akistan is facing an unprecedented economic crisis, with millions of urban middle-class people being pushed to the brink of poverty due to rocketing inflation and more than 30 percent devaluation of the rupee in 2022. This has led to more than 800,000 Pakistanis leaving the country in search of better economic prospects abroad.

With foreign reserves to pay for less than a month of imports, Pakistan is in urgent need of strong measures to secure its economic future. The current state of affairs can be attributed to the adoption of misguided policies and decisions spanning several decades.

A potential solution lies in the investment of more resources for the growth and development of human capital. Although the results may not be immediately apparent, the approach represents the only viable pathway towards achieving sustainable success and prosperity.

Human capital refers to the knowledge, skills and abilities of individuals that enable them to be productive members of a society. Investing in human capital means providing opportunities for education and training, improving health outcomes and creating an environment that allows individuals to reach their full potential.

Pakistan has long struggled with a significant trade deficit. The country spends more on imports than it earns through exports. Despite being a major exporter of labour, the remittances sent back by Pakistani workers abroad are squandered on unproductive ventures. Governments have failed to invest in key industries and sectors that could produce skilled labour and generate valuable foreign exchange.

Despite being a major cotton-producing country, Pakistan’s textile sector remains underdeveloped, lagging behind nations like Bangladesh. While there has been promising activity in the IT sector, it has yet to blossom into a full-fledged technology boom like that seen in the neighbouring India.

Pakistan’s population growth rate is among the highest in the world. A third of its 230 million inhabitants are under the age of 14. This rapid growth puts significant pressure on the country’s ability to create jobs and keep pace with demand.

Without a concerted effort to develop key industries and sectors, such as textiles and IT, and to invest in education and training to produce a skilled workforce, Pakistan risks falling further behind in the global marketplace.

In the near future, CPEC is expected to generate significant avenues of employment for the domestic labour force, especially after the establishment of the proposed Special Economic Zones (SEZs). However, as this development takes shape, the job requirements would become more demanding.

Accordingly, Pakistan needs to focus on improving the level of human capital in the economy so as to ensure that both the existing and the incoming labour force have the right skills to meet the growing technical requirements of the evolving nature of work.

Successive governments have provided lavish and unfunded fuel, water and power subsidies but have not invested in quality education, health provision, alternative energy and a strategy for population control. The tax base is among the narrowest in the world.

The HCII takes into account several factors, including years of schooling, health outcomes and survival rates. Pakistan’s low HCII score reflects the challenges the country faces in investing in human capital, particularly in education and health.

This lack of investment in human capital is reflected in Pakistan’s Human Capital Investment Index (HCII), which is a metric used to assess the investment that a country makes in its human capital, including education and health.

According to the World Bank, Pakistan’s HCII for 2020 was 0.39, indicating a low level of investment in human capital. The HCII takes into account several factors, including years of schooling, school quality, health outcomes and survival rates. Pakistan’s low HCII score reflects the challenges the country faces in investing in human capital, particularly in the areas of education and health.

One of the biggest challenges in Pakistan’s education sector is access to quality education. According to the Pakistan Education Statistics Report 2019-20, the literacy rate for Pakistan was 60 percent, with significant disparities between urban and rural areas. In addition, the report highlights that a significant number of children drop out of school due to poverty, child labour and other socio-economic factors.

According to the Pakistan Social and Living Standards Measurement Survey (PSLM) 2019-20, only 39 percent of children in the fifth grade could read a story in Urdu; only 44 percent could do a two-digit division problem. These statistics highlight the need for significant improvements in the quality of education in Pakistan.

In the health sector, Pakistan faces numerous challenges, including a high infant mortality rate and a low life expectancy. According to the Pakistan Demographic and Health Survey 2017-18, the infant mortality rate in Pakistan was 62 per 1,000 live births and the life expectancy at birth 67 years. The survey highlights significant disparities in health outcomes between urban and rural areas and between different provinces of the country.

Pakistan’s Human Capital Index (HCI) value of 0.41 is low in both absolute and relative terms. It is lower than the South Asian average of 0.48, Bangladesh’s 0.46 and Nepal’s 0.49.

To improve its HCII score, Pakistan needs to prioritise investments in education and healthcare. The quality of education and health outcomes needs to be improved and access to quality education and healthcare made more inclusive.

A strong emphasis should be placed on investing in early childhood development to ensure that children receive the necessary education and healthcare services from a young age.

Investing in human capital is crucial for the well-being of Pakistan’s citizens and the country’s economic growth. By investing in human capital, Pakistan can improve the quality of life of its people, increase productivity and contribute to sustainable development. Investing in health and education is not only necessary for Pakistan’s development but is also a fundamental human right enshrined in our constitution. This is also significant because of the SDGs.

The government should increase its budget allocations for education and health sectors and develop new and innovative policies and programmes to improve the HCII score. The private sector and international donors should also be encouraged to invest in the education and health sectors to ensure that Pakistan can achieve its human capital goals. By investing in human capital, Pakistan can improve the well-being of its citizens, increase economic growth and contribute to sustainable development.

The writer is a media and communications  professional. He has been working in the development sector.  He tweets @Idrees_Haider