Investing in People

FOR too long now, economic orthodoxy has focused on macroeconomic fundamentals to assess the health of an economy.

So when reserves rise or growth resumes, celebratory pronouncements pour forth without much thought as to who exactly is reaping the benefits.

But for people to benefit from an improvement in macroeconomic conditions, greater measures need to be taken to ensure broader participation in the institutions that dominate the economy, and to ensure that a fair share of the benefits are reaching those who need it the most in the form of strengthened institutions for delivery of health and educational outcomes.

This is why the words of the World Bank president, who just concluded a two-day visit to Pakistan, are welcome.

He acknowledged the growth story being peddled by the government, but added that he “would encourage the country to be more ambitious with reforming its economy so that more people are lifted out of poverty more quickly, and prosperity is more widely shared”.

As part of the reforms to lift people out of poverty, and ensure prosperity is “more widely shared”, the World Bank has ramped up its engagement with programmes that seek to reach those traditionally neglected by the macroeconomic growth process, with some emphasis on financial inclusion.

Three sectors are notoriously underdeveloped in their capacity to reach and empower the poor: the financial sector and health and educational institutions. In each of these, Pakistan has some of the most dismal realities compared to most other countries.

In the financial sector, for instance, only 13pc of Pakistani adults have a bank account, with only 5pc of women included in the financial sector, compared to a South Asian average of 37pc.

Likewise in education, Pakistan has one of the highest numbers of children out of school, and almost 20pc of the population was undernourished in 2012 when the last figures were released — sadly, almost 32pc of children were also undernourished.

These are sobering statistics and if they are not corrected, then we are surely laying the groundwork for a human catastrophe for the next generation.

The government’s efforts to promote financial inclusion through the Universal Financial Access Initiative launched during the World Bank president’s visit is a welcome development, but the bulk of the work to rectify the dismal state of the human condition in the country lies ahead of us. The time to start work on it is now.

Published in Dawn, February 12th, 2016

Source: http://www.dawn.com/news/1238897/investing-in-people