The poverty challenge

The Poverty challenge

By Tahir Ali

Life for Fazal Malik of Mardan, 60, has always been tough. Uneducated and without any assets or business, he did manual labour for years to earn livelihood for his wife, four daughters and two sons. He is now too old and weak to work. One of his daughters is mentally retarded. His elder son is uneducated and jobless and the younger did his matriculation but failed to find job and is now an addict. Worse, they had sold their ancestral house to treat his addict son and account for other domestic expenses. One of his daughters, who receives about Rs10,000/month from a private job, is the only bread earner for the family. But the monthly rent and health, food and other expenditures are too big for her meagre income. With no help from any pro-poor programme, Malik has started begging.

With widespread deprivations, poverty and inequalities but less effective pro-poor programmes, Pakistan is prone to ethnic and religious extremism and has become a difficult place for the poor like him.

Article 37(a) of the constitution of Pakistan says that the state shall secure the well-being of the people, irrespective of sex, caste, creed and race, by raising their standard of living, by preventing the concentration of wealth and means of production and distribution in the hands of a few to the detriment of general interest,”. And article 25 (1) of the Universal Declaration of Human Rights stipulates that everyone has a right to a standard of living adequate for  the health and well being of himself and his family.

Despite their commitments to the poor, successive governments have had perpetuated/increased the burdens of the poor. While unrestrained price-increases have been allowed, surcharges and taxes on gas, electricity, petroleum and other items of general consumption have also been multiplied that invariably add to the cost of living and throw millions beneath the poverty line. Enormous but untargeted subsidies have aggravated the poverty conundrum.

What is poverty?

There is difference on as to what constitutes poverty and who is poor. There is no standard formula available to measure poverty. Poverty is measured by the household income expenditure by the Pakistan bureau of statistics.  According to some, people living without certain level of incomes or calories (2350 calories per person) are poor but others measure it by multiple indices and say poverty entails multiple deprivations such as lack of access to education, health and electricity etc.

According to the Poverty Reduction Strategy Paper (PRSP), poverty is a multi-dimensional concept and is defined either narrowly on the basis of income or broadly by lack of access to opportunities for raising standard of life. The extent and depth of poverty measured through different approaches varies depending upon the indices used and definitions adopted.

However, there are some common characteristics of the poor namely, but not limited to, low literacy level, large family size, no or fewer physical assets, joblessness or a heavy reliance on daily manual labour for sustenance, are unskilled, thus work in the informal sectors and live mostly in rural areas or slums.

According to ONE organisation, an international advocacy group on poverty reduction, women are the worst affected by poverty. They work longer hours earning less money, have fewer educational and political opportunities and are more vulnerable to failures of weak health systems and diseases than their male counterparts.

Pakistan’s statistics

Poverty is widespread, mainly in rural areas where most of the poor live. A careful estimate suggests that one third of Pakistanis are poor –women and children, disabled and the aged, the most vulnerable – who have little or no assets and access to essential social services. There, however, is no reliable data on the extent of poverty.

The present regime for the first time in Pakistan’s history didn’t include the chapter on poverty in the economic survey of Pakistan 2010-11. It reveals two things: one, fighting poverty is either low in its priorities; second, poverty incidence has gone up.

The Sustainable Development Policy Institute (SDPI) reported recently that poverty incidence is 33 per cent in Pakistan or that around 59 million persons are living below the poverty line.

The SDPI report says 52 per cent population in Baluchistan, 33 per cent in Sindh, 32 per cent in KP (that KP is less poor than Sindh is debatable) and 19 per cent in Punjab lives below the poverty line. It says that 20 districts in the country –16 in Baluchistan and 4 in Khyber Pakhtunkhwa –have an acute poverty incidence with Kohistan in KP the most vulnerable district.

According to a research of the Higher Education Commission, poverty has increased to 40 percent in Pakistan in the last decade. The State bank of Pakistan puts the number of the poor at 62mn.

