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Pakistan’s future: Investment in human capital

Investment in human capital

With each passing day, Pakistan becomes an even more crucial player in world affairs. Home of the world’s second-largest Muslim population, location of perhaps the planet’s most dangerous borderlands, and armed with nuclear weapons, this South Asian nation will go a long way towards determining what the world looks like ten years from now. 

The future of Pakistan presents and evaluates several scenarios for how the country will develop, evolve, and act in the near future, as well as the geopolitical implications of each. History reveals the fact that, the future of any nation will not determine by its physical and defense power but by its human power; the ultimate source behind every action. The source behind productivity and growth of the economy where the role of the state is just to utilize this limited physical and human resource wisely for attaining the economic and social well-being of its people.

A nation’s output of goods and services, and thus its capacity to living standards, is limited by its resources and by the state of technical knowledge regarding how to utilize them. The traditional triumvirate of resources-land, labor, and capital-only capital has been thought of generally as subject to significant and appropriate social control. The land is given by nature, while population and hence the labor supply have been considered to be determined by forces outside the economic system The state of technological knowledge, too, has been considered determined largely outside the economic system, except to the extent that resources were directed toward research and development. Moreover, knowledge is significant largely to the extent that it becomes embodied in resources in the form of man-made capital.

Economic, social and environmental

Investment in human capital is one of the basic components of development and one of the fundamental rights enjoyed by human beings. It is considered the core of the sustainable development process. This investment is linked to a set of direct and indirect personal and social gains that make it essential in achieving all three dimensions of sustainable development: economic, social and environmental.

Healthy people and people who have access to quality education are better able to contribute to their communities, as they are more able to work, produce, innovate, tackle crises, or solve or adapt to problems compared to people who are less healthy and have not had access to quality education.

In addition, they are more aware of and more like to follow the sustainable production and consumption patterns that are needed to address environmental and climate challenges. They are also able to achieve higher levels of income, enabling them to break out of the cycle of poverty and achieve an acceptable standard of living. Investment in human capital has therefore been a key focus for decision-makers around the world.

Development goals

The global interest in the development of human capital and investment in health, education and adequate housing was realized in the 2030 Agenda for Sustainable Development launched by the United Nations in September 2015. Two of the associated Sustainable Development Goals (SDGs) are devoted to tackling the various dimensions related to health and education: Goal 3 is to “ensure healthy lives and promote well-being for all at all ages,” and Goal 4 is to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.”

In addition, one of the targets of Goal 11, to “make cities and human settlements inclusive, safe, resilient and sustainable”, is to ensure universal access to adequate, safe and affordable housing and basic services, and to upgrade informal settlements by 2030.

Investing in human capital brings about a set of personal and social benefits or gains. Personal returns are the set of benefits that individuals achieve from higher levels of education and health in terms of their higher level of productivity in the labor market and their income level. Social returns are related to the ability of societies that prioritize investment in human capital to achieve high and sustainable economic growth and equitable distribution of income, contributing to reducing poverty and achieving the economic, social and environmental goals of the sustainable development process. Since the benefits of investing in human capital are realized only in the future, working on the acquisition of human capabilities is a form of investment.


In underdeveloped countries like Pakistan, a huge proportion of the population is residing below the national poverty line. It is commonly said that through economic growth, we can curtail unemployment and poverty but the situation is different in the case of Pakistan. In Pakistan, we cannot reduce the poverty through only economic growth but it requires harmonized improvement in all indicators of the economy where only investment in people accelerates the pace of growth, generates development and gives them the ability to get rid of poverty which requires education and health facilities as well as some measures of income security but unfortunately, in Pakistan, it is reported that, a child born in Pakistan today is already likely to only achieve 41 percent of his or her human capital potential which is very low and alarming so, it is the high time to restructure the policies towards the actual growth and development where nations achieve high standings not at the expense of its population but through the well-being of every individual and society so, it is recommended that,

Therefore, it is recommended that, investment in human capital is the only route that leads to the economic prosperity of Pakistan.

The author is a MD IRP/Faculty department of H&SS, Bahria University Karachi

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