governance environment that supports growth and the successful implementation of necessary reforms.

Pakistan@100: Shaping the Future argues that Pakistan’s young and growing population of 208 million is its greatest asset. Pakistan can and should turn its large youth bulge into a demographic dividend that drives economic transformation. Achieving that requires a large and diverse set of reforms. This report recommends immediate reform priorities that address identified constraints to accelerating and sustaining growth over the medium term:

Human capital accumulation

  • Population growth: Reduce fertility rates through the implementation of comprehensive awareness programs to encourage informed decisions on parenthood, including information on birth control, reproductive health, young women’s health, and child development through health, nutrition and stimulation.
  • Stunting: Implement early childhood development programs including immunizations, deworming and malnutrition treatment.
  • Human capital spending: As a first step, improve efficiency of public spending. As fiscal space increases, increase spending on health and education.

Physical capital accumulation

  • Taxation: Improve (i) tax administration, making it taxpayer-friendly, more efficient and better able to leverage modern technology, and (ii) tax policy through simplification and ensuring federal-provincial harmonization and integration.
  • Allocation of resources
  • Business environment: Introduce regulatory reforms, leveling the playing field for all firms by reducing red tape, and the scope for excessive discretion and arbitrariness.
  • Trade openness: Adopt a simple, transparent tariff structure with reduced tariffs and clear and transparent rules governing the use of discretionary provisions. Support greater integration efforts within the South Asia region.

Environmental and social sustainability

  • Water management: As a first step, strengthen institutions, regulatory frameworks and information systems (monitoring, measuring) for water management. Move toward irrigation rates that promote water saving and efficient use. Eliminate environmentally damaging subsidies.
  • Social inclusion: Increase female labor force participation from 26% today – which is among the world’s lowest – to 45% by 2047, by providing i) legislative protection to women against discrimination and gender-based violence, and ii) incentives for girls and women’s secondary and tertiary education.

Governance

  • Transparency: Provide transparent and accessible information on politicians’ track-records of reform and service delivery to citizens. Improve transparency of budget documentation.
  • Accountability: Complete the devolution of responsibilities and resources to local governments. Streamline ICT initiatives to provide avenues for citizens to hold service providers accountable. Provide levers for citizens to sanction public officials and political leaders when policy and service delivery do not meet their expectations.

Pakistan@100: Shaping the Future has benefited from funding by the UK Department for International Development and Australian Department for Foreign Affairs and Trade.