Poverty in Pakistan

May 2nd, 2009

Poverty shapes a horrifying giant to Pakistan and this giant continuously becoming healthier that swallowing the whole developmental resources and each effort done towards the progress is simply going down the drain. It becomes a great challenge to the rulers, legislators, politicians, policy makers and other concerned regulators. Poverty is growing rapidly and offsetting the whole economic gainful which is a big dilemma.Today about 45 % of whole populace is living below the poverty line and this percentage is on ascending trend which invites the whole intellectual forces to come on the point. The situation prevailing is so worse that require some immediate action with utmost focused attention. This deteriorating situation should be on the top of the priority list to the government while it seems that things are slipping through the hands of governmental agencies.

Government has started several programs on poverty reduction and eradication with the help of international organizations like UN, IMF, ADB and other donor organization but the efforts being made are doesnt reap any viable results. What are the reason behind the failure of such project and why theses program could not prove fruitful? The answer to these questions requires a separate full course investigation process which should be embark on immediately while on the other hand these projects should be on the way with greater momentum.It is really a pinching fact that Pakistan becomes one of those countries where about all social and economic indicators are on the declining side which is shameful for our so called representatives who are now in the parliament and doing nothing for their peoples betterment except enjoying facilities and protocol. Pakistans circumstances today is substantially contributing and providing more leverage to the ever rising poverty and vulnerability. Corruption, Illiteracy, Unemployment, Situation of Law and Order, these all are strongly inter-related factors. Especially the so called war on terror which has causes a never ending series of suicide attacks which has simply paralyzed the whole society and economy There are several reasons which are responsible for the exponential poverty rate. Corruption is one of the greater worth as all efforts being made against this evil are prove in vain. Pakistan is among those countries where governmental agencies and departments become paralyzed due to top to bottom malfeasance and corruption. There exist many example that governmental department performing against their own objective like anti-corruption department itself involve in corruption. There are certain other reasons of great substance which are expanding poverty, like Injustice, Improper distribution of wealth, Unemployment, Illiteracy, Feudalism, Uneven social order and sense of deprivation among the different regional and social groups

Now there is need to devise planning and execution to fight with this social upheaval with the whole available sources and each segment of society is responsible and should act with due course. Measures should be taken immediately to avoid further delay to eradicate poverty from its roots.

Several measures can be taken towards the ultimate objective, like enhancement and encouragement of investment especially in the rural areas to generate employment opportunities. Provision of cheap microfinance to the small enterprisers and individuals to assist them and help them to earn their livelihood in respectful manners. Educational with technical and vocational training facilities can help to eliminate poverty. Mapping and capping of corruption will automatically reduce the poverty, certain other social issues like justice at the doorstep, health care facilities, level playing field for all, equality and egalitarianism are quite substantial avenues to start. At the end although the situation prevailing in our country is much inferior but here is the opportunity, challenge for us to fight against this evil at each front of society

M.Imran Aslam ( A Freelance)

Case of Pakistan: [3] Poverty has many dimensions in Pakistan. People have not only low incomes but they also are suffering from lack of access over basic needs. The major challenge of today is poverty reduction. In Pakistan, Poverty Reduction Strategy was launched by the government in 2001 in response to the rising trend in poverty during 1990s. It consisted of the following five elements:(a) Accelerating economic growth and maintaining macroeconomic stability. (b) Investing in human capital. (c) Augmenting targeted interventions. (d) Expanding social safety nets. (e) Improving governance.

