Reasons of Poverty in Pakistan:

Growing Population:
Growing population is badly affecting the economy and
development of Pakistan. Current Population growth
rate is around 2.7 % which is very high as compared to
international standards. In 1996, Pakistan is sixth
largest country with respect to population. According to
survey of 1994, it is estimated that Pakistan will be the
3rd largest country with respect to population by the
year 2050. Around 70% of total Population resides in
rural areas of Pakistan.

Unemployment:
There is a high unemployment rate in Pakistan due to
shortage of jobs. According to a study Pakistan need
to create 2.3 jobs every minute to provide employment
opportunities to the people of Pakistan. Unemployment
Rate is projected to trend around 5.90 percent in 2020,
according to our econometric models. Unemployment
rate measures the number of people actively looking
for a job as a percentage of the labour force. It is a
popular premise in Pakistan that vacancies are
not filled on the basis of qualification, experience
etc but these vacancies are filled on the basis of
nepotism ( use of power and influence).

Illiteracy:
Illiteracy rate of Pakistan is 45 % out which 33% is
contributed by women and 7.26 million children are out
of school due to poverty. According to an Institute of
Social and Policy Sciences report, “Pakistan has the
second highest number of out-of school children in the
world after Nigeria because Pakistan spends the
lowest GDP on education. Without education and job
skills training, young people cannot adopt the skills
needed for employment. Existing systems fail to
address the skills demanded by employers, and this
effects economic growth and societal development.
Without adequate education, people remain
unemployed.

Corruption:
Corruption is one of most chronic issues all over world
especially in countries like Pakistan where it has
routed down in government institutions enough that
cannot be eliminated easily. Corruption has spoiled
Pakistan completely and is resulting in increase in
poverty, unemployment, hunger and is vanished the
image of the country by bringing immense miseries to
its people.

Not Using Country Natural Resources:

Pakistan has many mineral resources which include
gypsum, limestone, chromites, iron ore, rock salt,
silver, gold, precious stones, gems, marbles, tiles,
copper, sulfur, fire clay and silica sand but cannot
make use of them. Pakistan has huge gas and oil
reserves but cannot use this to reduce shortage of oil
and gas. This situation also shows the lack of
management.

Lack of Foreign Investment:

Due to backwardness, political instabilities and
improper availability of infrastructure the attraction for
foreign investment is not suitable. Foreign investment
is $ 1.8 billion in Pakistan. Lack of foreign investment
means less employment opportunities and poverty.

Use of Backward Technology:

Techniques of productions used by developing
countries are backward. Due to out-dated methods of
production, productivity level is low. Low level of
productivity means narrowness of market and
reduction in exports and increase in imports.

Imposition of Taxes:
Government has to impose taxes to raise its revenue.
Imposition of taxes reduces the income of people.
Lack of income means low savings and low investment
and poverty.

Non-Productive Expenditures:
Government has to make a lot of unproductive
expenditures on social events and also spends a lot of
budget on defence. These high expenditures are also
a reason of poverty.

Budget Deficit:
A budget deficit happens when current expenses
exceed the amount of income received through
standard operations. The budget deficit has recorded
at Rs541.7 billion (1.4 percent of the GDP), according
to the latest data of ministry of finance. One of the
primary dangers of a budget deficit is inflation (Inflation
means that the general level of prices is going up),
which is the continuous increase of price levels.
Ultimately, a recession (period of temporary economic
decline during which trade and industrial activity are
reduced, generally identified by a fall in GDP) will
occur, which represents a decline in economic activity.