The government has pushed back against interpretations of a World Bank report that Pakistan now accounts for nearly half of the people living in extreme poverty across its newly defined MENAAP region.
Adviser to the Finance Minister Khurram Schehzad said the change largely reflects the World Bank’s decision to move Pakistan into its Middle East, North Africa, Afghanistan and Pakistan (MENAAP) reporting group.
He said the move was a statistical and administrative reclassification. It does not change Pakistan’s geographical position as a South Asian country or its income classification.
The World Bank said in its latest MENAAP economic update that Pakistan accounted for 48 percent of people living below its $3-a-day extreme poverty line in the region in 2024.
It also said Pakistan’s poverty rate increased by 6.4 percentage points between 2018-19 and 2024-25.
Schehzad said such regional figures can change sharply when a large country is added to an existing statistical group.
Pakistan has a much larger population than many countries in the traditional Middle East and North Africa grouping. Its inclusion therefore has a significant impact on regional totals and averages, he said.
He used a simple example to explain the effect. If a region of 100 million people has a 10 percent poverty rate and another country with 100 million people and a 30 percent poverty rate is added, the combined rate becomes 20 percent.
That does not mean poverty suddenly doubled in either country. The change comes from the composition of the group.
Schehzad warned against reading the World Bank figures as evidence that poverty had suddenly shifted from other MENA countries to Pakistan.
He also said comparisons with older MENA data need caution because the new regional grouping includes Pakistan and Afghanistan. At the same time, Pakistan’s removal from the South Asia grouping will also affect the region’s historical averages.
The World Bank, however, said the MENAAP region is now the only region where poverty remains above pre-pandemic levels and continues to rise, with Pakistan driving much of the deterioration.
According to the bank, 14.3 percent of MENAAP’s population was living on less than $3 a day in 2024, compared with 10.4 percent globally.
It attributed Pakistan’s worsening poverty situation to a series of economic shocks, including the Covid-19 pandemic, the devastating 2022 floods, high inflation, currency depreciation and a prolonged period of economic adjustment.
These factors, the World Bank said, weakened real household incomes and reduced employment opportunities.
Schehzad said regional classifications should be treated as analytical tools rather than indicators of geography or national identity.
He said poverty comparisons between Pakistan, India and other countries should instead use country-level data based on the same poverty threshold and reference year.
The debate, therefore, is not over whether Pakistan faces a serious poverty problem. Rather, it highlights how changes in the way countries are grouped can significantly alter regional statistics without changing conditions on the ground.
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