ISLAMABAD: Low investment in human capital couldn’t allow the economy to keep up with the growth pace, planning minister said on Monday, underscoring needs of increased spending on education and health sectors.
“Less investment in the human capital has impeded sustainability of the economic growth,” the Minister for Planning Development and Reform Khusro Bakhtyar said. “Countries with higher investment in human capital have sustained higher economic growth for longer period.”
Bakhtyar was addressing the launch of a report ‘Pakistan@100 and the Human Capital Summit’ organised by the World Bank.
The country clinched a decade-high growth of 5.8 percent in the last fiscal year, but the real GDP growth rates are projected to scale down in years to come as the government has to make economic readjustments to reintroduce fiscal discipline. Government has to revise the growth projection down to 4.1 percent for the current fiscal year, but it is projected to ratchet up in the following fiscal years.
The growth forecast is line with the projections of international institutions that counted weak external account as key risks to growth outlook. Global ratings agencies Moody’s and Fitch projected growth to slow down to 4.3 to 4.4 percent this year.
Planning minister said spending on education has increased to 2.5 percent of GDP from 1.8 percent of GDP and to 0.9 percent on health sector in the last one decade.
“We also expanded the scope of cooperation with China by including socioeconomic development under CPEC (China-Pakistan Economic Corridor) and are in process of remodeling poverty alleviation program to enable the recipients to graduate by self-employment through skill development,” the minister said.
Bakhtyar said the present government is fast-tracking the transformation of social sector and human capital development to capitalise on opportunities created through fourth industrial revolution and digitalisation.
“The government’s aim is to enhance job creating ability of the economy and increase skill set in the country,” he added. “In order to achieve the goals of 12th five- year plan structural reforms are critical… we have to transform the way government operates by doing necessary reforms.”
Bakhtyar said the country has the potential to increase investment to 25 to 30 percent of GDP and grow into a $2 trillion economy in a couple of decades. “We see beyond brick and mortar and heading in the right direction and committed to delivering in our promises.”
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