The Elixir for Pakistan’s Ailing Economy By Dr Syed Asim Ali Bukhari

The Elixir for Pakistan’s Ailing Economy By Dr Syed Asim Ali Bukhari

The notion of Sustainability has been developed in congruence with the principles of Ecological Balance where a stable ecosystem is created through the harmonious co-existence within species and with their environment. Similarly, sustainable development puts forward the concept of a harmonious balance in a country’s economic system through the simultaneous attainment of social, environmental, and economic gains. Growth which negatively impacts any one of the three pillars cannot be considered sustainable growth and thus cannot lead towards the creation of a Just ecosystem. As the global corridors resonate with the pledges and speeches of the world leaders made during COP28, the primary question arises as to whether the planned global green transition also checks the box of a socially sustainable transition, especially for developing nations like Pakistan.

In many developed countries, a green transition is already taking place, creating jobs and economic opportunities. However, a transition on the scale necessary to combat and control climate change also carries a significant social cost in the form of losses of jobs, and livelihoods, and a decrease in public and private revenues in many areas that may be considered environmentally unsustainable. Bedazzled by the promises of the green transition many of us conveniently forget about the social cost of this dynamic transition. For developing countries, the social dimension may become a key obstacle in the path towards net zero. This in no way undermines the importance of a green transition rather it opens the doors towards the more evolved and dynamic concept of Just Green transition. Developing countries like Pakistan need a “Just Green Transition” to simultaneously combat threats like climate change, rising food insecurity & inflation, climateflation, fossilflation, and the resultant socio-economic challenges.

As the global corridors resonate with the pledges and speeches of the world leaders made during COP28, the primary question arises as to whether the planned global green transition checks the box of a socially sustainable transition.

The International Labor Organization (ILO) defines a Just Green Transition as “greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind”. In the aftermath of COP28, we are frequently hearing and reading about why it has become critical to phase out the use of fossil fuels and carbon-intensive technologies. Although correct, this does not mean the closure of businesses since that will negate the environmental gain with the social cost. Rather the main focus of Just Green Transition is to support workers and communities affected by the phasing out of polluting activities through the creation of green jobs, training & skill development, financial support, green business facilitation, and support to Small and Medium Enterprises (SMEs) effected by the green transition. With transparent planning and the active participation of a broad range of stakeholders, governments can minimize the fear, opposition, and inter-community and generational conflict that may upend the move away from fossil fuels and other environmentally adverse activities that are warming our planet, such as deforestation and wasteful production practices.

Pakistan’s banking industry can play a pivotal role by leading the country through the Just Green Transition. The banks can initiate a green revolution across all economic sectors through sustainable & climate financing. Through the provision of sustainable financing with low interest rates, the banking industry may create a balance between the attainment of economic, environmental, and social sustainability during the green transition. The provision of green & sustainable loans for the renewable energy sector is a primary example of the Just Energy Transition. Based on the ideology of the Just Green Transition, the banking industry may provide green loans to various economic sectors including sustainable & climate-smart agriculture, the green construction industry, the sustainable textile industry, e-vehicles manufacturing & assembling, green manufacturing, and eco-tourism. Take the case of smog in Punjab, the government imposes a ban on brick kilns during the smog season in an attempt to combat air pollution. However, in line with the ideology of a Just Green Transition, The Bank of Punjab launched a Green Loan Scheme for shifting traditional brick kilns to zigzag technology. This Green & Sustainable initiative by The Bank of Punjab avoided the social cost that was being created by shutting down a primary economic sector and in turn developed a green & sustainable economic sector. Similarly, under the ideology of Sustainable, Green & Clean Pakistan, The Bank of Punjab has launched several different Green and sustainable Loan Schemes like Shamsi Tawanai, e-Business Qarza, Women Entrepreneurs, Special Persons, and Storage of Agricultural Produce. Such Green & Sustainable financing by the banking industry will result in the creation of a robust green job market in Pakistan that will positively contribute to the sustainable development of the country.

It is pertinent to note that a Just Green Transition will not just help advance climate action in Pakistan but also play an important role in the attainment of the United Nations – Sustainable Development Goals (UN-SDGs) 2030. Through the creation of green economic sectors and connected green jobs, UN-SDGs related to affordable and clean energy, decent work and economic growth, reduced inequalities, and responsible production and consumption may be met. A Just Green Transition will enable Pakistan to combat the many forms of inflation plaguing the country’s economy including food inflation, climateflation, and fossilflation. Just Green transition is a vision that is impossible to achieve without the holistic collaboration between all the concerned stakeholders of society, meaningful public-private partnerships, and a cognitive shift towards environmental consciousness within the society. Let us start by applying the concept of Climate Justice to our internal policymaking before asking for it from the outside world. It is the responsibility of the concerned stakeholders to strategically plan and execute a green transition that leaves no one behind and creates vibrant horizons for inclusive economic growth in Pakistan.

The writer holds a PhD in Green Banking and is working as SVP/Unit Head – ESG, Policy & Product Program Division in The Bank of Punjab. He can be contacted at


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