Pakistan, 2021–2025: Lifting Growth, Building Resilience, Increasing Competitiveness
Introduction
The Asian Development Bank (ADB) Country Partnership Strategy (CPS) for Pakistan, covering the years 2021–2025, outlines a strategic framework to address the nation’s economic challenges and foster sustainable growth. This plan aligns with Pakistan’s Vision 2025, ADB’s Strategy 2030, and the Sustainable Development Goals (SDGs), focusing on three primary pillars: improving economic management, building resilience, and boosting competitiveness12.
Economic Management and Stability
ADB’s CPS emphasizes restoring economic stability and growth in Pakistan by addressing structural issues such as fiscal deficits, low export capacity, and weak domestic revenue generation. The strategy integrates institutional reforms with investments in physical and social infrastructure to ensure sustainability. Key measures include enhancing domestic resource mobilization, improving tax collection systems, and fostering export-oriented industries12.
The CPS also supports macroeconomic stabilization efforts initiated under Pakistan’s Vision 2025. These include fiscal restraint, prudent macroeconomic management, and external financing rollovers. Despite challenges like elevated debt levels and financial sector risks, the government aims to rebuild fiscal buffers while mitigating risks to economic imbalances34.
Building Resilience through Human Capital Development
ADB highlights the need for human capital development as a cornerstone for resilience. Investments in education, healthcare, and social protection systems are prioritized to improve productivity and well-being. The strategy focuses on upgrading health facilities, enhancing education quality, and strengthening social safety nets to protect vulnerable populations during crises12.
Pakistan’s Vision 2025 complements this approach by emphasizing inclusive growth through human development initiatives. These include scaling up investments in education and healthcare, promoting gender equality, fostering interfaith harmony, and empowering marginalized communities. The vision also seeks to harness the potential of Pakistan’s youth bulge by creating job opportunities and advancing a knowledge-based economy.
Boosting Competitiveness and Private Sector Development
The CPS aims to enhance competitiveness by fostering private sector development and creating jobs. ADB plans to support entrepreneurship, strengthen small- and medium-sized enterprises (SMEs), and attract private investment. Public-private partnerships will be promoted through comprehensive policy frameworks to address constraints such as energy deficits, labor skill gaps, and inefficient judicial processes12.
Vision 2025 further underscores private sector-led growth as a driver of economic transformation. It seeks to make Pakistan an attractive destination for investment by addressing regulatory hurdles, restructuring public sector enterprises, and enabling entrepreneurship. The vision also aims to triple labor productivity and improve Pakistan’s ranking in global competitiveness indices4.
Energy, Water, and Food Security
Recognizing the importance of sustainable resource management for economic growth, ADB supports initiatives to ensure reliable access to energy, water, and food. Efforts include addressing gaps in these sectors while tackling climate change threats. Conservation measures, efficient resource distribution, and environmental protection are integral components of this strategy4.
Vision 2025 aligns with these goals by committing major resources through public-private collaborations for energy production and storage capacities. It emphasizes conservation practices alongside infrastructure development to meet growing demand sustainably4.
Modernizing Infrastructure for Regional Connectivity
ADB’s CPS includes plans to modernize transportation infrastructure to reduce costs, improve safety, and enhance connectivity between rural areas and urban centers. This aligns with Vision 2025’s focus on establishing an integrated communication system that connects Pakistan with dynamic regional economies like China, South Asia, the Middle East, and Central Asia4.
Key targets under Vision 2025 include doubling road density, increasing rail transport share from 4% to 20%, expanding exports significantly from $25 billion to $150 billion annually, and creating globally recognized Pakistani brands.
Challenges Amid Progress
While Pakistan has made strides in macroeconomic stabilization—such as reducing inflation rates and shrinking fiscal deficits—persistent challenges remain. Poverty has increased due to shocks like the COVID-19 pandemic and the catastrophic floods in 2022. Structural constraints such as unproductive agriculture practices, protectionist trade policies, a heavy state presence in the economy, and an unsustainable energy sector continue to hinder growth3.
Real GDP growth remains subdued; projections indicate gradual recovery but below optimal levels due to tight macroeconomic policies focused on rebuilding fiscal buffers. High population growth further strains resources while limiting wage increases3.
Conclusion
ADB’s CPS for Pakistan (2021–2025) offers a comprehensive roadmap for addressing structural challenges while fostering sustainable development. By focusing on economic management, human capital development, private sector growth, resource security, infrastructure modernization, and regional connectivity, the strategy aims to lift growth levels while building resilience against future crises.
Vision 2025 complements this framework by setting ambitious goals for inclusive growth through human development initiatives, private sector-led transformation, governance reforms, resource management strategies, competitive knowledge economy development, and regional integration efforts.
Despite significant challenges—including poverty increases and structural constraints—these combined strategies provide a pathway for Pakistan to achieve robust economic recovery while improving living standards across its population.
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