Economic turnaround moment?

AFTER a commendable long period of uninterrupted decline in poverty rates, Pakistan’s economy is now facing one of its worst crises. Poor policy choices, combined with a series of shocks — Covid 19, the 2022 catastrophic floods and adverse global conditions — caused growth to slow, poverty to increase, and brought the country to the brink of debt default. Moreover, human development outcomes remain at levels we see in much poorer countries, while per capita income growth has been declining in the face of low productivity and high fertility. These challenges call for deep, sustained reforms. We recently launched Policy Notes, which lay out our views on what these should entail. What we propose is not new. We and others have made similar suggestions before. What is different this time is that the alternative of muddling through with short-term fixes and external financing is riskier and much harder to pull off.