Dr. Luay Shabaneh
The Fourth International Conference on Financing for Development (FFD4) concluded on July 3rd, 2025, with the adoption of an outcome document that revitalizes the Global Financing for Development Framework (GFDF) reaffirming commitment to SDGs, eradication of poverty, protecting human rights, and resolving geopolitical tensions and macroeconomic challenges through multilateral cooperation.
Furthermore, the document highlights the urgent need for a comprehensive package of reforms and actions aimed at bridging the financing gap, enhancing fiscal space, addressing debt issues, and reducing capital costs.
Three pathways were explored to tackle financing for development: firstly, by optimizing domestic public resources through strong tax systems and transparency. Secondly, policy frameworks are conducive to investment in SDGs at all levels and thirdly expand investments to fully harness the potential of information and communication technology (ICT) and innovation, thereby promoting national innovation systems.
FFD4 underscored two key points; one is encouraging and the other is concerning for Pakistan. The positive aspect is placing people at the heart of all initiatives. This involves recognizing the significance of tackling inequalities and confronting the harsh reality that true economic progress is unattainable without gender inclusivity, and the commitment to sustainability without equity is merely a broken promise.
The conference acknowledged that despite the lofty declarations regarding equality and the notion of ‘leaving no one behind’, women continue to be significantly underrepresented, underfunded, and neglected in the realm of development. Conversely, it was also highlighted that each nation bears the primary responsibility for its own economic and social advancement. This implicitly suggests that dependence on international funding to meet development objectives may no longer be a viable option.
Pakistan’s persistent debt crisis is a multifaceted issue driven by rapid population growth, declining export revenues, and heavy reliance on foreign borrowing. The country’s debt trap is not insurmountable but requires structural reforms, export-led growth, and disciplined fiscal management. Without addressing underlying inefficiencies, short-term fixes will only provide temporary relief.
A combination of austerity, investment in human capital, and export diversification offers the most sustainable path forward. Innovative approaches like debt-for-development swaps to convert debt repayments into investments in family planning, education, and climate-resilient by partnering with multilateral banks and climate financing mechanisms.
To effectively finance population development in Pakistan, a multi-pronged strategy is needed. This strategy must prioritize human capital, reproductive health including family planning, education, and job creation, while ensuring sustainable funding. Given its rapidly growing population at the pace of 2.55% per year, the focus must shift to investing in people to transform the population challenge into a demographic dividend. Investment in human capital involves increasing budget allocation to 4–6% of GDP (currently below2%), utilizing performance-based funding for schools and universities and leveraging public-private partnerships for technical and vocational education.
It also includes investment in family planning, reproductive and maternal health by raising health sector spending to 3% of GDP (currently less than1.5%). This should focus on family planning, maternal health, child nutrition and expansion of community-based health programs (e.g., Lady Health Workers and community health workers) and investment in midwifery education and training.
Such investments not only unlock economic potential but also uphold the fundamental rights of women, youth, and marginalized communities to access health, education, and opportunities. A national demographic dividend roadmap should be adopted, outlining phased interventions starting with early childhood development, followed by universal education, youth employment, and increased female labor force participation
As for mobilizing domestic resources, Pakistan is encouraged to lead a tax reform and to initiate a “Population and Development Fund”. This fund could be financed through a portion of federal and provincial budgets, taxes on luxury goods or extractive industries, and exempt family planning commodities.
It is crucial for Pakistan to adopt results-based financing, including within theNational Finance Commission (NFC) awards. The country should also seek outcome-based from donors particularly the multilateral banks for areas such as reduced maternal mortality, improved literacy, improved gender equality, skilled birth attendance, etc.
Pakistan can further partner with UNFPA, UNICEF, WHO, and World Bank for grants specifically targeting reproductive health, youth development, and gender equality. Aligning its population policy with Sustainable Development Goals (SDGs) will also enable access to global development funds. Pakistan needs to promote family planning as a strategic investment acknowledging that every dollar spent on family planning yields up to four dollars in economic returns. The country should also promote low-cost, high-impact solutions through community outreach, mobile clinics, public private partnership andtargeted investment in behavior change campaigns. Furthermore, Another opportunity lies in harnessing the power of the diaspora and impact investment by issuing “Population Development Bonds” to overseas Pakistanis, offering modest financial returns alongside clear social impact outcomes such as education, women’s health, youth employment. Private sector engagement can also be fostered through incentivizing companies to invest in workforce training, and employee family planning programs. A decentralized financing mechanism is a great approach to empower provincial and local governments to raise and manage development funds, and to use conditional grants tied to the population agenda or youth empowerment targets. Finally, innovative financing tools such as social impact bonds (pay-for-success models), digital financial inclusion to improve service delivery and cash transfers and carbon credits or climate funds linked to health, clean energy, and water access.Many innovative ideas on the table but harnessing them requires national agreement to achieve a unified vision. This calls for a new modus operandi based on payment by target, not by process to create a culture of using KPI and measurable improvements in people’s lives as benchmarks for measuring
progress.
— The writer is
UNFPA Representative
