Government health expenditures as a percentage of GDP have declined in Pakistan, though not in absolute real terms, over the structural adjustment period. Progress over this period is evident on a number of health indicators. However, Pakistan still lags far behind the means of low income countries and South Asian countries in all child survival statistics. In view of this, and since the evidence shows a significant and sizeable association of public sector health expenditures and the decline in infant mortality rates, there seems little justification in cutting public sector expenditures.