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Pakistan falls in human development

The global Human Development Report of 2023-24 has been released recently by the United Nations Development Program (UNDP) from New York. Since 1990, this report has been presenting rankings of countries in the Human Development Index (HDI).

The HDI of a country is measured by four indicators, as follows:

* Gross national Income per capita (in PPP $)

* Life expectancy at birth (years)

* Expected years of schooling (years)

* Mean years of schooling (years)

The value of the HDI ranges from 0 to 1. Grouping of countries is done on the following basis:

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High: 0.8 to 1.0

Medium: 0.550 to 0.8

Low: Below 0.550

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The extremely depressing finding from the report is that according to the latest ranking Pakistan is ranked 164thout of 193 countries. With HDI of 0.540 it is in the group of countries with a low level of human development.

Pakistan has fallen from the medium to low level of human development over the years. According to the 2020 ranking, Pakistan was in the 154th position. The HDI value was 0.557 and it was characterized as a country with a medium level of human development. In the 2021-22 ranking it fell to the 161st position and was relegated to countries with a low level of HDI.

The source of further concern is that Pakistan is ranked in the HDI way below Bangladesh and India. Bangladesh has a HDI of 0.670, which is 24% higher than that of Pakistan. It is in the medium group of countries with the 129th rank. India has a HDI of 0.644 and is also in the medium group of countries, with the 134th ranking.

Pakistan’s performance in the HDI over the decades since 1990 has varied, with the decade, 2000 to 2010, showing the biggest cumulative increase in the index of 14.3%. The smallest increase of 8.1% has been witnessed in the last decade from 2010 to 2020. The best performance in increasing the index was witnessed in Bangladesh during the decade from 1990 to 2000, and from 2000 to 2010 in the case of India.

A comparison between Pakistan, India and Bangladesh reveals that in relative terms Pakistan does more poorly in the mean years of schooling indicator. It is 7.4 years in Bangladesh, 6.6 years in India and only 4.5 years in Pakistan. The smallest difference between Bangladesh and Pakistan is observed in the indicator related to life expectancy at birth. It is reported at 73.7 years in Bangladesh and at 66.4 years in Pakistan.

The global Human Development Report of the UNDP for 2023-24 also presents the latest estimates of the incidence of poverty in each country. Poverty has been measured either as multidimensional poverty or as the incidence of poverty below the international poverty line of 2017 PPP $ 2:15 per day.

There is an extraordinary finding from this report. While Pakistan does relatively poorly in relation to Bangladesh and India in the HDI as highlighted above, the surprise is that it has a lower incidence of poverty, when measured with respect to the international poverty line. It is reported at only 4.9% in Pakistan and significantly higher at 10.9% in India and 13.5% in Bangladesh. This type of sharp contradiction between related indicators needs to be clearly investigated by the UNDP.

The causes of the fall in human development of Pakistan from the medium to the low-level need to be investigated. The first question is what has been happening to the public outlay on education and health by the federal and provincial governments?

The PRSP progress reports by the federal Ministry of Finance give estimates of the total public expenditure on education and health respectively. There appears to have been a big decline in the level of spending on education as a % of the GDP. It was 2.1% of the GDP in 2017-18, which has fallen sharply to only 1.3% of the GDP in 2021-22. However, the level of health spending has risen from 1.1% of the GDP to 1.4% of the GDP.

The big fall in education expenditure has actually led to a decline of over 3% in the number of public schools and teachers during the last few years. This is revealed by the publication, Pakistan Education Statistics, of the Academy of Educational Planning of the federal Ministry of Education.

There is clearly a crisis in the education sector of Pakistan. Almost 40% of the children, aged 5 to 16 years, are out of school. The education system has failed to expand in line with the growth in the number of school-going children in the country.

The bulk of education expenditure is by provincial governments. The share in 2021-22 was 93%. Provincial governments have been unable to allocate larger funds to education for two reasons. First, the level of federal transfers to the provincial governments was 5.8% of the GDP in 2017-18, which has declined to 5.3% of the GDP in 2021-22. Second, the provincial governments have failed to launch their own vigorous fiscal effort. Their own-revenues have fallen from 1.4% of the GDP in 2017-18 to 1.1% of the GDP in 2021-22. Consequently, the fiscal space has diminished for at least maintaining the level of education spending as a % of the GDP, if not raising it.

A comparison of the level of public education spending of Pakistan with that in India and Bangladesh has been made with the World Development Indicators database of the World Bank. It was significantly higher in 2022 at 2% of the GDP and as high as 4.6% of the GDP in India.

Therefore, if Pakistan is to increase substantially the human capital endowment of the population to raise the potential for achieving a higher growth rate in coming years, it will have to invest and spend more on education. An immediate target is to take the level of public spending back to at least 2% of the GDP, financed by additional revenues generated through wide-ranging progressive taxation reforms and economy in other expenditures.

Dr Hafiz A Pasha, "Pakistan falls in human development," Business recorder. 2024-03-19.
Keywords: Economics , Human development , Education-Statistics , Education expenditure , Education , Pakistan , United Nations , New York , Bangladesh , India , UNDP , HDI , PRSP , GDP

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