Rescuing Pakistan’s economy

Once a rising economic power in South Asia, Pakistan now finds itself at the bottom of the regional ladder. Fifty years ago, the average Pakistani had a higher income than his South Asian peers. Today, he earns about half as much. What went wrong, and what must be done to turn things around? The roots of Pakistan’s economic troubles go back decades. A booming population and poor economic management have combined to sap the country’s ability to save and invest. Compared to its neighbours — India, Bangladesh, and Sri Lanka — Pakistan’s living standards, healthcare, and education have all fallen behind. One major issue is population growth. Pakistan’s population has quadrupled in the last 50 years, leaving the country with a much larger share of young, non-working dependents. That imbalance limits how much families can save, which in turn limits national investment. In countries like India and Bangladesh, the ratio of working-age people is much higher, supporting faster economic growth. Meanwhile, Pakistan struggles to keep up.