94 Million People in Pakistan below Poverty Line

September 25, 2023

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In 2023, Pakistan is grappling with a poverty rate estimated at approximately 39%, primarily due to sluggish economic growth exacerbated by a series of recent shocks, including the COVID-19 pandemic, 2022 floods, and soaring food inflation. It means roughly 94 million People in the country are stuck in Poverty. The World Bank (WB) spotlighted these challenges in its recent program launch titled “Reforms for a Brighter Future: Time to Decide,” aiming to stimulate a constructive discourse on Pakistan’s pressing development policy issues.

The WB has expressed deep apprehension about Pakistan’s economic situation and calls for immediate actions to address the nation’s financial challenges. It recommends bold measures such as broadening the tax base to encompass previously untaxed sectors like agriculture and real estate. Simultaneously, it advocates substantial reductions in public expenditures. These actions are considered vital to achieving economic stability and a fiscal adjustment equivalent to more than 7% of Pakistan’s GDP.

The program seeks to engage diverse stakeholders in discussions regarding fundamental policy shifts necessary for sustainable, climate-resilient, and inclusive growth, along with poverty reduction. It includes the publication of draft discussion notes that will evolve based on stakeholder feedback.

The WB’s draft notes propose significant policy shifts:

Transitioning from underfunded, inefficient, and fragmented service delivery and social protection systems to coordinated, efficient, and adequately financed systems, with a focus on the most vulnerable.
Shifting from wasteful and inflexible public expenditures benefiting a few to prioritized spending on public services, infrastructure, and climate adaptation, benefiting the neediest populations.
Moving from a narrow, distortive, and inequitable tax system to a broad-based, efficient, progressive, and equitable system that generates revenue for human development, infrastructure, and climate adaptation.
Transitioning from a protected, stagnant, and unproductive economy with a large state presence to a dynamic open economy driven by private investment and exports.
Shifting from agriculture sector policies that trap farmers in low-value, low-productivity farming to a more market-driven, productive agricultural system resilient to climate change impacts.
Transitioning from energy sector policies driving high costs, environmental harm, and unsustainable debt accumulation to efficient, sustainable, and resilient energy generation and distribution, with accurate price signals, increased competition, private participation, and a cleaner energy mix.
Shifting from an inefficient, often ineffective, and susceptible public sector to accountable, efficient, and transparent government, including at the local level.

These proposed policy shifts are intended to break away from the current low-growth and anti-development status quo, setting a course for Pakistan to achieve sustainable development and poverty reduction.