Pakistan’s socioeconomic priorities need to change to adapt to the modern economic structures. The country missed the chance to grow in the past thirty years and to shift gears, we must change our thinking. Something similar is emphasized by the World Bank President in his recent meeting with the newly appointed Pakistan Finance Minister.
Our FM Aurangzeb recently said in a conference that WB President Ajay Banga in a recent discussion with him has emphasized that Pakistan should focus on three priority areas- climate change, digitization of the economy, and human development. The more we talk about these areas, the less it is.
The biggest challenge for Pakistan is to attract investment (G-to-G, private and donor funding) to finance a healthy current account deficit which is imperative for growth. Climate change financing is one low-hanging fruit. Pakistan is one of the worst countries impacted by climate change (for example growing frequency of floods and deteriorating air quality) while its contribution to greenhouse gas emission is far less (for example our energy mix has a higher proportion of renewables). The country should attract investment in climate-resilient infrastructure, and that investment should help in attaining growth and generate employment.
The second priority of digitization of the economy is utmost needed to document the economy and to unleash the benefit of developing efficient supply chains through formal financing and attaining potential of taxation. Pakistan’s informal economy has been on a steep rise over the past decade, and in response, the policymakers have kept increasing rates both for income and sales tax. The higher the tax rate, the more the incentive to shirk. Digitization of the economy is important to solve the puzzle of enhancing the base, and the value created by digitizing the value chain would help improve the taxed income. That could in turn help lower the rates.
Success in the first two priority areas would naturally help in improving human development. The country has a very high concentration of young population. This could become a dividend if its potential is realized. However, otherwise, this could become a bigger liability too in decades to come, if business as usual continues.
The first element of human development is to have healthy children and youth. And to attain that improvement in nutrition is of utmost importance. The finance minister did show a resolve to reduce stunting and improve nutrition intake, and he emphasized improving health through better dairy product intake.
It’s a well-established fact that Pakistan is facing a malnutrition crisis.137 out of 1,000 infants die at birth which should be under 5. Then 40 percent of children are underweight and over half are affected by stunting.
Malnutrition is one of the biggest threats to our population and national productivity. According to the School Age Children Health and Nutrition Survey (SCANS) 2020, over 90 percent of kids have inadequate amounts of iron in their diet which is one the highest in the world.
This could lead to consequences such as impaired growth, frequent illness, fatigue, shortness of breath, and a reduced ability to learn. This not only leads to absence from schools but also hinders the physical and cognitive development of children causing a hurdle in their progress towards a successful future. One study estimates that the loss in income due to micronutrient deficiencies is about US$ 3 Billion annually or 1.33 percent of GDP.
To address this, children must be given good sources of iron e.g., organ meat, dark green leafy vegetables, etc., and products fortified with iron. Promoting nutritional solutions to ensure nutrient adequacy for children’s development is key. Among solutions to prevent the risk of malnutrition, food fortification is generally recognized as a sustainable long-term approach that is easy to implement.
Fortified dairy products and nutrition solutions can be an effective vehicle to improve the nutritional quality of diets and thus support normal healthy growth and development in children. Research communities throughout the world are working on enhancing the nutritional value of food and food ingredients.
Thus, Pakistan should focus on improving nutrition as this is one of the basic ingredients for better human development. Fortification can help a long way in this, as inadequate micronutrient intakes are prevalent in most Pakistani school children (more than 80 percent of children are below calcium, iron, zinc, and vitamin A recommended intakes, and the list goes on).
Pakistan is a poor country and lack of affordability is the biggest impediment to having a balanced nutritious diet. Thus, affordable nutrition is the way to go and should be among the top priorities for achieving medium-term growth.
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