Ayesha Saba

Pakistan’s focus on infrastructure and energy reforms will yield limited results without investing in human capital with experts stressing the need for a holistic approach that integrates macroeconomic stability with workforce development. Without addressing these gaps, Pakistan risks weakening its global competitiveness and long-term economic prospects.

During an interview with WealthPK, Dr Nadeemul Haque, former deputy chairman of the Planning Commission, said Pakistan’s journey toward sustainable economic growth is at a critical juncture, as the country’s competitiveness and productivity are being severely undermined by the neglect of human development.

The World Economic Forum’s Global Competitiveness Report consistently highlights the importance of human capital as a key driver of economic growth. However, Pakistan ranks alarmingly low in global human development indices, with literacy rates stagnating, healthcare access remaining inadequate, and skills gaps widening.

Mr Haque, who is also a former vice-chancellor of Pakistan Institute of Development Economics, argued that without a healthy, educated and skilled workforce, the country cannot compete in an increasingly knowledge-driven global economy. He emphasises that Pakistan’s growth model has historically been skewed toward short-term fixes, such as borrowing and consumption-led growth, rather than investing in the long-term potential of its people.

He added that while regional competitors such as Bangladesh and India have made strides in improving workforce skills through targeted investments in vocational training and technology-driven education, Pakistan lags behind. He argued that without a robust human capital strategy, the country risks falling further behind in global value chains, where efficiency and innovation dictate competitiveness.

Talking to WealthPK on condition of anonymity, an official from the National Productivity Organisation said the productivity gap is evident in Pakistan’s industrial sector. “Manufacturing firms struggle with inefficiencies due to a workforce that lacks technical expertise.”

He asserted that Pakistan’s economic strategy must shift from short-term fiscal adjustments to long-term productivity enhancement. He argued that the private sector alone cannot bridge the skill deficit and that a coordinated public-private approach is needed to revamp vocational training and technical education.

He maintained that beyond productivity, the lack of investment in human development exacerbates inequality, further constraining economic potential. “With a significant portion of the population unable to access quality education and healthcare, economic mobility remains limited.” The official stressed that this widening gap stifles entrepreneurship and innovation, which are crucial for sustained economic growth.

The UNDP’s 2023-24 Human Development Report ranks Pakistan 164th out of 193 countries, placing it in the “low human development” category alongside Afghanistan. Among SAARC nations, India (134), Bangladesh (129), Nepal (146), Bhutan (125), and the Maldives (87) fall into the “medium development” category,  while Sri Lanka (78) remains in the “high development” category despite an economic downturn.