THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Pakistan

Ranked 139th of 149

At a glance

Ranks

139 th on the Legatum
Prosperity Index™

98th
117th
100th
125th
121st
143rd
132nd
137th
149th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Pakistan performs best on Economic Quality and Governance and scores lowest on the Natural Environment sub-index.

Visit our Rankings table to see how Pakistan compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Pakistan has one of the biggest prosperity deficits in the world, well below that of its South Asian counterparts except for Afghanistan. All other countries with similar GDPs per capita to Pakistan such as Nicaragua, Honduras, and Ghana, are high over-deliverers of prosperity compared to their wealth.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

Progress has occurred in the Economic Quality sub-index since 2009 due to the steady implementation of essential reform programs, cheap oil prices, and fast growing remittances. Trailing 5- year growth remains the lowest in South Asia at 1.8%, but growth rates are expected to rise to 4.8% in 2017, according to the World Bank. Substantial progress has been made in reducing absolute poverty from 13% to 8% between 2007 and 2010. Since then poverty rates have stagnated at 8%, with relative poverty rates held at 29.5%. The number of people still living close to the poverty line is high, causing a high vulnerability to poverty.

Situated at the crossroads of South Asia ,China, Central Asia, and the Middle East, Pakistan is perfectly located for trade. This is a potential which remains untapped because of its conflict with neighboring countries, notably India with whom it has had bad relations since partition in 1947. Pakistan also imports more than it exports as low productivity and lack of competition are keeping its export quality and export diversity low.

With the highest unemployment rate in South Asia after Afghanistan, at 5.2%, the increase in the working age population represents an ever growing challenge to the country in the need to provide adequate jobs and services. Aditionally, poor education standards are inadequately preparing Pakistan’s youth (under 18s represent 40% of the population) for employment. Primary completion rates are low compared to the global average and youth literacy rates are stagnating at 74%, albeit higher than adult literacy rates at 51.5%. Due to religious and social conventions, exacerbated by the Taliban, girls are not being educated as much as boys.

Environmental concerns need to be addressed urgently. Pakistan ranks bottom of the world in the Natural Environment sub-index. Constant population growth, with infrastructure failing to keep up, and a large consumption of fossil fuels is putting the country’s resources under pressure. Low terrestrial protection is leaving the country under threat of rampant deforestation as frequent failure of the energy structure forces Pakistanis to cut wood for basic needs. The soil is losing its ability to retain water making it prone to flooding, the 2010 flood directly affecting twenty million people. Finally, wastewater treatment hardly exists, creating dangerous pollution of drinking water resources, as well as the nation’s rivers.

However, environmental problems aside, bad governance and poor security are the country’s main obstacles to prosperity. Endemic corruption combined with a terrible rule of law, has caused political instability and ensured that what little growth occurs is not translated well into prosperity. Yet, democracy levels have risen dramatically since the elections in 2013, which marked the first transition between democratically elected governments, coupled with a gradual improvement in the independence of the media and the judiciary.

Constant threat from violent extremism and terrorism, extenuated by the Taliban’s control of the northwest of the country, has propelled Pakistan’s Safety & Security ranking to 143rd. Casualities from terror attacks have risen over the last decade with Pakistan enduring one of the heaviest tolls in the world. According to the South Asia Terrorism portal, between 2003 and 2016 alone, over 21,000 civilians were killed. Pakistan scores very poorly on the political terror scale as security forces resort to increasingly tough tactics to try and contain the threat. Deteriorating Indo-Pakistani relations have led to increased incidents along the border resulting in a surge in battlefields deaths, although these have died down after the ceasefire in 2015.

Safety & Security scores in Pakistan, South Asia and the world according to the 2016 Prosperity Index.
Pakistan falls well behind the regional and world averages in Safety & Security, leading to the country being ranked in the global bottom ten in this sub-index.

Political events and security threats are keeping foreign investment flows low, undermining economic activity and contributing to the Business Environment sub-index having plumented by 39 ranks over the last decade. These factors are seriously hampering Pakistan’s prosperity development, notably keeping Health, Education, and Social Capital sub-indices in the global bottom 30, as the country cannot being to prosper under such threats.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.