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Thursday, February 15, 2024

Pakistan Eyes $250 Million World Bank Loan Aimed at Strengthening Human Capital

The World Bank is considering granting a $ 250m loan to Pakistan to help improve human capital. It is now up to Pakistan, to make the most out of it.

The World Bank is contemplating signing a  $250 million loan agreement with Pakistan to help it get rid of the danger of being excluded from future prosperity. Though Pakistan has focused on modernizing the infrastructure of the country, it is often blamed for under-investing in the human capital. This $ 250 million loan is going to play a critical role in transforming Pakistan’s human productivity rate.

This loan was basically put in place to help Pakistan improve its health and education systems which are essential for the accumulation of human capital. Also, it would enable Pakistan to work on civil registration and vital statistics (CRVS) so that it functions efficiently. This loan also plans to assist Pakistan in increasing the contribution of women and girls to economic productivity and federal safety nets would also be improved so that shocks are countered efficiently.

Pakistan ranks the lowest in the HDI index compared to the other South Asian countries. This HDI index was introduced by Indian economist and philosopher Amartya Sen. It is like a country’s report card that aims to evaluate the well being of the citizens residing there. There are three main dimensions that the HDI comprises; Life expectancy, education, the standard of living.

The health dimension is assessed by life expectancy at birth, the education dimension is assessed by the years of schooling for adults aged 25 years and the standard of living is measured by gross national income per capita.

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A country’s development cannot be equated with its economic growth. For a country to develop, its citizens should be productive and that is only possible if they are healthy, educated and enjoy a decent standard of living. Therefore, the World Bank is stressing on the need to invest in human capital.

Women’s economic empowerment is also necessary to boost productivity as it leads to more inclusive economic growth. As they say, when women work, economies grow.

The World Bank is committed to working with the government of Pakistan to help tackle the serious issue of human development. Their proposed operation is the first in a series of two Development Policy Credit (DPC) operations for the project known as ‘Securing Human Investments to Foster Transformation (Shift). This project is a segment of a package including resilient institutions for a sustainable economy, aimed at supporting medium-term structural reforms over the next three years focusing on fiscal management, growth and competitiveness, and human capital outcomes for productivity gains.

Read more: IMF & World Bank Laud Pakistan’s Efforts for Economic Growth & Stability

Currently, Pakistan ranks the lowest in the World Bank’s Human Capital Index. Countries like Singapore, South Korea, Japan, and Hong Kong topped the list, while Chad and South Sudan performed the worst. Pakistan would also continue to lag behind if the level of investment in human capital remains low. World Bank is ready to provide it with the opportunity to eradicate education and health deprivation and we hope Pakistan makes the most out of it.