Pakistan has been pinning its hopes on the services sector for future economic growth, with the youth bulge projected as a demographic boon that would help turn the tide for the country’s economic woes. Meanwhile, a recent World Bank report, “Pakistan – Human Capital Review: Building Capabilities Throughout Life” has exposed the gravity of the crisis crippling the workforce. The reality is harsh and cannot be glossed over or swept under the carpet owing to confusing and repetitive numbers. Here is an explainer of what the numbers mean and how they point to the chronic ‘Human Development Deficit’ in Pakistan.

According to the World Bank report, the value of the Human Capital Index (HCI) for Pakistan, which is a measure of the skills, knowledge, and health of a country’s population, is the lowest in the region at only 0.41.

Taking into account factors such as the quality of education, health outcomes, and the level of training and skills that Pakistan’s workforce possesses, this number implies that a child born in Pakistan today is expected to attain only 41 per cent of the human capital that she could potentially achieve by the age of 18, given the risks of incomplete education and poor health conditions prevailing in Pakistan.

The report reveals that over 20 million children aged 5-16 years remain out of school in Pakistan, and approximately 79pc of children in Pakistan are unable to comprehend a basic age-appropriate story by the age of 10. These alarming numbers highlight the state of education in Pakistan.

Instead of a demographic dividend, the current status of education and child stunting leads to fears about young adults being unproductive burdens

Keeping in perspective the UN estimate for the demographic dividend window, which is expected to open in 2042 if Pakistan becomes successful in reducing the total fertility rate to three children per woman at a fast pace, these staggering numbers — the 20.3 million currently out of school and more who will enter the workforce in ten years — of working age population are going to turn into a dependency burden instead of dividend.

The lack of education and skills training among these children means that they will not only remain unemployed but also become a burden on the country’s resources.

Additionally, over 75pc of women in Pakistan are out of the labour force, which further magnifies the dependency rate. Currently, 40pc of the children under five are stunted, who will make up the 2035 workforce. Given that stunting can have long-term consequences on cognitive abilities, it raises serious questions about the productivity of this future workforce.

This, coupled with the changing global job market and the increasing redundancy of jobs due to the unleashed AI revolution, paints a bleak picture for the future of these working-age dependents.

With the economic development in Pakistan being led by the services sector, the situation becomes even more precarious as this sector requires a highly competitive and skilled workforce.

If Pakistan is unable to reduce its total fertility rate, the level of youth dependency will remain high, and the country may face a long-term risk of dual (youth and old age) dependency.

To avoid this, family planning programmes need to be expanded and strengthened. As of December 2022, the per capita debt in Pakistan is approximately $548.70. With meagre employment opportunities, poor education and health outcomes, and an economy on the verge of default, a growing population will serve as a time-ticking bomb.

The future of Pakistan’s economy and its people is at stake if the need for human development is not taken seriously. Pakistan urgently needs to prioritise its investment choices to ensure a sustainable and prosperous future.

The government and private sector must take action to expand access to education, improve the quality of education, and provide incentives for family planning. Public-private partnerships can play a crucial role in investing in education and skills development to ensure that all children in Pakistan have access to the education they need to succeed.

The consequences of not paying attention to human development are dire. Without access to education, these out-of-school children are at risk of becoming a lost generation with limited opportunities for social and economic mobility.

This would have broader social and political implications, as a disenfranchised and marginalised population is more vulnerable to extremist ideologies and political manipulation.

The violent protests that ensued after Imran Khan’s arrest indicate deep-rooted frustration and anger in the masses. Ordinary Pakistanis are suffering from a poverty of knowledge and a poverty of opportunity, transcending political affiliations.

With political and economic instability already plaguing Pakistan, now is the time to prioritise human development and invest in the future of its children. The stakes are high, and the cost of inaction is simply too great. The future of Pakistan depends on it.

The writer is an MPhil Scholar and Research Assistant at PIDE, Islamabad.
Twitter: @AqsaGull

Published in Dawn, The Business and Finance Weekly, July 3rd, 2023