Pakistan's progress on reducing poverty hurt by climate change, weak economy

Nation walking a tightrope amid fiscal strain, but aid alone can't resolve structural problems

- Ashraf Khan

Pakistan's hard-won poverty reductions are at risk of slipping away, and instability looms as costly climate disasters and a weak economy are impoverishing more people, with little, if any, respite in sight.

The deteriorating economic picture is a major concern for the country's 250 million people, of whom 67 per cent are under the age of 30, according to government figures. And the economy has become dependent on aid and loans, including from the International Monetary Fund (IMF).

Poor governance marked by deep-rooted corruption has weakened infrastructure, including electricity generation and the power grid, among other key systems. Prolonged outages disrupt civic, commercial and industrial activity, keeping economic growth minimal. In many urban areas, electricity bills exceed house rents, triggering frequent public protests.

After steadily falling from 64.3 per cent in 2001-2002 to 21.9 per cent in 2018-2019, Pakistan's national poverty rate began rising again in 2020 and has now climbed to a projected 25.3 per cent in 2023-2024, according to the World Bank.

It cited compounding shocks including the Covid-19 pandemic, runaway inflation, devastating floods and wider economic stress.

"A pressure-cooker situation is emerging, and unrest is inevitable," said Dr Kaiser Bengali, a leading Pakistani economist. "The exact form it will take is hard to predict, but risks of social tension and political instability are growing."

That is a concern, given that Pakistan is a nuclear-armed nation that recently fought a border war with India.

In its mineral-rich yet least developed western province of Balochistan, for instance, Pakistan has long faced militancy, with ethnic Baloch insurgents led by the outlawed Balochistan Liberation Army and other separatist groups - demanding greater autonomy, accusing Islamabad of political and economic domination.