The net outcome of interactions among these five elements would be the expected reduction in transitory and chronic poverty on a sustained basis. The reduction in poverty and improvement in social indicators and living conditions of the society are being monitored frequently through large- scale household surveys in order to gauge their progress in meeting the targets set by Pakistan for achieving the seven UN Millennium Development Goals by 2015. Pakistans growth performance over the last four years is enviable in many respects. Sound macroeconomic policies and implementation of structural reforms in almost all sectors of the economy have transformed Pakistan into a stable and resurgent economy in recent years. The real GDP has grown at an average rate of over 7.5 percent per annum during the last three years (2003/04 to 2005/06). With population growing at an average rate of 1.9 percent per annum, the real per capita income has grown at an average rate of 5.6 percent per annum. The strong economic growth is bound to create employment opportunities and therefore reduce unemployment. The evidence provided by the Labour Force Survey 2005 (First two quarters) clearly supports the fact that economic growth has created employment opportunities. Since 2003-04 and until the first half of 2005-06, 5.82 million new jobs have been created as against an average job creation of 1.0 1.2 million per annum. Consequently, unemployment rate which stood at 8.3 percent in 2001-02 declined to 7.7 percent in 2003-04 and stood at 6.5 percent during July December 2005. The rising pace of job creation is bound to increase the income levels of the people. In recent years the role of remittances in reducing poverty has been widely acknowledged. Remittances allow families to maintain or increase expenditure on basic consumption, housing, education, and small-business formation. Total remittances inflows since 2001-02 and until 2005-06 have amounted over $ 19 billion or Rs.1129 billion. Such a massive inflow of remittances particularly towards the rural or semi-urban areas of Pakistan must have helped loosen the budget constraints of their recipients, allowing them to increase consumption of both durables and non-durables, on human capital accumulation (through both education and health care), and on real estate. To the extent that the poorer sections of society depend on remittances for their basic consumption needs, increased flow of remittances would be associated with reduction in poverty. Although, growth is necessary but it is not sufficient to make any significant dent to poverty. Realizing this fact the government had launched a directed program under the title of Poverty Related and Social Sector Program some five years ago. Over the last five years the government has spent Rs.1332 billion on poverty-related and social sector program to cater to the needs of poor and vulnerable sections of the society. Such a huge spending on targeted program is bound to make a significant dent to poverty. The Household Integrated Economic Survey (HIES) a component of Pakistan Social and Living Standards Measurement (PSLM) Survey provides important data on household income, consumption expenditure and consumption patterns at national and provincial level with rural-urban breakdown. The information pertaining to income and expenditure of the households are used to estimate poverty. The HIES is specifically designed to monitor poverty status of population by collecting information on consumption expenditure at the household level. With a representative sample size of 14706 households, it covered 5808 and 8898 households in the urban and rural areas of the country, respectively. The Survey was started in July 2004 and the entire field operations were completed in June 2005. The

poverty line is based on 2350 calories per adult equivalent per day. It is also comparable with poverty line of 2000-01 as it was also based on 2350 calories and calculated from Pakistan Integrated Household Survey (PIHS). The poverty line of 2004-05 is adjusted by the inflation rate during the period 2001-2005. The latest estimate of inflation adjusted poverty Line is Rs.878.64 per adult equivalent per month up from Rs.723.40 in 2001. Headcount ratio, i.e., percentage of population living below the poverty line has fallen from 34.46 percent in 2001 to 23.9 percent in 2004-05, a decline of 10.6 percentage points. In absolute numbers the count of poor persons has fallen from 49.23 million in 2001 to 36.45 million in 2004-05. The percentage of population living below the poverty line in rural areas has declined from 39.26 percent to 28.10 percent while those in urban areas, has declined from 22.69 percent 14.9 percent. In other words, rural poverty has declined by 11.16 percentage points and urban poverty is reduced by 7.79 percentage points. Consumption inequality increased marginally during the period. These findings are consistent with the developments on economic scene that have taken place in Pakistan since 2000-01. A strong growth in economy, rise in per capita income, a large inflow of remittances and massive spending on poverty-related and social sector programs were expected to reduce poverty in Pakistan. It is important to note that the methodology and the estimates of poverty have been endorsed by the development partners such as the World Bank, the Asian Development Bank, the United Nations Development Program (UNDP) and the Department for International Development (DFID), UK. The service of world renowned poverty expert, Professor Nanak Kakwani was hired by the UNDP to independently look into the methodology as well as poverty estimates. He also authenticated both the methodology and estimates. In order to maintain consistency across years, it is essential that we apply the same agreed upon methodology over the years, irrespective of its weaknesses and strengths. Conclusion: [4] Pakistan has emerged as Asian Tiger with reference to the Economic growth during last couple of years. And government of Pakistan spent about Rs.1332 billion to reduce the poverty. And as a result poverty reduced from 39.26 to 28.10 percent (rural) and from 22.69 to 14.9 percent (urban). By having a close look at the facts it is revealed that although a heavy amount has been spent on poverty reduction but the attained results are not up to the mark as poverty percentage stands quite high. Actually government has spent all this amount only on first strategy of poverty reduction, i.e. Accelerating economic growth and maintaining macroeconomic stability, while other four strategies have been left either untouched or neglected. Government only targeted high macro economic growth; the level of investment in human capital has not been seen at even a low extent. Augmentation in targeted interventions has also been misdirected. Employment opportunities should have been created with in the industrial or agricultural sector in order to accelerate the production of basic needs so that consumer goods should have been in the reach of low income group. While services sector was expanded without any planning, which resulted in a situation that mobile is kept by every one but they dont have access over basic needs. After that social safety nets have also been neglected, theres no proper pronouncement by government in this regard. And finally improvement in Governance, which has been left

