THE Economic Survey of Pakistan 2024-25 sounded an alarming wake-up call upon its release in the whole country: federal and provincial education spending dropped to just 0.8 per cent of GDP in the first three quarters of FY25 a staggering 29pc decline from 1.13pc in the same period last year.

Even before this fall, Pakistan already lagged behind every Asian country except Afghanistan.

Regional peers typically allocate 3-4pc of GDP to education. Pakistan`s total public education spending was 1.7pc of GDP in FY22, falling to 1.5pc in FY23. This ongoing retrenchment is more than a budget cut; it`s a retreat from humandevelopment with far-reaching consequences.

Today, only six in 10 Pakistanis can read and write. The gender divide is stark: nearly 70pc of men are literate and only 50pc of women. Over 26 million children have never entered a classroom half of them girls. Amid stalled growth and regional instability, our youth bulge of nearly 100m risks becoming a liability unless education becomes the core of our national strategy.

Over decades, Pakistan`s analytical institutions the media, think tanks, and universities have been hollowed out by suppression and politicisation. Independent inquiry has given way to rote conformity; rigorous scholarship to shallow punditry. Without institutions to probe complex challenges, we stumble through a fog of sound bitesand propaganda. Only a revitalised school and higher-education systems can rebuild the criticalthinking engine the nation urgently needs.

History shows literacy and mass schooling fuel national transformation. Britain`s rise from a £30 billion economy in 1650 to £600bn by 1900 coincided with compulsory education, lifting literacy from 70pc of men (55pc of women) in the mid-1800s to near universal access by century`s end. This foundation powered railways, steamengines, and textiles to drive 40pc of global industrial output by 1870. Pakistan`s 60pc literacy rate mirrors Britain`s 1850s rate underscoring how far behind we`ve fallen.

A landmark 2013 Journal of Development Economics study by Robert Barro and Jong-Wha Lee found that each additional year of average schooling adds 0.43 percentage points to longterm per capita economic growth. The World Bank`s 2018 World Development Report similarly estimates that one more year of schooling contributes 0.4-0.6 percentage points annually.

Learning quality matters as much as school years. A 2008 Journal of Economic Literature article by Eric Hanushek and Ludger Woessmann showed that improving average performance on international assessments like the Programme for International Student Assessment or the Trends in International Mathematics and ScienceStudy by one standard deviation is linked to a 1.3 percentage point increase in annual per capita GDP growth. Their 2015 Journal of Economic Growth study found that even greater test score improvements can yield one to two percentage points in additional annual growth. These findings highlight that learning outcomes not just enrolment drive long-term prosperity.

Pakistan`s recent 4pc growth is unsustainable without a pipeline of educated workers. Prussia`s18th-century compulsory schooling lifted literacy to nearly 90pc by unification, laying the foundation for Germany`s industrial rise and a forty-fold output increase by 1913. China`s eradication of illiteracy from 1949 to 1978 underpinned its ascent to an $18 trillion economy. South Korea jumped from 30pc literacy and $100 per capita GDP in 1960 to 98pc literacy by 1980 and a multitrillion-dollar economy today. Education drove their sustained 2-3pc annual productivity gains gains Pakistan can`t afford to miss.

Pakistan still lingers at 60.6pc literacy, with women at 52.8pc and men at 68pc rates Britain surpassed 174 years ago. This 14.2pc gender gap and 39.4pc overall illiteracy stifle national potential. Pakistan`s literacy rate is Asia`s lowest (excluding Afghanistan).

The 18th Amendment`s devolution to the provinces has not helped to educate the nationdespite ever-expanding provincial education budgets. In Sindh, years of continuous rule saw literacy dip to 57.54pc, below 2008`s 58pc, with millions of children out of school. Balochistan has the highest enrolment gap: nearly seven in 10 children aged 5-15 never attend class. Punjab`s schools are overcrowded, and half the teachers lack qualifications. In Khyber Pakhtunkhwa, only two-thirds of fifth-graders read Urdu at grade level; fewer master basic math.

The response must be swift and sweeping.

Pakistan should commit to raising education spending to 4pc of GDP over five years. Article 25(A) of the Constitution, which guarantees free and compulsory education, must be fully implemented with accountability and field-level monitoring to ensure all 12m out-of-school girls and their brothers enrol and stay in school.

Curriculum reform must embed science, technology, engineering and mathematics and critical thinking across subjects while 500,000 teachers receive certification and professional development to resolve the unqualified-teacher crisis.

There are about 186,000 public educational institutions in Pakistan, including around 150,000 primary, middle, and high schools, and 147 public universities, enrolling about 30m students.

Primary schools comprise 58pc of this system, with 83pc located in rural areas. Public-private partnerships operate 10,382 schools, and about 82pc of public institutions offer education from primary through college.

To improve governance, district-level education boards should replace today`s opaque provincial systems. These boards must be granted budgetary control and operational autonomy to meet local needs. Currently, education funds flow through provincial governments via federal transfers. Instead, funds should go directly to district governments and boards since provincial bodies have consistently failed, as seen in widespread corruption and `ghost schools`.

District governments must also be empowered through constitutional amendment if needed to raise revenue via local taxes or levies to invest in education and supplement federal and provincial funds.

Technology can help bridge educational gaps. Mobile learning platforms tailored to 15m rural students could halve the urban-rural achievement gap. Notably, The Citizens Foundation (TCF) a major nonprofit school network and the globallyrespected Khan Academy have launched an artificial intelligence-powered pilot programme to assist teachers and enrich learning in select TCF schools. Targeting Grades 6-8, the programme enhances lesson delivery, encourages critical thinking, and boosts engagement. TCF currently serves 301,000 students across 2,033 units nationwide.

Failure to act risks cementing Pakistan`s place as an educational outlier by suppressing growth below 2pc, but bold investment and reform could turn our demographic burden into a dividend rivalling Asia`s fastest-growing economies. Pakistan`s 240m people are its greatest resource but only if we unlock their potential through education. Anything less is a risk the nation cannot afford.m The writer is the former head of Citigroup`s emerging markets investments and author of `The Gathering Storm`