Inclusive Growth in Pakistan

Nov 9, 2018

The Pakistan National Human Development Report 2017 points towards large disparities in human development across districts and cities of Pakistan. The Human Development Index (HDI) of 0.877 for Lahore is on average equal to that for France and Spain. It is higher than the average HDI for Saudi Arabia, United Arab Emirates and many other countries. Lahore and five other cities of Pakistan fall in the Very High Development Category.

On the contrary, 14 districts of Pakistan, mostly in Balochistan, are worse than the poorest countries such as Nigeria, South Sudan and others in terms of their HDI values. Similarly, according to the Pakistan National Human Development Report, the HDI for women is 25 percent lower than for men. Women labor force participation of 24.9 percent is the lowest when compared to India, Bangladesh and Sri Lanka. Factoring inequality in human development across regions and using gender as a measure, shows that growth in Pakistan has been less inclusive.

There are however huge opportunities for inclusive growth in the country. The burgeoning youth population, if provided skills and capacities, will not only drive growth, but their participation will also make it more inclusive for two reasons. First, they constitute the largest population segment. Second, like women, they have not fully benefited from the growth process thus far. Youth unemployment is higher than the overall unemployment rate in the country.

Innovation in technology and other sectors is creating new avenues for growth and livelihoods. Federal and provincial governments have set up funding windows and incubation facilities to promote innovation and entrepreneurship. Some of the startups by young entrepreneurs have generated promising results. Technological innovation if sustained and expanded, can play an important role in inclusive growth. They will contribute to diversi􀃶cation of the economy and in creating a knowledge-driven services sector.

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