‘Govt faces challenges to balance stability with human capital investments’

ISLAMABAD: The government is facing challenges of balancing adequate distribution of financial resources towards macroeconomic stability and human capital investments, a minister said on Friday.

Minister for Economic Affairs Khusro Bakhtyar said limited fiscal space along with the federation's governance structure further complicates the situation.

“The government’s commitment to build human capital remained unchanged despite these challenges,” Bakhtyar said during a virtual session by the World Bank.

The minister represented Pakistan in a ministerial conclave: “Investing in Human Capital in the Time of Covid-19”, organised on the sideline of joint 2020-Annual Meetings of the World Bank Group and International Monetary Fund.

The minister said the government has initiated a set of programs including insurance, poverty alleviation and education reforms to provide the foundation for a stronger human capital base. It is implementing the much-needed structural reforms in partnership with all the federating units and in alignment with the sustainable development goals.

“Pakistan has become one of the first early adopters of the human capital project,” he said.

The objective of the conclave was to bring together ministers of finance and planning from the 78 human capital project countries and selected development partners to share experiences and inspire further action on mobilising and safeguarding resources to protect and invest in people amid the pandemic, prioritising expenditures, generating efficiencies, and adopting innovative solutions for better and more equitable human capital outcomes within a limited fiscal space, and deploying innovative solutions to protect human capital outcomes and close equity.

The World Bank Group Vice President Mamta Murthi, chaired the conclave. World Bank Group President David Malpass delivered the opening remarks at the occasion.

Bakhtyar said Pakistan is a country of 213 million people, with over 63 percent of the population below 25 years of age. This makes the country distinct and unique.

However, periodic macroeconomic crises and a low human capital basis have constrained the country's growth prospects and undermined sustainable development. “Investment in the people can reap dividends that not only impact lives but also provide a sustainable path to progress,” he said. “Good governance and efficient resource allocation is a cornerstone of the agenda. However, the COVID-19 pandemic will have significant negative impacts on the economy.”

The government launched an economic stimulus package of Rs1.2 trillion to mitigate the adverse impacts of the corona pandemic on various sectors of the economy. Pakistan’s response to combat COVID-19 crisis remains strong, robust and is recognised by the international community.