Islamabad: Pakistan produced its first Comprehensive Wealth Report (IWR) in June 2021 in line with global demand to adopt the model of wealth imperative for sustainable development.
Composite wealth includes all sectors of the economy and takes a holistic approach by considering all relevant indicators of economic development.
The measurement of growth in Pakistan is currently limited to gross domestic product (GDP), although developed economies include all three indicators of growth (human capital, manufactured capital and natural capital) when measuring economic growth.
The world has now embarked on sustainable development which has three main pillars – social, economic and environmental development, and is defined as a process of development that meets the needs of the present generation without compromising the needs of future generations. Cares.
Therefore, IWR provides valuable insights into social (human capital), economic (productive capital) and environmental (natural capital) development and ensures that the preconditions for sustainable development are met.
At the global level, the process of inclusive wealth began with the launch of IWR for the first time by the United Nations Conference on Sustainable Development (UNCSD) during the Rio+20 held in Rio de Janeiro, Brazil in 2012.
The paradigm of growth and development has shifted from simple growth in the 1960s and 70s to ecological growth in the 90s to sustainable development in the 2000s and now inclusive wealth.
So far more than 140 countries have developed their IWR while others are working on it. Pakistan launched its first IWR on the occasion of World Environment Day 2021 with the support of United Nations Environment Program (UNEP). Two years later, the country is yet to see the implementation of IWR to reap its benefits.
Pakistan is endowed with enormous natural and human capital that can help transform the generated capital into productivity growth, but environmental considerations have not yet been properly incorporated into planning and development strategies.
IWR helps in analyzing the health of any country’s economy, which can be easily linked to economic growth through changes in natural capital that greatly affects the country’s economic and productive base.
Pakistan is providing high quality human capital to the developed countries of the world such as USA, European states, UK, Canada, Australia and Japan and helping them to increase their generated capital through various immigration programs. However, the same human capital is not performing as effectively at the national level as it is in overseas markets.
This could be mainly due to relative capacity, work environment and institutional strength outside Pakistan. Similarly, capital produced apart from abundant raw materials (cotton, rice etc.) is not up to international standards due to poor capacity, redundant technology and resources. Consequently, natural capital faces increasing pressures such as overgrazing, deforestation and deforestation, fishing and hunting.
The greatest opportunity to take advantage of the benefits of natural capital is to obtain carbon credits because natural resources are still intact and have not been exploited for carbon storage.
Mangrove forests in Sindh have been pledged for 60 years under the Carbon Credit Program and the provincial forest department has already received the first installment of over $14 million.
The second tranche will be $25 million for the next five years and the credit amount will increase every five years for improved carbon storage.
About 80 percent of the money will go to the local community and 20 percent will be used by the Sindh Forest Department as its administrative cost.
This amazing feat of the Sindh Forest Department is a great example for others to take advantage of the natural capital as the vegetation and forest reserves still exist.
Thus, natural capital can contribute very effectively to the national economy and that too in much-needed foreign exchange.
Relevant ministries and departments at the federal and provincial levels should now include natural capital as a serious route to generating income towards inclusive wealth.
Unfortunately, lack of awareness of this great and innovative window of opportunity coupled with weak capacity at the national and provincial levels is largely depriving Pakistan of the benefits of available natural capital.
Pakistan has already completed mapping under the Reducing Emissions from Deforestation and Forest Degradation (REDD+) study to provide an enabling environment for capturing carbon credits from natural capital.
The Ministry of Climate Change is implementing the REDD+ Readiness Plan with a financial grant from the World Bank’s Forest Carbon Partnership Facility (FCPF).
REDD+ has developed environmental tools for different landscapes of Pakistan, including coastal areas, highlands, hot and cold plains and deserts. Implementing REDD+ is now necessary to obtain carbon credits and take other sustainable development measures.
The author is a PhD in Natural Resource Management and has written the first IWR for Pakistan in 2021.
