World Bank calls for people-centered reforms

September 23, 2025 (MLN): The World Bank (WB), in a report released Tuesday drawing on 25 years of household survey data in Pakistan, emphasized the urgent need for bold, sustained, and people-centered reforms to reduce poverty, strengthen resilience and safeguard vulnerable groups.

The report, titled “Reclaiming Momentum Towards Prosperity: Pakistan’s Poverty, Equity and Resilience Assessment”, marks the first comprehensive review of poverty and welfare trends in the country since the early 2000s.

It noted that while national poverty fell consistently from 64.3% in 2001-02 to 21.9% in 2018-19, the trend reversed in 2020 due to compounding shocks such as COVID-19, inflation, floods and macroeconomic stress, while also highlighting that Pakistan’s consumption-driven growth model has reached its limits.

The assessment, based on multiple rounds of the Household Integrated Economic Survey (HIES), national poverty benchmarks, global thresholds updated in June 2025 and additional geospatial and administrative data, revealed that recent estimates beyond 2018-19 relied on projections through micro-simulation models.

It added that updated poverty figures would become available once the results of the 2024-25 HIES are released.

Stressing the importance of sustaining progress, WB Country Director for Pakistan Bolormaa Amgaabazar emphasized that Pakistan must protect its hard-won poverty gains while pushing forward reforms that expand opportunities, particularly for women and youth.

She noted that investments in people and services, resilience-building against shocks, sound fiscal management and stronger data systems will be vital for reviving the poverty reduction trajectory.

According to the report, much of Pakistan’s past poverty reduction was driven by non-agricultural labor income as households shifted away from farming to service sector jobs.

However, the transition has remained shallow, with low productivity and limited diversification constraining growth.

More than 85% of jobs remain informal, while women and young people continue to be largely excluded from the workforce.

The study further highlighted human capital gaps, pointing out that nearly 40% of children are stunted, one in four primary-school-aged children is out of school, and 75% of those attending cannot read a simple story by the end of primary education.

Service delivery gaps are also stark, as only half of households had access to safely managed drinking water in 2018, while 31 percent lacked safe sanitation.

The report also drew attention to persistent regional disparities, with rural poverty levels remaining more than twice as high as urban poverty and many districts that lagged decades ago continuing to do so today.

Unplanned urbanization has compounded these challenges by creating crowded settlements with poor living standards, described as “sterile agglomeration.”

Christina Wieser, Senior Economist and lead author of the report, warned that Pakistan’s progress remains threatened by structural vulnerabilities and stressed that reforms expanding access to quality services, protecting households from shocks, and creating better jobs for the poorest segments are crucial to breaking the cycle of poverty and ensuring inclusive, durable growth.

In conclusion, the report argued that restoring momentum in poverty reduction will require comprehensive reforms that strengthen human capital, improve service delivery, build resilience to shocks, adopt progressive fiscal policies by phasing out inefficient subsidies and prioritizing resources for the poorest, and establish stronger data systems to guide policy decisions and monitor results.

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