untouched. For a long time, whenever senior government personnel visits a major city like Karachi, all the traffic on the roads is diverted in the streets and all the work being done is stopped in order to ensure the security of the official. By this way those who earn on daily wages, have to suffer loss in daily wages. I quoted this example because when rulers are so insecure in their own homeland how can they improve the governance or develop their country or how can they ensure the safety of the whole country? Concisely, in spite of all efforts of government poverty still stands as an iron wall for Pakistans economy. And to break this iron wall we are in need to apply all five poverty reduction strategies at utmost level. References: 1- Economics of Pakistan, M.Saeed Nasir

POVERTY WITH REFERENCE TO PAKISTAN BRIEF REVIEW Qazi Shamveel Bin Tousif Student BBA (Hons) 1st Year POVERTY AND ITS IMPACT ON THE POPULATION OF PAKISTAN DISCUSSION HAS BEEN BASED ON SECONDARY DATA AND IT IS AN EVIDENCE THAT POVERTY IN PAKISTAN IS WIDELY AND EVENLY DISTRIBUTED AND MUCH LARGER PORTION OF POPULATION, ABOUT 33% IS CONSIDERED VULNERABLE AND LIKELY TO SINK IN POVERTY. POVERTY has always, had several not entirely separable meanings and is always defined according to conventions of the society in which it occurs. We may distinguish two meanings: (1)Social poverty (2) Moral poverty Social poverty implies not merely economic inequality (of property, income, living standard, etc) but also inequality, that is, a relation of inferiority, dependence, or exploitation. Pauperism describes a category of people unable to maintain themselves at all, or to maintain themselves at the level conventionally regarded as minimal, without outside assistance. Moral poverty Defines the place of poverty in the value system of a society or of its subgroups and institutions: that is, it defines whether poverty is morally acceptable and what status it confers or prevents the poor man from enjoying.

In his book Development as freedom, Nobel Laureate AMARTYA SEN (2003) argues that development consists of the removal of un-freedom; In other words POVERTY IS UN-FREEDOM. The social category of the poor arises in stratified societies in which the upper and lower strata have direct experience of each other. The poor are normally contrasted with the rich: and a causal relationship is often assumed, as in the German Proverbs Poverty is the rich mans cow and Poverty is the hand and foot of wealth If worker consumers are incapable of effective resistance, either politically through the exercise of meaningful suffrage or economically through strong labor unions, the sheer pace of industrialization Is bound to produce widespread poverty. POVERTY IN PAKISTAN is a major economic issue. Nearly one-quarter of the population is classified poor as of October 2006. The declining trend on poverty in the country seen during the 1970s and 1980s was reversed in the 1990s by poor Federal policies and rampant corruption.1 The government of Pakistan has prepared an "Interim Poverty reduction Strategy Paper" that suggest guidelines to reduce poverty in the country. According to the World Bank, the program has tangible success, with the World Bank stating that poverty has fallen by 5 percent since 20002. Incidences of poverty in Pakistan rose from 2226% in the Fiscal Year 1991 to 32 35% in the Fiscal Year 1999. They have subsequently fallen to 25-28% according to the reports of the World Bank and UN Development Program reports. These reports contradict the claims made by the Government of Pakistan that the poverty rates are only 23.1%3. The CIA fact book places the 2006 poverty rate at 24 percent.4. For many people in developing countries, poverty means difficulty in living, as well as lack of basic services in health and education. In Pakistan lack of access to credit, training to income generating activities, basic social services and infrastructure are the critical factors behind the persistence of substation poverty. Poverty is widely spread in Pakistan and is pre dominating the rural phenomenon. Nearly about two third of the population of Pakistan live in rural areas, in 1970s to 1980s the poverty rate of Pakistan fell down but again in 1990s it rose up, According to the Government of Pakistans poverty reduction strategy papers, currently about 10 percent of the population is chronically poor, but a much larger portion of the population [for about 33 percent] is considered vulnerable and likely to sink in poverty. The incidence of poverty varies between rural to urban areas, and from one province to the next. In many other mountainous parts of the country where communities are small, isolated and where there are few major urban centers, poverty is widely and evenly disturbed.

