Financing population agenda amid global funding shifts

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In his opening address in 2025, UN Secretary-General António Guterres underscored the urgent need for global cooperation on AI governance, peace and security, climate action, and addressing inequalities. These challenges are not only of global significance but are deeply relevant to Pakistan. Two key mega trends - gender equality and calibrating population to economic growth - emerge as critical prerequisites for progress. However, a decisive factor in ensuring sustained development in Pakistan is the strengthening of financing mechanisms, particularly domestic financing for development (DDFD).

The changing dynamics of Official Development Assistance (ODA) from traditional northern donor countries are reshaping development financing. As populist and nativist parties gain traction, there is growing ideological resistance to foreign aid. This, coupled with the humanitarian crises closer to home, such as conflicts, migration, and economic instability, are prioritising immediate responses over long-term ODA. Consequently, ODA is shrinking, and this trend is likely to continue, as donor countries grapple with competing priorities. Two key trends have emerged in the recent years. First, there's a shift from funding to financing development, which involves restructuring financial flows to achieve shared outcomes. Second, there's a growing emphasis on domestic financing over international aid, a shift that underscores the importance of countries like Pakistan to manage their own resources more effectively.

The need for domestic financing is growing, particularly in critical areas such as population issues, including family planning, where demand is surging in countries experiencing rapid population growth. However, many countries, including Pakistan, still rely, in part, on external funding to meet these needs. While external funding can offer temporary relief and technical assistance, it cannot be a substitute for robust domestic resource mobilisation. With its rapidly growing population of over 241 million, Pakistan needs to shift away from long-term dependence on donor assistance for essential services such as family planning and reproductive health's goods, services, and workforce.

Although domestic financing has shown improvement, it remains insufficient to meet the growing needs of Pakistan's population. Achieving the goal of increasing modern contraceptive prevalence and ensuring financial protection for reproductive health services will require a substantial boost in domestic public financing. Pakistan's FP2030 commitment aims to support over 18 million women in accessing modern contraceptives. However, this will necessitate an increase in per capita spending - from $1.1 to $3.5 per capita, as recommended by the Council of Common Interests (CCI).

Inadequate public financing leads to inequities in access to family planning services, particularly for the poor and marginalised communities. Without sufficient investment, the country risks further widening the disparities in reproductive health services, exacerbating socio-economic inequalities. Domestic resource mobilisation is key to ensuring that Pakistan moves toward financial autonomy, while safeguarding the most vulnerable members of society.

Furthermore, fostering partnerships with regional and international organisations can offer valuable technical expertise and capacity-building for sustainable domestic financing. By leveraging these collaborations, Pakistan can address systemic challenges, share best practices, and strengthen accountability mechanisms to achieve its development goals.

A recent political economy analysis (PEA) on family planning, conducted by UNFPA, identified key barriers to improving domestic financing in Pakistan. The first challenge is a lack of effective political commitment. The second challenge is a narrow view of family planning, often limited to contraceptives alone, without recognising its broader benefits such as improved economic savings, better food security, and addressing issues of malnutrition and stunting. To overcome these challenges, Pakistan must expand its perspective on family planning and link it to broader economic and social outcomes.

DDFD goes beyond simply increasing allocations. It is fundamentally about ensuring that these resources are invested effectively. Fiscal policies - both taxation and public spending - are central to building the infrastructure necessary for long-term development. The government is encouraged to make strategic investments in critical sectors such as education, sexual and reproductive health, and nutrition, with a particular focus on gender equality and the inclusion of disadvantaged communities.

To achieve sustainable development, Pakistan must carefully balance its fiscal priorities, by integrating sustainable development criteria into policies while improving debt management. Fiscal reforms should be designed to maximise long-term impact and minimise inequality, ensuring that development is both inclusive and financially sustainable.

Foreign direct investment (FDI) remains a crucial avenue for financing development in Pakistan. According to the UNCTAD 2023 report, Pakistan faces several challenges including a large informal economy, frequent natural disasters, and a weak manufacturing base. These factors hinder private investment in key sectors like family planning and reproductive health.

Given these constraints, Pakistan must actively explore avenues for increasing domestic private sector involvement in financing its development goals. While managing domestic debt remains a challenge, engaging private actors through innovative financing models - such as public-private partnerships and impact investing - can be a game-changer in bridging the financing gap, especially in family planning and sexual and reproductive health services.

The government needs to adopt a multifaceted strategy to address these challenges. I envisage six key actions to move forward: 1) increase budgetary allocations for family planning and reproductive health; 2) integrate family planning elements into broader fiscal planning, ensuring alignment with national development goals; 3) enhance the efficiency of spending to ensure that allocated resources are utilised effectively; 4) leverage private sector resources, including both FDI and domestic investment, to support family planning and reproductive health programmes; 5) create a politically enabling environment through strong governance and upstream policies, such as reforming NFC formula and BISP programme to align national action plan for population agenda to ensure proper implementation and accountability; and 6) mobilise international support by demonstrating strong leadership and ownership in the implementation of policies.

These actions, taken together, will foster a sustainable and equitable approach to meet Pakistan's population development needs.