The lost human capital

A World Bank report provides a valuable insight into gaps in various sectors, social groups and geographic locations

The lost human capital


akistan Human Capital Review, released by the World Bank, depicts a gloomy picture of Pakistan in various areas of human capital development. One of the key findings is that Pakistan’s Human Capital Index (HCI) value of 0.41 is lower than the South Asian average of 0.48; Bangladesh stands at 0.46 and Nepal at 0.49.

The state of human capital development in Pakistan is comparable to that in Sub-Saharan Africa, which has an average HCI value of 0.40. This sombre fact is a wakeup call for policy makers, planners and political decision-makers in Pakistan. The World Bank report provides a valuable insight into gaps in various sectors, social groups and geographic locations. Some of the weak links are discussed below.


According to the report, an estimated 20.3 million school-age children are out of school in Pakistan. Even worse is the learning poverty rate (the percentage of children unable to read and understand a short age-appropriate text by age 10). It stood at 75 percent before the Covid-19 pandemic. It is likely to have deteriorated further following the last year’s floods that kept millions of students out of school for several months.

The urban-rural gap is also evident. In 2018-19 some 35 percent of Pakistan’s rural children (15 million) in the 5-16 age group were out of school, compared with 20 percent (4.4 million) of urban children.


Another area of lacklustre performance is health. About 7 percent of newborns in Pakistan die before their fifth birthday. Child survival rates until age of five are far below the South Asia regional average (96 percent) and similar to the 93 percent average for Sub-Saharan Africa. Among the surviving children, around 40 percent under the age of five are stunted and 17 percent are wasted.

Geographic disparities:

Human capital development also varies across provinces. HCI values by province suggest wide inequality of outcomes. The worst performing province, Balochistan (0.32), is at the global bottom, the same level as Niger. Sindh, with an HCI value of 0.36, is comparable to Nigeria and Sierra Leone (0.36). Khyber Pakhtunkhwa, with an HCI value of 0.39, is comparable to Burundi and Tanzania.

The HCI value of the best-performing province in Pakistan, the Punjab (0.42) is comparable to that of Senegal (0.42) and just below that of South Africa (0.43). Northern Punjab has the highest HCI value (about 0.50). Rural Sindh and Balochistan are home to districts with some of Pakistan’s lowest HCI values (about 0.25).

In terms of schooling, Khyber Pakhtunkhwa and the Punjab are at the expected level for Pakistan’s economic development, with nine years of formal schooling whereas Sindh and Balochistan averaging around 7.7 and 5.4 years of schooling, respectively.

Three-fourths (75 percent) of Pakistani children cannot comprehend a simple paragraph by age 10. Regional inequities mean even higher rates in depressed areas. Learning poverty rates are approximately 50 percent in the Punjab and soar to 80 percent in Balochistan. Among out of school children, the Punjab has the largest number (6.6 million) and share (35 percent). Sindh, with half of Punjab’s population, has almost the same number (32 percent, 6.5 million).

With only 89 percent of children surviving until their fifth birthday, Balochistan is at the very bottom globally. In Balochistan and Sindh almost half of the children under five years of age are stunted. In the Punjab, one-third of children are stunted. In Khyber Pakhtunkhwa, 48 percent of children under five are stunted. Stunting rates range from 33 percent in Islamabad and 36 percent in the Punjab and over 46 percent in Balochistan.

Human capital is the cornerstone of economic growth and social wellbeing of any country. It is the real asset for societies that sets the trajectory of economic gains.

Gender gap:

There is a wide gender gap. The country has a very low female labour force participation rate of 23 percent. Having three out of four women out of labour market, the country is deprived of a vital labour force. About 60 percent of working-age women are not in employment, education or training compared to 6 percent of working-age men.

This gap is also evident in primary education where about 23 percent of boys and 28 percent of girls leave the school system at this stage. The trend has worsened for girls in recent years. In 1996, 22 percent of boys and 33 percent of girls reached Grade 10, whereas in 2016, 30 percent of boys and 29 percent of girls reached grade 10. Only one out of five women has completed secondary education.

Public investment:

Pakistan’s public investment of about 2.5 percent of GDP in education and 0.9 percent on health is much lower than the global average. Pakistan spends about 0.6 percent of the GDP on social safety nets, compared with the global average of 1.5 percent. Pakistan’s total investment in health is low in international comparison, at 3.2 percent of GDP in 2018, against the global average of 6.5 percent and the average for lower-middle-income countries of 4.1 percent. Pakistan’s annual investment in education, health and social protection has grown in absolute terms but not kept pace with population growth.

Haves and have-nots:

Rich enjoy better lives and, hence, have better chances to produce human capital. 44 percent of children in the poorest quintile are not stunted versus more than three-quarters (78 percent) in the richest. The difference between the rich and the poor is most pronounced in expected years of schooling, with the richest quintile spending twice as long in school (12.7 years) compared with the poorest (6.4 years). Households in the bottom consumption quintile in Pakistan spend Rs 196 per month on education whereas those in the top quintile spend Rs 3,728.

Job market:

The ultimate gain of human capital is translated into an able and efficient workforce. Appropriateness and quality of education are pivotal to produce a workforce with relevant skill sets. The lack of relevance has resulted in greater unemployment for men and women with at least a postsecondary degree – more than 21 percent – than for those with less than primary education – 4 percent.

Unemployment and under-employment among youth (age 15–24) are higher in urban than rural areas. The job market is not structured on modern lines and not documented. Approximately 95 percent of wage workers do not have a formal contract.

Human capital is the cornerstone of economic growth and social wellbeing of any country. It is the real asset for societies that sets the trajectory of economic gain. The report reads, “if Pakistan continues on its current trajectory in human capital development, its GDP per capita would grow overall by a mere 18 percent through 2047, the 100th anniversary of its founding. If Pakistan can boost human capital investments and its HCI value to the level of its peers, per capita GDP could grow by 32 percent. But if Pakistan improves both its human capital and its use of human capital, GDP per capita could rise by 144 percent, eight times more than under business as usual.”

This indicates that Pakistan has a huge untapped potential that could be realised through focused efforts and targeted initiatives.

The writer is a development sector professional. He can be reached at

The lost human capital