'Stabilisation policies driving poverty'

Experts say weak exports, low investment, privatisation policies capping growth

LAHORE:

Repeated economic stabilisation measures in Pakistan – including exchange-rate adjustments, privatisation and liberalisation – have substantially transformed the country's economy but have also contributed to rising poverty, said economic experts on Monday.

Speaking at the inauguration of the 8th International Conference on Applied Development Economics (ADE) in Lahore, Lahore School of Economics (LSE) Rector Dr Shahid Chaudhry stated that Pakistan's economic policies are deeply shaped by national development concerns that necessitate high government spending. He added that state-led healthcare and social protection efforts illustrate the complex challenges and opportunities in strengthening public welfare systems, making scholarly research platforms vital for finding sustainable, inclusive development pathways.

Addressing the structural weaknesses of the national economy, LSE Professor and Dean of the Economics Faculty Dr Azam Chaudhry highlighted that Pakistan's economic growth has increasingly reached a ceiling due to limited export performance. He noted that weak investment by local firms remains a central driver of this stagnation, driven primarily by information failures, credit constraints and coordination failures that hinder domestic businesses from expanding and competing in international markets.

The conference also presented empirical research on human capital, social reforms and migration as key components of development. University of Michigan Professor Dean Yang highlighted that remittances from international migrants serve as vital income insurance for vulnerable households during economic shocks, with non-migrant families frequently sending members abroad as a coping mechanism.

On domestic policy impacts, World Bank economist Kate Vyborny shared findings showing that digitising and centralising land records in Punjab increased women's inheritance of parental land from 13% to 22%. Additionally, researchers presented evidence that early-life exposure to Pakistan's 2010 floods caused long-term losses in children's health and cognitive development, while child marriage edutainment interventions and expanded access to local higher education significantly improved female enrolment, grade progression and long-term socio-economic outcomes.

The three-day conference, running from August 17 to 19, 2026, is organised by the Centre for Research in Economics and Business (CREB) and the Innovation and Technology Centre (ITC) at LSE, in collaboration with the International Growth Centre and the Consortium for Development Policy Research.