Recent data released by the World Bank draws a striking contrast between India and Pakistan, two neighboring South Asian countries with a shared colonial past but vastly different trajectories in addressing poverty. The figures reflect not just economic performance but also the choices made by each nation over the past several years, shedding light on how governance, policy priorities, and accountability can shape the future of millions.
India’s data, released by the World Bank on Saturday, compares poverty levels between the fiscal years 2011-12 and 2022-23. In contrast, Pakistan’s statistics cover a shorter period, from 2017-18 to 2020-21. The timing of this data release is noteworthy, coinciding with recent developments that saw India overtake Japan to become the fourth-largest economy in the world. Conversely, Pakistan was in the news for yet another financial bailout from the International Monetary Fund (IMF), signaling its ongoing economic instability.
The diverging paths of these two countries highlight the consequences of their respective governance models. While India’s progress stems from a developmental agenda focused on poverty alleviation, Pakistan’s challenges are rooted in mismanagement of funds and continued support for policies associated with extremism.
The World Bank has updated its definition of extreme poverty by adjusting the income threshold from $2.15 to $3 per person per day to account for inflation. Using this new benchmark, the World Bank’s Poverty and Shared Prosperity report shows that India achieved a major reduction in poverty. Between 2012 and 2022, the proportion of people in India living in extreme poverty dropped from 27.1 percent to just 5.3 percent of the population.
The numbers behind this transformation are significant. In 2022-23, about 75.24 million Indians were living in extreme poverty, a dramatic decrease from 344.47 million in 2011-12. That means 269 million people—more than the total population of Pakistan—were lifted out of extreme poverty in just 11 years.
Pakistan’s experience over a shorter span presents a grim picture. From 2017 to 2021, the percentage of people in extreme poverty rose sharply from 4.9 percent to 16.5 percent. Experts caution that these figures may understate the crisis, given that they are based on outdated surveys such as Pakistan’s Household Income and Expenditure Survey. In terms of the broader poverty line of $4.2 per person per day, the poverty headcount in Pakistan jumped from 39.8 percent of the population in 2017 to more than 44.7 percent in 2021.
Pakistan’s economic strategy has relied heavily on external loans to stay afloat. It has received 25 bailout packages from the IMF, totaling $44.57 billion. In addition, Pakistan has borrowed $38.8 billion from institutions like the World Bank, the Asian Development Bank, and the Islamic Development Bank. Loans from China alone surpass $25 billion, and additional funds totaling $7.8 billion have come from sources like Eurobonds and Sukuks. Meanwhile, countries such as Saudi Arabia, the UAE, and members of the Paris Club have extended several billion dollars in support as well.
Despite this significant inflow of money, transparency and accountability remain serious concerns in Pakistan. Over the years, international financial institutions have repeatedly raised alarms over Islamabad’s handling of funds. A major criticism lies in the fact that a considerable portion of these resources is diverted to military expenditure. This spending often supports Pakistan’s long-standing policy of asymmetric warfare against India, which includes financing terrorist organizations and maintaining terror infrastructure.
Ajay Bisaria, a former High Commissioner of India to Pakistan, emphasized this point during an interview with NDTV. “The world cannot fix the Pakistan problem unless the structural problem of Pakistan army’s overwhelming presence in politics and economy is fixed. Pakistan’s army controls the allocation of resources. So, all the funds that are sent either via bilateral donors or multilateral donors ends up being misused by the army and in building the terror machinery. All donors will do well to get a wake-up call from the data which shows that only the Pakistani army is getting enriched by its bailouts.”
Bisaria further advised that global institutions must adopt stricter oversight. “The world will do well to put strong FATF-like conditions to monitor the aid money that goes to Pakistan to ensure funds are used for development and the benefit of the people of Pakistan,” he added.
Echoing this sentiment, former Ambassador Ashok Sajjanhar told NDTV, “The Pakistani government’s priorities focus mainly on defence purchases on one end, and building a terror apparatus on the other end. Growth and development are phrases that are unheard of in Pakistani politics, as all governments have an unhealthy obsession with bringing India down, economically, politically and socially, rather than focusing on its own pressing domestic issues.”
Sajjanhar also noted how Pakistan’s continued support for extremist agendas undermines its own development. “But dismantling terror factories are not on Pakistan’s agenda since most continue to indulge in falsehoods. When Congressman Brad Sherman told Pakistan to end terror, he also spoke on behalf of millions of Pakistanis who see their development funds being funneled away towards terror and towards fulfilling the inflated egos of Pakistani generals,” he added.
Economist Piyush Doshi, co-founder of the Foundation for Economic Development, commented on the irrationality of Pakistan’s spending patterns. “Pakistan spending money in defence, particularly when it comes at the cost of very important development expenditure, is illogical. The world will be doing the people of Pakistan a favour by blacklisting the country, which will then force them to make rational choices and using funds to benefit its citizens.”
The contrasting realities of India and Pakistan, as captured by the World Bank’s latest data, offer a powerful lesson to the Global South. India serves as an example of what can be achieved through determined leadership, sound policy, and a commitment to lifting citizens out of poverty. Pakistan, on the other hand, illustrates the dangers of misgovernance, misplaced priorities, and a lack of accountability.
In essence, these developments reveal that poverty is not an inevitable outcome of history or geography. Rather, it is shaped by leadership decisions, economic priorities, and national will. As the data clearly shows, one neighbor is forging ahead, and the other is faltering. The global message is loud and clear: poverty can be overcome—not by chance, but by choice.