TAHIR AMIN

ISLAMABAD: The World Bank has committed $300 million to support livelihood in Pakistan including $200 million for the Punjab Human Capital Investment Project that will strengthen health services and social protection for poor and vulnerable households in selected districts of Punjab.

According to the Punjab Human Capital Investment Project documents, the total cost of the project is $330 million where International Development Association (IDA), the concessional financing arm of the World Bank, financing is $200 million and the remaining $130 million is to be financed by the provincial government.

Pakistan is accelerating investments in healthcare and education to prepare children to reach their productive potential and generate wealth, says a WB official statement.

“Pakistan’s strongest asset is its people. Investing at the start of life, especially for girls and women, is essential to empower citizens to thrive,” said Illango Patchamuthu, World Bank Country Director for Pakistan.

“This project will help the Punjab province to invest in early years now, to create a productive workforce for the future.”

The project will increase the quality and uptake of health services, including maternal care, immunizations, and childbirths attended by qualified professionals, reaching up to 18 million people.

It will provide early childhood education and skills training for young parents and will improve systems to more efficiently manage economic and social inclusion programmes.

“There are substantial financial and non-financial barriers to access quality health services, such as expenses to visit health facilities and the burden of household chores and childcare, especially among women in poor households,” said Yoonyoung Cho, Task Team Leader for the project.

“The first 1,000 days are the most critical time in a child’s development, thus prioritizing maternal and natal care is integral to their productive capacity and strengthening human capital accumulation in Pakistan.”

As per the project documents Pakistan’s most abundant asset is human capital, but the country has not been effectively investing in or utilizing this significant resource. The country’s demographic transition, characterized by the young, working-age population growing faster than the overall population, could also help create an environment conducive to economic growth and demographic dividends. However, as highlighted by the latest Human Capital Index (HCI), released by the World Bank in 2018, an average girl born in Pakistan today will have realized only 40 percent of her overall human capital potential by the time she turns 18, if no changes in human capital accumulation take place. The country’s high stunting rate (which was 37.6 percent in 2017, despite some progress) among children under five, and poor education and learning outcomes, also highlight the challenging human capital outcomes in the country.

Pakistan’s low human capital indicators are in large part due to lagging outcomes among poor and vulnerable households and are associated with weak female empowerment. While primary school attendance is over 90 percent in the richest quintile, less than half of children in the poorest quintile attend primary school.

Weak female empowerment, manifested in a large gender gap in education, employment, and earnings, also has significant implications on investment in children’s human capital, given the strong association between mother’s education and household income and children’s human capital outcomes.

Women’s participation rate in earnings generating activities is strikingly low: female labor force participation in 2017 is low (28 percent in rural areas and 11 percent in urban areas); and among the employed the share of unpaid work is high (60 percent in rural areas and 15 percent in urban areas).

The macro-economic and fiscal crisis that the country is currently facing adds further challenges to poverty reduction and human capital accumulation in Pakistan. Pakistan has been experiencing repeated boom-bust patterns and fiscal crises due to some structural factors.

The latest economic downturn accompanied by growing current account deficit and falling foreign currency reserves led the Pakistani government to accumulate bilateral short-term debt and macroeconomic imbalances.

As part of its stabilizing efforts, the government signed a $6 billion bailout programme offered by the International Monetary Fund (IMF) through a 39-month Extended Fund Facility in July 2019.

The IMF programme and its accompanying measures could expose a number of vulnerable households to the risk of falling back into poverty putting them at risk of reversing the gains.

Punjab is home to about 48 percent of the country’s poor (estimated at 23 million in 2017), and inequality remains a challenge in the province.

A large proportion of Punjab’s population is clustered around the poverty line and thus remains vulnerable to poverty, especially during shocks, whether environmental (e.g., floods and climate-change-induced disasters) or economic (e.g., the recent debt crisis). Punjab’s inequality is not only in incomes but also in opportunities for human capital investment.

The World Bank also approved $85 million in grants and credits from IDA18 Regional Sub-Window for Refugees and Host Communities and $15 million from the Multi-Donor Trust Fund to the federal government and the Government of Balochistan to support the strengthening of institutions, delivery of services, and support for livelihoods and enterprise development.