Inclusive wealth, a measure of Pakistan’s prosperity and sustainability that accounts for social, economic and environmental factors, has been on the rise consistently since 1992, a new UN Environment Programme (UNEP) report shows.
The report titled “Inclusive Wealth of Pakistan: The Case for Investing in Natural Capital and Restoration” assessed Pakistan’s inclusive wealth, a measure of economic and environmental well-being that includes factors typically overlooked by indicators like gross domestic product (GDP). This framework counts the social value rather than the dollar price of assets such as natural, human, and produced capital, to provide a more holistic approach to economic monitoring and management.
Between 1992 and 2019, Pakistan’s inclusive wealth increased at an average of 2.3 percent annually.
Human capital and produced capital were responsible for the bulk of the increase, growing at a rate of 2.9 percent and 3.2 percent, respectively. Unfortunately, over the same period, natural capital declined annually by 0.1 percent on average. However, the last five years have shown evidence of an environmental turnaround, with forests, grassland, sparsely vegetated areas and water bodies all growing in the area since 2015.
Shrubland and wetlands remained static, while crop land receded. Future progress will depend on ensuring more investment in natural capital.
“Pakistan understands that inclusive, sustainable economic growth means tending to the engines of growth: people and nature,” said Special Assistant to Prime Minister on Climate Change Malik Amin Aslam. “This is why we have devoted ourselves to efforts like afforestation, marine protection, and ecosystem restoration. We want a future for Pakistan where the natural beauty of the country is not only restored but managed capably to support the well-being of Pakistanis.”
The bounce back in forest cover in recent years is likely attributable to restoration policy and tree plantation schemes under the Ten Billion Tree Tsunami Programme (TBTTP), the report says. Human capital has also benefitted from these initiatives through employment, health improvements and poverty alleviation. The TBTTP has restored hundreds of thousands of hectares of forest and is estimated to have created 85,000 jobs in tree nurseries alone.
“Our conventional economic accounting too often ignores how fundamental natural and human capital are to our prosperity,” said Inger Andersen, UNEP Executive Director.
“Inclusive wealth is a robust basis for investment decisions, as it reflects how to achieve higher living standards in the long run for all. By investing in restoration initiatives, Pakistan is setting the foundation for an inclusive and sustainable recovery from Covid-19 and beyond.”
The recent gains remain precarious, however. The report underlines that levels of natural capital are insufficient for current economic production and wealth accumulation. Further increases in inclusive wealth will depend on environmental and social considerations being properly integrated into planning and development strategies.