There is controversy between the government officials and independent economists about the statistics of poverty but both the segments are agreed that out of four Pakistani living under the poverty line THREE are women. In the last It is concluded that if a person who is living in Pakistan earns less than a dollar per day then he is in poverty net. On other hand if he has lack of facilities than it is poverty of opportunity. So we can say that more than 40% of the population of the Pakistan is living below the poverty line

Pakistan is a poor and under developed country. Most of its population lives in entirely adverse circumstances. Some reports reveal that more than forty percent population of Pakistan lives below the line of poverty. A large number of people in our country do not have proper place to live, this miserable condition has given birth to a large number of beggars and needy people who

live on the charity of the rich people .The economic condition of an average individual is very pathetic.Poverty; hunger and unemployment afflict a large section of population. The causes of poverty are quite obvious and known. Firstly we are facing a population explosion. There are more mouths to feed than there are hands to earn. Ones income is limited; he cannot afford to maintain a large family. He works hard and consequently he falls ill and dies. Then his wife steps in works in village, fields or city, homes to bring up her children, this cycle of poverty goes on. Poor remain a poor, the whole of his life. The main cause of poverty in Pakistan lies in the difference between the resources and the population increase. Secondly most of the people in Pakistan are uneducated. They are ill equipped to lead a good life; they do not know the modern methods of farming. They are ignorant to better ways of earning money in the mills and factories with poor knowledge of life. They cannot increase production in mills and factories. Modern machinery is mostly computerized. An uneducated person cannot understand and operate computer. The result is that the remains poor till the last day of his life. It is very sad that result do not educate the workers. The workers do not get a chance to earn more money. Thirdly our economic system is based on feudalism. A big landlord keeps the small farmers and workers under his political slavery. The haris in sindh for example have tried to get free of the feudal lords but to no success. In Punjab and Nwfp the same condition exists. The economic condition of the small farmers and workers cannot become better in the presence of feudal lords. Fourthly, Pakistan is a country where does not exist any form of social, cultural and economic justice. The rich people in Pakistan are becoming richer while the poor are becoming poorer. The economic disparity between the rich and the poor has eaten the very vitals of society. The interesting thing is that no ruler has paid attention to minimize this disparity. The rich do not pay taxes; they do not abide by any law. They live in a rich bungalow, ride a beautiful car and send their children to costly schools. They enjoy every comfort and luxury of life without any hindrance. Fifthly poverty in Pakistan exists due to scarcity of jobs in the public and govt sector. Our rulers are not responsible, dedicated and missionary. They failed to build new dams, a network of industry and roads in the country. The shortage of electricity and gas has resulted the lock up of mills and factories. New factories were not set up in the past. The result is that our uneducated worker remains unemployed the educated people have degrees, but they do not have opportunities to get job. Many countries in the world have solved this problem Pakistan too can solve the problem by adopting the following measures. 1-the rulers of Pakistan must discard their lavish way of living. They must be one with their people; they must lead a life of a common and hard working person. This will go a long way to bride over the disparity between a rich and poor person.

2-the population explosion must be controlled. People should be educated and guided to produce small number of children. 3-more industries, mills and factories should be set up to provide jobs to the workers and small farmers. 4- Education must be made compulsory for all the individuals in Pakistan. It will train them earn more money by using their skill in a modern way. Opportunities to get computer education should also be increased. By Iram Shahzadi

Major Causes of Poverty in Pakistan Lack of Effective Demand Population Pressure Lack of Investment Absense of Solid Industrial Estates Sudden fluctuation in Demand and Supply Shortage of Capital Market imperfection Low literary rate Inflationary pressure Low Foreign Investment Dead/Zero Sum Investments Structual distortation Bad Educational System Govt. doesnt work to create more Employment opportunities