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THE new World Bank report, Reclaiming Momentum Towards Prosperity, is a sobering reminder that Pakistan’s current growth and development model is no longer fit to sustain reduction in poverty and inequality.
The model, which supported initial gains in poverty alleviation before running aground, has already eroded two decades of progress as poverty trends reversed over the past three years. A new development trajectory is needed, one which prioritises inclusive growth, equity and sustained investment in human capital, the WB said.
The bank also called for the overhaul of the present development model at the report’s launch in Islamabad recently. “Reforms that expand access to quality services, protect households from shocks and create better jobs — especially for the bottom 40pc — are essential to break cycles of poverty and deliver durable, inclusive growth,” it said.
Poverty, which had declined from 64.3pc in 2001-02 to 21.9pc in 2018-19, has been climbing again.
It rose to 24.7pc in 2019-20, dipped briefly to 18.3pc in 2021-22, and then surged to 25.3pc in 2023-24 — a seven percentage point increase in just two years. If confirmed by the Household Integrated Economic Survey 2023-24, currently underway, it would represent a significant reversal.
The WB rightly identifies multiple shocks — Covid-19, inflation, floods, political instability, and macroeconomic stress, resulting in low and volatile growth — as important triggers. But it is equally clear that the deeper problem lies in a consumption-driven growth model, which has failed to deliver resilience, jobs or equitable progress. That “progress in poverty reduction is threatened by structural vulnerabilities” is a warning about the fragility of a system relying too heavily on unsustainable growth patterns.
The report acknowledges that Pakistan’s social protection programmes have shielded many families from destitution. But, as it makes clear, this cannot replace transformative reforms to remedy structural imbalances, improve service delivery and build resilience for long-term gains.
As rightly pointed out, education and health spending have hardly closed inequality gaps. Overreliance on indirect taxation continues to depress household incomes, hitting the poor the hardest while sparing the elites.
Structural imbalances — from elite capture and regressive fiscal policies to weak public service delivery and labour market constraints — will keep most Pakistanis trapped in poverty. Abysmal human development indicators make the picture even bleaker. Nearly 40pc of children are stunted. One in four primary school-age children is out of school, and three out of four who attend cannot write or read after five years of education.
Half the population lack safe drinking water; nearly a third lack safe sanitation. Over 85pc of jobs are informal, offering little security or upward mobility. Women and youth remain largely excluded from the workforce. How can a country expect to build a prosperous future on such shaky foundations?
Published in Dawn, September 26th, 2025
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