An independent estimate says around 74mn persons live below the poverty line. Another estimate says the number is 135mn, of which an estimated 70mn are extremely poor.

The Mahboobul Haq’s Centre, based on official data from last six years, estimates that 29.2 per cent or 52.5mn persons live in poverty in Pakistan and thus adds that poverty ratio may have gone up.

The World Bank estimated in 2008 that 60.2 per cent of Pakistanis earn $2 a day in 2008, which often is the yardstick for measuring poverty, but in 2005 it had said that 73.8 per cent were poor in the country. These figures are questioned by economic experts.

The UNDP’s Human Development Report, 2011 ranks Pakistan at 145th with HDI value of 0.504, up from 0.503 in 2010 and 0.499 in 2009, through Pakistan’s rank has slipped a little during 2011. Pakistan’s Inequality Adjusted Poverty Index is 0.346 and multi-dimensional poverty index is 0.264.

It was in 2005 that the official poverty statistics were last released showing a decline in the calorie-based income poverty from 34.5 per cent in 2001 to 22.3 per cent in 2005. In 2007-08, the figure came down to 17.2 percent. The figure was accepted by the WB, IMF and ADB but the PPP regime didn’t release it officially.

It was astonishingly recorded at 12.4 percent in 2010-11 by an official team but the PPP government aptly decided not to release the figure. With this an election year, the government, as per reports, wishes to show that poverty incidence has decreased ever since this government came to power in 2008.

But the goal of poverty reduction becomes very difficult if high inflation, increasing indirect taxation, low economic growth that forces job cuts, declining and twisted development and pro-poor expenditures are taken into account.

Why poverty increased?

Pakistan has initiated several Safety net programs to save the poor from economic shocks but according to a research, most of these pro-poor programmes are fragmented and often duplicative, have limited coverage, are poorly targeted (Only a fraction of Rs500bn spent by the government on different subsidies last year reached the poor) and most contribution are obtained by non-poor households, are characterised by slack implementation and monitoring capacity is very low.

Lack of access to markets/services, snags in agriculture development, illiteracy, political uncertainty that triggered frequent changes in regime that made long term development planning impossible, slump in businesses, low investment, increased joblessness for rising energy cuts and militancy, inflation and currency devaluation, recurrent natural calamities, un-targeted energy and food subsidies, inequitable income/resource distribution (the richest one per cent, it is estimated, grabbed 20 per cent of total income in 2001. This might have surged further of late), governance deficit, government’s failure to affect sustainable enterprise development, and limited coverage of social safety programmes have exacerbated, or failed to stem, poverty in the country.

The Asian Development Bank ascribes rise in poverty to growing population, internal tensions, mounting defence expenditure, agricultural backwardness, unequal income distribution, swelling utility charges and rising non-productive activities.

Mr Wolfgang Herbinger, Director World Food Programme in Pakistan, argued last year that food prices were too high in Pakistan and it is a country full with food but with people who are too poor to buy it.

Changes in per capita income, economic conditions, unemployment situation, and remittances alter economic fortunes and force people move in or out of the poverty situation.

The level and intensity of poverty is dependent on the pace of economic growth, the degree of social, political, and economic inclusion or exclusion, weak governance, inefficient judicial system, poor service delivery performance and corruption and leakage.

The Rural Support Programs Network,  through its dialogue with communities in different districts of Pakistan identified discriminatory education system, high incidence of health problems, widespread unemployment, deprivation from capital for enterprise development, few opportunities for women, lack of vocational skills, inadequacy of agriculture and livestock extension services, environmental degradation, inconsistent water supply, lack of access to justice, and a rapid rise in population, and at times variance between local needs and projects as the reasons for rampant poverty.

According to another report, ‘Human Development in South Asia 2012’ ‘governance deficit’ is adversely hampering efforts to cut poverty despite big expenditures. “(It) increases out-of-pocket expense for health and education….and (causes) unequal access to water, sanitation and electricity.

(To be continued)


About Tahir Ali Khan (Official)
I am an academic, columnist, and a social worker.

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